5 Reasons Why Your Credit is Important

By Lynx Financials
credit is important, 5 Reasons Why Your Credit is Important, Lynx Financials, LLC, Lynx Financials, LLC

What you should know…

As a society, we are becoming more dependent on placing unnecessary purchases using a credit card. Most times, it is due to us spending money on things we cannot necessarily pay for. In parallel, more and more businesses are stating that you must have a good score before their goods or services are available to you. This article will show five reasons why having a good standing credit is key for your financial health.

The Effect on Where You Live and How Much You Pay

When applying for a loan to buy a house, mortgage lenders will check your credit to make sure you won’t default on your mortgage. If you do not have a good score, the lender will most likely consider it risky to approve the loan. However, if you are approved for the loan, your credit can affect the attached interest rate to that loan which may be higher or lower. For this reason, you will need to make sure that your score is above good by consulting a credit repair service. 

Job Hunting

When you are seeking a new job, many employers will conduct a background and credit check in order to see how responsible you are with your finances. Applicants who have a bad score unveil the amount of debt they are in. These applicants with high debt and lower salary ranges are more likely to get denied.

Entrepreneurship

Your ability to start a business can become tougher if your score is not good. Most startups require a sizable amount of cash that you might not have available. In that case, you will need to obtain a small business loan, which requires good credit. Your score can also affect the credit of the business you are starting.

Monthly Bills Affected

Many people are unaware that your credit is reported to establish a utility service. The inability to pay (or not pay) your bills in the past can define your score and many businesses use your credit to predict your future financial responsibility. Late payments on utilities can lead others to believe you are unable to afford their monthly bills as well.

Difficulty Buying/Leasing a New Car

Buying or leasing a car always requires one to have good standing credit. For leases, if approved, it will determine how high your monthly payments will be on top of the down payment. It will also affect if you are eligible for the lease. When buying a car, your credit can affect the way how much one will need to pay on the monthly payments.

You can check you credit score free to take the first initial step in improving your score. If it’s low due to being in too much debt over the years, we suggest speaking with a debt consolidation company to help you set up a plan.