Good Credit? Who Cares?

Date: April 5, 2013 - 3:01pm
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You always hear about “Good Credit,” or “Bad Credit.” What’s so important about your credit rating anyway? It won’t matter until you’re out there looking to buy a house or a new car. Or will it?

Your credit may determine whether you can find an apartment, buy a car, or get a small business loan.  Your credit rating not only determines whether or not you get a loan, but it often affects the interest rate you receive on a loan as well.  

Employers often look at the credit rating of potential employees. “Many employers conduct credit checks as a part of the hiring process. If you haven’t demonstrated financial responsibility, a prospective employer might be hesitant to hire you. For example, the employer might believe your level of debt is too high for the salary offered,” says LaToya Irby in Why Good Credit Matters, http://credit.about.com/od/credit101/a/creditmatters.htm

Even service companies will check your credit before extending you a contract for services. Companies that offer services such as utilities, phone service, water or cable want to know you’re a safe risk before they extend their services to you.

“Since your credit is defined by how you’ve paid (or not paid) your bills in the past, many businesses – landlords, mortgage lenders, utility providers, and even employers – use your credit to predict your future financial responsibility. Anytime you need to borrow money, or even services, your credit is called into question,” Irby concludes.