A person with a poor credit score probably has experienced the negative impacts. You will not have the ability to borrow money, for instance, signing up for another credit card, applying for a loan or taking out a phone contract if you have a poor credit score that resulted from overspending on credit card limits or missed payments that took place some years back. There are several advantages of looking after your credit score and making sure that it stays at a good level. Let us explore.
1. Purchasing a house.
If you are living in a rented house, chances that you will one day expect to own a property of your own are high. Homes are worth hundreds of thousands of dollars and can be passed down to your kids as inheritance or can be sold; you will also get the freedom of building extensions and decorating your home the way you like. Your bid to get on the property ladder is going to be far more than tough if you have a poor credit score. Mortgage lenders consider lending money to a borrower with a poor credit history as a risk.
2. Career opportunities.
Not only will your ability to borrow money be affected by your bad credit history. In most cases, individuals with bad credit scores are at high risk of being turned down for job positions that they would have been suitable candidates. Getting a job at a financial institution like a bank if you want to work with the finance industry will be hard if you have a bad credit history.
3. Acquiring the Necessary Funds.
Although you may not imagine yourself in a tight situation whereby borrowing finances is the only option, you aren’t guaranteed that it won’t happen to you. In case you get to such a point, the ability to take out your credit card or get an emergency loan may come in handy. In case your credit score is low, you are at a riskier position of your emergency loan application getting declined if you need to borrow funds in future.
4. Acquiring a Business Loan.
Entrepreneurship is within your reach now more than ever before, and this explains why many entrepreneurs are starting their own businesses. But if you have a low credit score, then you may not have the ability to source for the needed funds to boost your business. Although you may still have other options such as angel investors or crowdfunding, the first source of funds for most investors is through a bank loan. Despite the funds being for commercial use only, your personal credit history will be taken into consideration.