Why Good Credit Matters For Both Individuals and
Small Businesses
In today’s society having good credit is an important aspect of being
able to afford necessities such as housing, transportation and insurance.
Various businesses may offer products and services based on your credit
worthiness and some employers may look to securitize your report when applying
for a job. Your credit score is something that will follow you throughout
your life and good credit can help you obtain what you want at an affordable
price.
If you don’t have money to pay for something outright such as a house or
car, you’ll look to apply for credit. Buying a home includes making
mortgage payments to the bank or lending institution who offers the loan.
They want to know if you can be trusted in making payments according to the
agreed upon terms of the loan. Having a good credit history, that
includes making timely payments, may help increase your chances of being
approved by the mortgage lender. The same is true for an apartment; the
landlord may review your credit history to learn about how well you make
payments or other credit you may have. If your history is poor you could
be denied the apartment.
A vehicle loan has a similar process, yet your credit may determine the
kind of car you’re eligible to purchase. Like with mortgages, you may
need to make a down payment in order to satisfy certain loan terms depending on
your credit history. When you apply for a loan there is also interest
you’ll pay that goes to the lender. If you have poor credit you may pay
more; meaning monthly payments would be higher than average.
Some may say that it’s not an employer’s business to know anything about
an individual’s credit score. Employers run credit checks for a reason:
to determine if a potential employee demonstrates responsibility. If
you’ve been steady in making payments and keeping up with your finances, this
is often a plus for helping people get hired.
More people are looking into starting their own business. Small
business loans may not be easy to come by with poor credit. The good news
is that there are programs available for small business owners and
entrepreneurs to help them improve their credit worthiness. For some,
managing a small business is their main source of living income.
Establishing utilities including gas, water, cable, phone and electric is also
determined by your credit since you pay for services on a monthly basis.
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