We always hear that credit matters and how important it is in our life. Now that everyone is increasingly becoming dependent on credit, we can attest that credit, is indeed, a significant part of our life.
However, it’s not just because credit helps make everyday purchases. In other words, your credit score matters because it can affect many aspects of your life, including the following.
Table of Contents
Mortgage
When applying for a mortgage, lenders will use your credit score to determine if you’re a risky borrower or not. Take, for example, applying for jumbo mortgage Texas. Since this type of home loan is for home buyers who wish to buy more expensive homes, you can expect the credit requirement is typically higher than a regular mortgage. Mortgage lenders will usually require you to have at least 700-720 score to qualify for jumbo mortgage Texas.
If you can’t meet the minimum credit score requirement, then your lender may not approve your mortgage application. If you do get the loan, you can expect that you’ll have to compensate by paying a higher down payment or a higher interest rate.
Rent
Nowadays, landlords also check on your credit to see if you can pay them your monthly dues. They treat your lease as a credit. They loan you your residence and wants to make sure you’ll pay them back this credit. Having bad credit can jeopardize your plans for renting out the apartment you fell in love with in the first place.
Good Read: How Renting an Apartment Will Affect Your Credit Score
Car Loan
For most people, acquiring a car meant getting yourself a car loan. Like mortgages, your score affects your ability to qualify for a car loan. If you do find a lender who will approve your loan, this can lead you having to pay for a larger interest rate. A poor credit score limits your options. Also, having bad credit can mean you’ll be billed for a higher monthly car note.
Business Loan
Not everyone who wants to start a business can afford to fund their endeavor. Most will take up even a small business loan to realize their dream of starting their own company. Aside from your income, employment, and possibly collateral, one of the things you need to have is a good credit score. Like mortgages and car loans, the better your score, the better the terms and the higher chances you of obtaining the funds you need for your business.
Also Read: How Good Does Your Credit Have to Be for a Business Loan?
Job Search
It may not seem likely, but a lot of companies conduct credit checks when hiring their employees. The company you’re applying can have your credit report checked as part of their hiring process. They take a look at your report to see how financially responsible you are. Some institutions, especially those that are financially-related or companies that are looking to promote their employees for an executive position check on their candidate’s credit before proceeding.
Utility Services
That’s right. Even your ability to establish a utility service can get compromised due to your poor credit score. For example, your local cable company will use your credit score to check how responsible you are in paying your dues on time. Having a poor score can mean you fail to show them you’re a good payer, which can lead to a rejection of their service.
