Using and building consumer credit can either benefit your life or damage your finances, depending upon how you use it. Let’s first look at the benefits of having good credit. Above all, a positive credit reputation can mean that the cost of borrowing money is lower, making homeownership, for example, much more affordable.
Additionally, good credit can mean that you are more likely to be hired over an equally qualified candidate who might have poor credit.
- Good credit can lead to qualifying for a more affordable apartment lease than you might otherwise get.
- Good credit can be the difference in qualifying for a utilities account without a security deposit.
- Good credit can qualify you for a monthly cell phone service plan that comes with a lower monthly cost and with perks not available to those with poor credit.
- Your good credit can even mean you pay smaller monthly premiums on your car or truck insurance than your neighbor with a similar driving record and vehicle but who has poor credit.
As we share information about consumer credit, its benefits, and its challenges, keep in mind that your credit history and rating are not reflections of who you are as a person nor of your value to society. Do not get hung up on building credit for credit’s sake. Using credit inappropriately, like the improper use of a simple hammer and a nail, can also lead to great pain and frustration.
Let’s go over some of the downsides to consumer credit, particularly for those who abuse it, neglect it, or use it unwisely.
