Your credit rating has a significant bearing on your comfort, stability, and financial security. With society becoming increasingly dependent on credit to make large purchases and financial decisions, credit scores have become a “status symbol” held highly by lenders and borrowers alike because of how they reflect one’s hold on their money.
The importance of credit scores and their impact on your present and future situation is fairly straightforward and can be explained in two easy ways:
Good credit opens the door for opportunities and makes it much easier to live your best life, and;
Bad credit holds you back from getting adequate financial assistance and the most optimal rates on loans.
Credit scores can determine how you can enjoy your money and make the most out of opportunities along the way. As you try to understand the kind of effect that your credit score can have on your financial freedom, chances are that you have one question in mind: Why should I keep a high credit rating?
How a Higher Credit Score Can Help You
Whether it’s in the context of taking out loans or qualifying for discounts and rate reductions, the importance of a high credit rating manifests in many different ways. To best understand precisely why it pays to settle your bills on time and go after other opportunities to bump your credit score, here are some compelling reasons worth considering:
Reason #1: Buying a Car Requires a Good Credit Score
At some point in your life, you’re bound to deal with the need for an automobile that can help you get to and from work. But with all your current expenses, you can’t buy a car without taking out a loan. And getting approved for such a loan means you need to show good credit before all else.
You see, in the context of taking out loans for purchasing a car, most lenders will be averse to applicants with lower credit scores because they perceive such borrowers as much more risky. If your current credit score is relatively low, then you’re likely going to have a limited number of loan options to choose from, all of which have higher interest rates, leading to higher monthly payments.
Reason #2: Buying a Decent House Requires Good Credit
Apart from automobiles, another major big-ticket item that is best to purchase if your credit score is optimal is a house. Mortgage lenders scrutinize all loan applications and only grant favorable terms to those that can keep up with monthly payments throughout the loan term.
Like car loans, if you find yourself applying for a mortgage loan with a bad credit score, you risk getting your application denied or approved at higher than market rates.
Reason #3: Good Credit Scores Are a Requirement for Living Comfortably
For most people, the quality of one’s life is determined mainly by the ability to access a sufficient amount of money at any given time. As you’ve probably learned by now, the loans that can help you live comfortably can only be accessed with a higher credit score. For this reason, it’s vital to stay on top of your credit rating.
Your history of paying bills is crucial whenever you need to borrow money, finance a purchase, or set up a business, so it’s easy to see why having a good score is paramount for living comfortably. Fortunately, you can always consult with an expert like Stones River Credit if you want to ensure that you’ll live with greater ease!
Credit scores have a significant impact on one’s quality of life. It’s vital to maintain it as best as you can by paying all of your bills on time. This way, you can maintain financial security all your life.
If you're looking for personal loans in Murfreesboro, TN, that you can build your credit score with, we're here to help. Get in touch with us today to learn more!