Home / Blog / Credit Scores / Why Good Credit is So Important

Why Good Credit is So Important

credit history good credit scores

You grow up learning that good credit is a near-necessity in life. But the older you get, the more people you meet with bad credit.

They are your friends.

They are your family members.

They are people you like and you respect and you look up to. And it's confusing when they seem to be getting by just fine, even with hefty debts and a bad credit score.

For some, dealing with bad credit is just a part of life. But they are missing out on a lot.

4 Ways Good Credit Benefits Your Life

1.  It affects where you live.

Most people are aware that bad credit can seriously impede efforts to get a home loan – and it's true. Patrons with bad credit are considered "dangerous for lending" by banks because there is a higher risk that they will default on payment. If the loan is granted (it often isn't), absurdly high interest rates will be tacked on.

Many people are less aware that bad credit can affect rental agreements on apartments and houses. A rental lease is essentially a "loan" from the landlord to the renter(s) and many will require a credit check to see if their new tenant is financially reliable. Bad credit can result in no rental and a never-ending apartment search.

2. It affects your transportation.

Like purchasing a home, buying a car usually requires more capital than any one person can pay at one time. Good credit means you get your auto loan, and at a good interest rate. Vice versa for bad credit.

3. It can affect your job.

Employers can ask to see your credit score and credit history during a background check in the interview process. If your debt is significantly higher than your potential salary, employers may feel uncomfortable with you on their staff.

In the past few years, credit checks during the job hunt has become more complicated: in the wake of economic turmoil, many who had good credit may have lost their jobs or suffered financial blows, and credit history has become a less fair way to measure the potential of an employee. But it remains true that those with good credit can skip that road block no matter what the economic climate.

4. It can affect your day-to-day utilities.

Electricity, phone, cable: the things you use everyday are managed by companies that look to your credit for signs of irresponsible spending. Even if you've paid every utility bill in full and on time, many utilities companies will require you provide a sizable down payment to guarantee service as a result of poor credit history.

Check Your Credit Score

Investigate your own credit history without spending a dime, through any of the free credit report resources we recommend.

Blog Tags: 

Sign up for our monthly newsletter.

Get the latest tips & advice from our team of 30+ credit & money experts, delivered to you via email each month. sign up Now

Elisabeth Chan's picture

Elisabeth Chan is Creditnet's resident credit card expert. Elisabeth graduated Magna Cum Laude from Brigham Young University's Marriott School of Business.

When she's not rating and reviewing credit cards, Elisabeth enjoys gushing over her daughter (who is her exact clone), eating out (sushi and Chinese are favs), or attempting to conquer the pilates reformer machine (so far, all attempts have been futile).

Visit 's Google Plus profile for more.