Is it important to have a credit report? A lot of people don't put too much stock in their credit score. Some people, even though they know it's important, don't care too much about the issue or understand why it's important. Well, those people should at least know what some of the ways are that credit reports are used in the world we live in.
Lenders
Even though it may seem obvious, the main purpose of credit reports is to figure out how risky it is to lend you money. Lenders only care about one thing: getting paid back. Their whole business is based on making sure this happens. So, they made a credit score that tells them how likely you are to pay them back. This number is then used to decide whether or not to give you credit. Even though this is the main goal, some more experienced lenders want to get a bigger piece of the market. To do this, they create different types of loans that people with lower credit scores can qualify for. The price you pay for having a low credit score is that these loans will always have higher interest rates and other less-than-ideal terms.
Since loans are used to pay for homes, education, cars, and most other big purchases, you should care about your credit report and try to keep it in as good of shape as possible. Not being able to get credit or only being able to get it at less desirable terms and rates is a big reason to do so.
When you apply to rent or lease a place to live, your credit report is also used. Most of the time, this is because the landlord wants to make sure you'll be able to pay your rent when it's due. So it's important to keep your credit score in good shape at this point if you want to rent or lease a home in the future.
Employers are also starting to look at credit scores when deciding whether or not to hire someone. Employers use credit reports for different reasons, but everyone agrees that a good credit report and a history of paying bills on time is a good sign that the job applicant is reliable and worth hiring. Even though it seems a little strange that the people who will need a job the most will be the ones who can't get one, that's the way things are going.
