Do you regularly check your credit report? If you do then you are doing exactly what you should be doing to ensure your credit score is accurate. However, if you do not you need to because your credit affects many aspects of life. If you have inaccurate information it is important to get it resolved as quickly as possible and have errors removed. If you have less than stellar credit it is important to start fixing it to improve your credit score. Credit is used a lot for many things we use and need every day so it is vitally important to ensure you have a good rating. Here are some reasons why good credit is important:
- If you rent an apartment or home you will likely have a credit check from your landlord before being approved. Even if you have a well paying job and can afford the rent if you have a high debt to income ratio or have a history of delinquent accounts, you will be at higher risk for non payment of rent. This may mean your landlord may request additional security deposit, may require a cosigner or may not rent to you at all.
- There is an increasing trend toward employers checking credit reports before extending an offer for employment. The fact that you pay your bills on time shows that you are a responsible person and this will translate into a responsible employee. If all things are equal and you are up against someone with better credit, that person will likely get the position.
- Insurance premiums also factor in your credit score. The reason for this is that actuaries have studied statistics that show people who pay their ills on time take fewer risks in their vehicles. So, while you will likely still be able to get insurance your premiums may be increased if you have poor credit.
- Utility companies including your electricity, gas, telephone, Internet and cable or satellite will often check credit before allowing you to open an account. If you have poor credit you may be required to pay a deposit before your services are turned on. Typically this deposit is either returned after a time or applied to your bill when a positive payment history is established. It is also possible that it will be kept until your account is closed and then it will be returned.
- Credit checks are standard for cellular phones. Before you can open an account the cell company will check your credit and extend credit for those who have poor credit only if you remit a deposit. If you can not get a cell phone account the other option is to open a pay as you go account.
- Loans such as auto and home mortgages require good credit. Without positive credit you will either be hit with a higher interest rate or you may be denied credit completely.
- Even though credit cards are not required to live, they are convenient. However, without good credit you will not have credit extended or you will have credit offers only with high interest rates to mitigate risk.
While loans and credit cards are the typical reasons maintaining good credit is important, there are many others these days. Therefore, it is important to ensure you check your credit report regularly so you can make sure your score is accurate and there is no need to make improvements.
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- Top Ten Ways to Build and Maintain Good Credit
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- Bad Credit? Don’t Let it Ruin your Life
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