1. To purchase or lease a home.
If you don’t have good credit, the lender will consider it risky to give you a mortgage loan. This could result in a higher cost of borrowing or worse, a denial of the loan. Landlords usually determine if you’re trustworthy in their property via your Credit Score. If you don’t have good credit score, you can get denied for an apartment.
2. To purchase or lease a car.
Unless you have the cash to purchase a car, you’ll normally have to get a car loan. Your credit not only affects whether or not you qualify for a car loan. But also the amount and interest rate of the car loan. Generally, car loan applicants with good credit qualify for larger loan amounts with lower interest rates.
3. To have extra money for emergencies.
In times of emergencies, sometimes your only means of getting that extra cash is going to a bank for a loan. These personal loans usually carry extra hurdles for you to receive. And having great credit history and score makes a huge difference.
Since your credit is defined by how you’ve paid (or not paid) your bills in the past, many businesses – landlords, mortgage lenders, utility providers, and even employers – use your credit to predict your future financial responsibility. Anytime you need to borrow money, or even services, your credit is called into question. This is why maintaining good credit is so important.