Financial

The Essentials of Scores – 101

Reasons to Know Your Credit Score

when you have a poor credit score, you will experience some of the negative effects. Abilities to borrow money in the near future call be affected by a poor credit score even if it took place some time back, missed payments, and overspending on credit limits will have a lasting effect on taking out a phone contract, signing up for a another credit card or even applying for a loan. There are some advantages of minding your credit scorer and ensuring that it stays at a good level. Let us explore.

1. Paying for 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. There is freedom when it comes to beautifying your home and constructing extension when owning your home, and they are worth a lot of money which can be sold or even passed down to your siblings as inheritance. A poor credit history will make your passage to the property ladder a very difficult thing. It is very impossible for you to get a loan with bad credit because lenders will view lending to you as a risk.

2. Working opportunities.
The consequences to having a poor credit score doesn’t only affect your ability to borrow money. 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. Like if you have a poor credit score and you want to work with a finance industry, your chances of getting a job at a bank or any financial institution are less.

3. Acquiring the Necessary Funds.
While nobody likes to imagine themselves in a certain situation whereby borrowing funds is unavoidable, no one is guaranteed that it won’t happen. When you find yourself in such a situation where you are in need of emergency funds, your ability to apply for a quick loan, or taking out your credit card will come in handy. When you have a poor credit score, it means that you are at a higher risk of your loan application getting rejected if you ever need to borrow money in future.

4. Acquiring a Business Loan.
Because entrepreneurship is now within reach more than ever, more and more investors are starting their own trades. 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. Despite there being other alternatives, for instance, crowdfunding or other angel investors, most investors source for loans from banks. Even though the monies are meant only for commercial purposes only, your lender will still have a look at your credit rating.