It is important for every person to have good credit. This is because every person will require acquiring loans at some point in life. When you want to get some loan from the bank, good credit history and a high credit score will come in handy. In case you are contemplating buying a home, you need to make sure that you have a good credit score.
Purchasing a home is a big investment one need to make. It can also be very challenging to buy a home if you do not have the right credit score. Financial institutions are very careful about lending and have stringent requirements for you to qualify for a loan. Even if you are not planning to buy a home, you need to appreciate that your credit history will also affect your ability to rent a home. For people with bad credit score, the landlord may demand that they pay a huge amount of rental deposit.
Your credit score will also affect you when you are buying a car. Since cars are costly, many people will not buy cars without taking loans. Even with poor credit score, you can still be in a position to acquire a car loan. However, having a poor credit score will require you to pay high interest rates and a huge down payment. When your credit score is poor, you will pay a lot of money for the same asset compared to a person whose score is good. After buying the car, you will need an insurance cover. Most insurance companies will not calculate insurance premium payment before considering the credit score of the company.
The truth is that one cannot make some development without acquiring a loan from the bank or other financial institutions. You can avoid making mistakes that might cost you if you are careful to carry out regular reviews. Some people suffer innocently due to errors in credit reports. In most cases, errors happen when information of another person with a name like yours get recorded on your profile.
Tracing your payment history is very important. Many lenders are interested in your payment history and will check it before giving you a loan. You also need to ascertain that the payments you make are reported to the CRA. Make sure that you are not a victim to identity theft. Today identity crime theft is a common crime. In case your credit report has some accounts that you did not open, this is a sign of identity theft.