Your credit score has a big impact on your ability to take out a personal loan or obtain a line of credit for a new business venture. In addition to determining whether or not you’ll be approved for a loan, your credit score may affect the interest rate attached to it. You may think that you don’t really have to worry about what shape your credit score is in if you don’t plan on borrowing money any time soon. However, it’s important to bear in mind that your credit score can be a very significant factor in several other things that you may need to do. Here are a few important things that you may be planning on doing in the near future which may require having a good credit score.
Renting an Apartment
The rental market can be particularly competitive in some areas. If you find an affordable apartment in a desirable location, there’s a good chance that a lot of prospective renters are interested in the same apartment. In addition to verifying your income, a landlord or property management is likely going to run a credit check to assess your ability to pay your outstanding obligations on time. Applicants with poor credit scores may be seen as too risky to take on as tenants, so having a poor credit score could result in your rental application getting rejected. Even if you’re able to get a cosigner to guarantee your lease, your poor credit history may cause you to fall behind other applicants in the tenant screening process.
Setting Up Utilities
When you move into a new home, one of the first things that you’re going to need to do is move the utility accounts to your name. Most utility companies will run a credit check on new customers. If the customer has a poor credit score, the customer will probably need to pay a considerable deposit to begin service. In some instances, the deposit can be as much as two months’ worth of what the utility company expects that your average payment will be. You may not be able to get the deposit returned until you terminate service. The utility company will keep your deposit if you default on your payment, or it may keep a portion of your deposit if you’ve accumulated any unpaid late fees during your service term.
Applying for a Job
Many companies will check their job applicants’ credit scores. While it isn’t necessarily important that a job applicant have some type of elevated financial status, problematic credit may be a red flag. A credit report showing a lot of delinquent accounts or consistently late payments creates the impression that you can’t be expected to meet your commitments. In addition, delinquencies may cause potential employers to view you as a security risk. The rationale is that a person is willing to default on obligations may be more likely to commit some type of financial honesty in his or her employment. This concern is particularly relevant to employers who are hiring in a position that involves working closely with a company’s accounts and assets or will have limited supervision while handling customers’ financial information. In contrast, a strong credit report demonstrates to employers that you’re organized, you meet your obligations, and you don’t present any significant security risk. Ultimately, with all of the other considerable work that goes into landing a good job, you certainly don’t want to let poor credit stand in your way.
Getting a New Credit Card
When you apply to get a new credit card with a traditional financial institution or an online credit card company, there’s probably a specific reason that you’re interested in getting that specific card. It may be a compelling offer for a new account such as a cash reward, a good sized credit limit, an exceptionally low interest rate. However, all credit card companies are going to run your credit before issuing a card. Generally, they work with set minimums for credit scores rather than making determinations on a case by case basis. A poor credit score can cause a company to reject an applicant, regardless of his or her income or assets. Also, shaky credit may result in a credit card company offering you a card but charging a higher interest rate than it would charge if you had good credit. In addition, the company may set your credit limit somewhat low, so you won’t have all of the balance available than you wanted.
You need to think carefully about all of the reasons that you may want to raise your credit score. While you can’t fix your score overnight, you can make consistent progress forwards, no matter how bad your credit is now. Coasttradelines.com can help you give your score a boost by incorporating positive credit lines into your credit report. Reach out today for help moving your credit in the right direction.