Credit scores are important and they go beyond just securing a loan. Your credit has the potential to affect where you live, work, and even how much you pay for goods and services. Here’s why your credit is important outside of getting a loan.
Renting a Home or Apartment. Many landlords require a credit check before you can rent, and some simply won’t rent to tenants with a bad score or report. They want to ensure their tenants will be able to pay the rent, and a credit check can give them a brief glimpse into the potential tenants’ financial credibility. Having good credit might mean a lower deposit and could even waive the requirement of a cosigner.
Applying for a Job. Although it’s becoming a newer practice, many employers are now requesting a credit check as a condition of employment. This is seen across a variety of industries as well as many municipal and government jobs. Employers look at a potential employee’s credit as a means to gauge character and responsibility.
Setting up a Mobile Phone Plan. Mobile phone providers want to make sure their customers will be able to pay their bill. One way to help determine your likelihood of making payment is to look at your credit report. If you have poor/bad credit, you may be required to pay an additional deposit or higher fees.
Getting a Credit Card. As you might suspect, your credit report and score have a definite impact on getting a credit card and your interest rate. If you have a lower or non-existent score, you could encounter higher interest rates, denial of application, lower credit limits, or even having to put down a deposit to obtain a secured credit card in advance.
Having good credit can be incredibly important since its reach extends beyond just loans you may get over your lifetime. You should be checking your credit report annually. You’re entitled, by law, to a free credit report every 12 months from each credit bureau. Visit annualcreditreport.com for your reports.