Money Matters

Cracking The Code And Unlocking The Mysteries Of Credit

Credit is something that gets mentioned time and again when finance is a topic. Yet the truth is that a lot of people don’t understand it. In fact, one-third of millennials don’t even know the shape their credit is in, never mind how important it can be. So, we’re going to look at some of the truths, half-truths, and downright misconceptions surrounding that mysterious credit.

First, check your score

If you haven’t done it, yet, then you absolutely have to. Most people are going to rely on loans at some point in their life. They might want a home or a car or a step to beginning a business. Yet they might assume that banks are simply obligated to agree to provide that loan. If they have bad credit, they’re going to find that a lot more difficult. More than that, they’re going to find that any interest on loans they do have is going to work against their favor if they have a bad credit score.

Ways to help it

Checking your credit report is important because it also allows you to identify whether the records are accurate or not. Negative records that prove false aren’t all that uncommon, but you need to know about them to dispute them. Otherwise, healthy credit simply depends on honoring agreements with creditors. Pay your bills, meet all loan repayment debts, and use credit wisely.

Ways to hurt it

As you might guess, getting in debt and falling behind will hurt credit. There are some bad tips that get spread that can also do that, however. For instance, paying off a loan before the agreed date is not a credit healthy practice. You’re breaking the agreement just as you would if you were to fall behind on payments. Though the loan is no longer something to worry about, that contractual break will linger on your report.

The doors that open and close

As we’ve stated, getting a home, a car or a business is going to be a lot easier and more financially sound with good credit. Those aren’t the only things that credit affects, however. Employers and landlords might not be able to see your credit score, but they can request to see your credit record. If they see that you have broken any agreements in the past, that can cloud their judgment of you and whether they give you the job or the home.

What if your credit is really that bad?

You are not entirely without options if your credit score is lower than you would like. There are always those who will provide loans with no credit check at all. These loans usually use some sort of a security, whether it’s a car, a home or other possessions. They can be a good way to secure funds but you should make totally sure you’re good to repay them before you take them.

So, yes, credit really is that important, but it’s also not the only option to get money that you have available. You always have options, whether it’s a loan or a way to improve your credit. Once you know that, it becomes a lot easier to see the benefits.

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