Importance of Establishing Good Credit

While it may seem like one three-digit number couldn't possibly have that large an impact on your life, if the number in question is a credit score, it definitely can. Your credit score, the overall rating of your creditworthiness, can play a part in determining everything from where you live to how much money you ultimately end up paying for financed items. To ensure that your credit leaves you with as many options as possible, and money in your pocket, dedicate yourself to establishing good credit.

Getting Approved

When you apply for credit, your credit rating is the first thing that lenders consult when determining whether or not to approve you. Having a poor credit rating can cause you to miss out on everything from that low-interest credit card in which you are interested to the mortgage that you need to make your dream home a reality.

Interest Rate Impact

The lower the interest rate you have on your credit accounts, the less money you ultimately end up paying for debt you accrue. By having good credit, you can qualify for the lowest possible interest rates. If you receive a credit card when your credit rating is good, but you later falter, you may find that card's interest rate hiked, as many lenders reserve the right to increase interest rates if payment-related issues arise.

Acquiring Insurance

Creditors are not the only ones who check your credit rating. Insurance companies also look at this information when deciding whether or not to extend you insurance. If your credit is poor, you may be seen as too significant a risk and insurers may not be willing to even insure you.

Getting a Phone

A cell phone may seem like a simple thing to acquire, but if your credit needs some rehab, it could prove anything but. Nearly all cell phone companies check customers' credit histories before approving them for cell phone plans. If your credit is poor, you may be required to secure a co-signer to qualify for cell phone service, or you may not even be able to acquire a contract at all and, instead, be forced to go with a pre-paid account.

Setting up House

The ability to get a mortgage isn't the only housing-related issue upon which a poor credit score can have an impact. Many landlords pull credit reports to determine potential tenants' creditworthiness before approving them for an apartment or home rental. If your credit is poor, you might have a harder time finding housing, even if you wish to rent, not buy.