If you were born during or after the 90s then you probably lived through coming up of Facebook when you were in college or school. Do you remember how some people used to judge you based on the number of followers or friends you had? Well consider having a credit score as the number of followers you have. But in this case, the people who are judging you for your rating can either make your life better or worse in a very serious way.
For people who are not educated about the financial world won’t think much of their credit rating when they are young or just starting out with a job. They would think how bad can one missed payment be? Let me show you how your credit rating can affect your life in the future.
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FOR BETTER EMPLOYMENT
Now, this doesn’t happen everywhere, but the frequency has increased. Whenever some company is thinking of hiring you, they will try to look at your credit score, credit rating or your financial history. You might think that this step is a breach of privacy or a little too much, but it makes perfect sense for them to do it.
Why would you want to hire someone who isn’t careful with his or her finances? You don’t expect them to be efficient on the job as well. your credit rating can affect your future promotions, job prospects etc.
Don’t worry, companies don’t do this sneakily or behind your back, a lot of times they will make you sign a contract allowing them to check your credit ratings.
YOUR LIVING SITUATION
Your credit score or rating is like your ability to manage finances summed up in one number. If anyone wants to give you a house for rent or give you a house loan will see your credit score as a judge of character. This character will determine the likelihood of you repaying that loan or paying the rent.
If you have a lower score two things will happen, either you won’t get a loan, or you will get a mortgage with much worse conditions. These conditions include adjustable rates, higher interest rates etc. even if you are just looking for an apartment on rent, the landlord will be hesitant to give you a house if you have a bad credit score.
Your credit score will even help you out when looking for a payday loan. Bad credit loans have extraordinarily high interest rates, have you seen adds for payday loans online no credit check instant approval? The reason why they don’t check your credit is because most of the people who will go to them have been rejected by big banks because of their credit scores and this means that lenders can take advantage of desperate people and charge high interest rates.