Your credit score is much more important than you may believe. Applying for loans, attempting to apply as a tenant to an apartment, and even applying for a credit card can become almost possible if your credit score is not good.

What is a Credit Score Anyway?

Your credit score is what third parties, like banks and lenders, will use to analyze the risk of lending you money. It is also the way credit card companies, banks, and other institutions determine the likelihood of whether or not you will be able to pay off any potential debts you may accumulate. A higher credit score is superior to a lower one, and it indicates that your current financial situation and your past behavior show you to be someone who can and is able to pay off any loans you might be approved for.

Why You Should Want Your Credit Repaired:

Bad credit doesn’t only prevent you from getting a loan or a credit card. Bad credit can have vast rippling effects that cripple your standard of living. You might not notice it immediately, but the ripple effects will eventually vastly impact your life. Situations like this can be easily avoided by keeping on top of your payments and ensuring that your credit score is good. Some benefits of having good credit are as follows:

1.  You don’t have to pay cash for everything. Having bad credit severely limits your options for how you pay for your day to day necessities; basically, you’ll be paying for everything with cash, since your bad credit precludes you from getting a credit card.

2.  You can obtain higher credit limits. Paying your bills consistently on time will result in your creditors increasing your credit limits. Creditors analyze your credit score and history before making or offering any changes to your credit limit, and having a poor credit score could result in a cut to your credit limits.

3.  You can rent an apartment. Many landlords check an applicant’s credit to see if you will make a good tenant who pays their bills on time. An applicant with a good credit score is much more likely to be chosen as a tenant than an applicant with a poor credit score because landlords want to ensure their tenant is responsible and will pay them on time.

4.  You can purchase a home with a low-interest rate. Mortgages require good credit, and a large number of banks will not finance your mortgage until your credit score is repaired. The banks that do approve your mortgage with a poor credit score will severely undercharge your interest rate.

If you’re interested in reading a more in-depth piece about repairing America’s broken credit system, and how to navigate the inner workings of credit scores, then check out “An Attempt to Repair America’s Broken Credit System” by Andre Coakley, available on Amazon.