Importance of a Good Credit Rating

There are many reasons why a good credit rating is important to almost every individual. In the currents times more and more decisions by various people and businesses are getting dependent on the information present on the credit file of a person. The credit history is used to measure the reliability off a person to make payments on a service or utility by various different providers.

A good credit report is important in all of the following cases:

Good Credit Rating for Home and Shelter

You do not need a good credit report just for getting a home mortgage loan but also when you are looking for a house on the rental. It has become a common practice in major housing societies to check the credit report of a person before giving an apartment or a house on rent. Landlords consider the lease on a home as a loan. Having a good credit history will demonstrate to the lender whether you will be responsible with paying him back on the lease and rent the time comes. A mortgage loan is one of the major loans that an individual is likely to take in his lifetime. Blemishes on the credit report will most likely result in the rejection of the credit application or in a much higher interest rate.

Good Credit Rating for Transportation

Similar to a mortgage form loan your credit history will be called into account when you want to take a loan to purchase an automobile. It will also impact the interest rate on the loan as well as the premium on the insurance that you get for your automobile.

Good Credit Rating for Employment

Many employers have taken to check the credit history of potential employers before hiring them. It is commonly believed that a person with no debt hassles is a happy person and performs better at work. A good credit history also demonstrates a person who is better at managing personal affairs and financial matters which could be translated as a reflection of his ability to work in a steadfast and responsible manner.

Good Credit Rating for Utility Services

It may come as a surprise but here credit report may also be checked before you are approved for a utility service. Utility services such as electricity or cable television will see the credit report of an individual before considering several factors such as requirement of down payment. Sometimes the rate may also differ from a person with a good credit rating to a person with a substandard credit rating. This usually applies to most utility services such as cable television, telephone, water and even mobile phones.

Good Credit Rating for Other Kinds of Loans

Any and all can of loans such as personal loans, small-business loans etc. will depend upon the information present on your credit file. The better your credit rating the more likely are you to be approved for a loan and with better terms and conditions.