In the United States, having a higher credit score gives you more chances. People think you're lucky if you have good credit and keep it that way, compared to those who have no credit at all. People tend to think that having a high credit score means that you are responsible with your money. Having a good credit score is also a sign of keeping your word. To sum up, a good reputation is equal to a high credit score.
Who wouldn't want to have a good name? If you are likely to apply for a credit programme and want to see "approved" on your application sheet, you should avoid the following:
- No credit rating.
If you have no credit score at all, lenders won't be able to judge how well you handle your money, even if you are good at it. Lending institutions decide whether or not to give you credit based on your credit score, since they can't tell much about your financial history from:
Race and place of birth. Lending institutions won't give you credit because you are black or white or because you are from the United States or Europe.
? the type of job and salary. Even if you work as a janitor, if you have good credit, your loan application might be approved over that of a company manager with no credit.
? Education. It doesn't matter if you went to college or not. What matters is that you have a high credit score.
Lending institutions can't use your religion, age, or marital status to decide whether or not to give you credit. This is because it is not a fact. The Equal Credit Opportunity Act says that credit scores are the most fair way to decide who gets credit.
Lending institutions will be able to find out about your financial history through your credit score. They will find out about the loans you've had in the past and the ones you have now, as well as the down payments you've made, the interest rates you choose, and, most importantly, the payment plan you've set up.
- Bad credit ratings.
In the US, the average credit score is between 580 and 650. There are big institutions in the US that decide whether or not you can get credit. Major organisations like Equifax, Trans Union, and Experian figure out a borrower's credit score. All three have their own ways of figuring out your credit score, but they all use the same average credit score.
If your credit score is below the average credit score, your credit applications are likely to be marked "disapproved."
Having credit is not so bad, but it will look terrible if you have been too young to handle it well. Most of the time, a credit card can come in handy, especially when cash is hard to come by. Also, some people think it's safer to carry credit cards than cash in your wallet.
On the other hand, loans are just as important as credit cards, especially for people who want to buy things they can't pay for right away.
With how important it is to have credit as a cash substitute, it helps to have a good or even a high credit score. There's nothing wrong with having a good credit score; you just have to be responsible with your money. If you do this, credit won't be a bother, but it will help you a lot.
