What does better credit have to do with your loan opportunities?
You have a great job with steady income – or you don’t. Your savings account contains a solid six months’ worth of expenses – or you’re broke. You’re maxing out your retirement contributions, contribute regularly to an IRA and you live well beneath your means – well, not really.
How could your credit score mean more than this?
It may not mean more than socking away funds for retirement, but maintaining excellent credit means greater flexibility and opportunity. For those who don’t monitor or care about their credit, they’ll find that major life decisions (i.e purchasing real estate) become more difficult.
At some point in your life, you are probably going to need a loan. Mortgages, student loans, business loans – they all scrutinize your credit as well as your finances. That means you need to take your credit scores seriously.
Lenders save the best interest rates for the most creditworthy borrowers. Not a big deal? Think again. Imagine you’re house hunting and you find the home of your dreams. It’s in your price range and you believe you can afford the payments with ease – until you find out that the bank plans to charge you three percentage points higher than the advertised rate because of your always-two-weeks-late bill paying habit.
Suddenly, your only chance to live in the home of your dreams is at night when you sleep. The mortgage payments you assumed you could afford have now moved beyond your reach.
Now, imagine the implications this has for other types of loans, from business loans to student loans to auto loans and more.
The point is that neglecting your credit will negatively affect your loan possibilities. Don’t limit your future opportunities when proper credit management is so simple. Always pay your bills on time. Don’t max out your credit cards. Demonstrate responsibility and the rewards of the future will be yours.