Credit Score: Why It's Important

Credit Score: Why It's Important
Anytime we are in a bank or see something even remotely
finance related, we hear the common phrase of credit score.
Anytime we see a credit card application or open a bank
account, somewhere on this bit of paper will be those two
little words.

Most of us can likely make a fairly educated guess as to
what the credit score is. However, many of us are unaware
of the profound impact this little number can have over our
financial lives.

The credit score affects much more than if you are going to
get that new credit card or not. Credit scores can be the
deciding factor in many of our life's decisions and
challenges.

In this article we will look at why it is so important to
maintain a good credit score in this day and age.

The credit score is most commonly associated with loan
decisions. It probably comes as no great surprise that
whenever, you apply for credit card, loans, installment
payment plans and mortgages the credit score is one of the
major deciding factors.

People with low credit scores will likely struggle to get
approval on any of these more so than those with high
credit scores. By keeping on top of your finances, you can
insure that your credit score remains solid.

The credit score not only decides yes or know on various
types of financing, but what rate of interest you will
receive. Those with good credit scores are likely to get
the premium rates of interest. Those with low scores are
going to be charged more. Those with low credit scores can
still obtain financing but quite often they are forced to
use sub-prime lenders. These lend the money but at much
higher costs.

Many are surprised to hear that your credit score can now
affect the rate you receive on car and homeowners
insurance. Several states have started employing this
policy on the evidence that statistically, those with
better credit scores are less of a burden. They make fewer
claims than those with poor credit.

Finally, sometimes potential employers will look at credit
scores when making the decision on whether or not to hire.
Those positions in the financial world are known for this.
A poor credit history will make some employers reluctant to
offer expense accounts and company credit cards.

Many of us need credit accounts to get the things that we
need today. Most of us would struggle to buy a new car
without financing or a house without a mortgage.

Having credit is important and so is maintaining a good
score. Keeping the credit score high can offer better
finance opportunities as well as more favorable insurance
rates and even that dream job.

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Jim Moore comes from a background in engineering and
financial services software. Jim has spent the last 20
years as a professional writer working for some of the
world's largest engineering and financial companies.
Jim's personal goal is to pass on what knowledge he has
gained throughout his career to help as many people as
possible.
http://www.improveyourcreditscoring.com