Imagine your credit score as the ultimate test. It's fluid, based upon factors you may or may not fully understand and the end result can shape the rest of your life. Here are the 5 most important reasons you have for repairing your credit score.
Student loans can be a lifesaver to anyone dreaming of a college degree and better career. The problem is that, like with most financing, you can be denied for some loans if you have a poor credit history. Federal loans will generally not look to your credit score, in part because most loans will be taken out by students fresh from high school and with no credit history. Private student loans, however, can and will check your credit. Like federal loans, they are not disposable in bankruptcy, and can come with a series of severe controversies. You'll want to ensure that you get the lowest rates and most preferential loan you can qualify for.
Traditionally, owning a home is a great investment, but without good credit, many lenders will not work with you. Even worse, you may only qualify for high interest rate loans, or a mortgage that will only lend up to a certain percentage of the property's worth. This means you'll need to find extra cash to make the upfront down payment.
Sometimes emergencies strike and you may find yourself faced with expensive car repairs or dental surgery. While charging these on a credit card or taking out a loan may not be the smartest financial move, it may be unavoidable and good credit will help you qualify for financing when you need it.
Others May Be Watching
Some employers do credit checks on their employees and even on job applicants. While your credit-worthiness does not necessarily have any impact on whether you can or can not do the job, some employers feel that a bad credit score is a warning sign.
Landlords are also increasingly looking at credit scores to see whether or not you're a likely candidate for defaulting on the monthly payment and potentially forcing them to evict you.
Good credit means lower interest rates for car loans, mortgages, credit cards and most other types of financing. Every dollar you do not pay toward interest is a dollar you can save or spend, which is enough encouragement to strive for superior credit, especially as lenders tighten their requirements for borrowers.
In conclusion, repairing your credit score is an excellent start toward achieving many of life's milestones, and preparing yourself for bumps along the road. Whatever hiccups exist in your credit history, efforts to fix the problem today can save you significant money over time and help you move on with your life.