Your credit score rating is basically your credit report card. You are graded according to your handling of credit and bill paying habits and awarded a score that reflects it. Those who get the best reports cards are those who complete their assignments; in this case paying their bills on time and maintaining healthy balances in their accounts. Those with bad report cards are the ones who don’t pay attention and don’t take their assignments seriously. They lose track of their balances, and they pay their bills late or not at all. But how and when you pay your bills and how much credit you maintain are just a few of the reasons you need to keep your credit score rating report card clean.
Your Credit Score Rating Dictates How Much Interest You’ll Pay
If you have a low credit score rating you may still be able to get credit, but the interest you pay will be much higher than if you have a good credit score. This doesn’t apply to just credit cards, but also to home mortgages and auto loans. Maintaining a high score could save you thousands of dollars over the course of your life by giving you access to lower interest rates.
Employers View Your Credit Score Rating When Considering You for a Position
Whenever you apply for a job and reach the interview stage, be sure your employer will check your credit score rating. This is especially true if the position is in the financial sector or comes with a huge financial responsibility. Employers view people with above average credit scores as reliable and responsible. Having a low credit score may cause them to think that you are not dependable or mature enough. If you are already working, keep in mind that they also review credit score rating numbers as part of the promotional process.
Utility Companies and Your Credit Score Rating
When you apply for an account with a utility provider, and also cell phone companies, they will request a copy of your credit history. This plays a major roll in their decision to award you an account or not. If you have a history of not paying bills, of course they will be quite hesitant to take you on as a new customer.
Insurance Companies and Your Credit Score Rating
Though a bad credit score may not stop you from getting insurance, it ill have an affect on how much it costs you. This is especially true of auto and home owner’s insurance firms who are using the credit score rating more and more to determine the rates their customers will pay. Insurance companies believe that credit history can predict future claims. They believe that the better a person handles credit, the less likely they will be to file an insurance claim.
As you can see there are many reasons to maintain a good credit score rating. Your credit report contains everything a lender needs to know about you before making their decision to loan you money. Things such as the amount of debt you have, how good you are at handling it, and the types of debt you have are all part of the formula. If you don’t know what your credit score rating is, it would be wise to find out so that you can begin repairing any damage as soon as possible.