Having a good credit can open the gates of many financial possibilities, such as applying for a bank loan, purchasing a car or home at a lower interest rate. These benefits ensure financial stability and provide a great way in building personal wealth. Therefore, individuals should devise a strategy and follow a wise approach to build good credit at an early age. It will teach them how to secure their financial future and help them establish a good credit rating.
It is evident that society heavily relies on using credit to make purchases and financial decisions and these days, good credit is used for different purposes which are not limited to get a credit card or applying for a loan. Many businesses are emphasizing on the fact that individuals must have a good credit so that these businesses can extend their services and products to these individuals. Moreover, when it comes to where you live, having a good credit carries a lot of weight. Mortgage lenders and financial institutions want to make sure that you will not default on a mortgage and consider it highly risky to give you a mortgage loan if you do not have a good credit. You may end bearing high cost of borrowing and in worst cases; they may reject your loan application.
If you think that your credit will not be questioned just because you have not been in the market for a new home, then you are wrong. Your credit is also assessed to make a rental decision and landlords take your lease agreement as a loan agreement. You are given a place to live as a loan and landlord make sure that you will pay back the loan by paying regular rent. If you do not have a good credit, they may reject your application for renting an apartment. Also, you should consult Your Personal Financial Mentor when you intend to make any financial decision because he can give you suitable advice keeping in mind your financial history.
Many employers conduct credit checks before hiring the right candidate. If you are unable to show responsibility in financial matters, they may be reluctant to hire you. For example, if you have a huge financial debt on your shoulders, the employer might feel that the salary offered will not be able to cover the debt. Secondly, you need to have a good credit if you are looking forward to start a business as an entrepreneur. Many businesses require a huge amount of cash that can be obtained from small business loans. But to qualify for that loan, you need to have a good credit.