It is common to hear people talk about their credit scores, and you may have even read a few articles about how it is important to maintain a good credit rating. However, if you are like many other consumers, you have tuned this out until now. The fact is that your credit score matters for more reasons than you might think.
Applying for Credit
Perhaps the most obvious reason why your credit rating matters is because it is reviewed any time you apply for a new loan. Whether you are applying for a new credit card, a debt consolidation loan, a home mortgage or a car loan, your credit rating is reviewed to determine what loan amount you qualify for as well as what rate and terms you may qualify for. Your credit rating ultimately plays a major role in not just your ability to get a loan but also in how affordable that loan is.
The Job Application Process
You may not realize it, but many employers are now conducting a credit review as part of the job application process. While a potential employer will not pull your credit report when you submit your resume for consideration, many are now pulling a credit report before they extend an offer of employment. They want to review how responsible you have been, if you are experiencing financial stress and if you have other financial issues, such as outstanding civil suits, that may affect your ability to focus on your job.
Your Insurance Rates
Even the cost of your insurance may be affected by your credit rating. Many insurance companies are doing a cursory review of your credit rating to determine how financially responsible you are. Financially responsible people may be less likely to file a claim, so insurance companies may extend lower rates to them.
With all of these things in mind, you can see that your credit rating is important. If your rating is lower than you’d like it to be, make an effort to increase your scores over the next few months.
Article provided by homeinsurance-rates.com, a top resource for home insurance.