The Advantages of Good Credit History

A person's credit history is a seven-year record of the positive and negative reports that creditors have made in regard to his payment patterns. A credit history that contains mostly positive reports results in a higher credit score, which in turn can open up further opportunities. Those with good credit histories can secure financing more easily at lower rates and will be more attractive prospects to employers and landlords.

Credit Cards

Credit cards are easier to get when you have a good credit history, since this indicates to card issuers that you are likely to make all of your payments on time. When applying for a new credit card, those with good credit histories are more likely to receive lower interest rates and higher credit limits.

Loans and Purchases

As with credit cards, people with good credit histories typically can borrow larger sums of money at lower interest rates than those with average or poor credit. When buying a car, for example, there may be restrictions on how low the interest rate can go. In this case, dealers may be willing to lower the selling price for those with good credit histories.

Rentals

When a tenant is renting a home, business location or vacation property, landlords and property management companies typically perform credit checks to determine whether potential renters are likely to make payments on time. A good credit history can help ensure that an individual's rental application is approved and may also persuade owners to lower or eliminate rental deposits as well.

Insurance

Insurance companies often check credit scores to evaluate whether applicants are likely to pay their premiums. Having a good credit history makes it easier to get insurance and typically reduces the amount that the insured has to pay each month.

Employment

Some employers check the credit of potential employees, especially if the employee will be working with money or other valuables. Those with low credit scores may not be hired as it shows that they are not dependable and that they may not be trustworthy. Having a good credit history can help an applicant to have an advantage over competitors also seeking a job.

Utility Deposits

Utility companies typically check credit scores before establishing service to determine whether an individual is likely to pay his bill on time. Those with good credit histories often receive a reduction on their utility deposit or may have the deposit waived completely.

Business Startups

When starting a new business, entrepreneurs typically have to secure funding based on personal connections and their ability to get loans or credit lines. Having a good credit history makes someone much more likely to receive a business loan with a favorable interest rate and may also allow him to apply for a larger loan amount than he would otherwise qualify for.