What Is a Good Credit Score and Why Does It Matter?
Finance companies, banks, and lenders look at your credit score to check whether your debt payment history is impeccable or not. They don’t feel comfortable to lend to someone who has a history of defaulting on debt payments. The biggest reason for a bad credit score is not paying your monthly installments on time.
On the other hand, somebody with a long history of credit but good payment history has a better credit score and lenders are more like to lend credit to him or her.
So whether you want to buy a home or a car, if your credit score is good, you get the mortgage without any problem. But if your credit score is bad, nobody is ready to lend you.
It is almost a similar situation when you try to find a home on rent. The new landlord would normally like to see your credit report and the fact how you have been paying off your previous landlord. He would be interested to know if there was any payment default, or if you have been evicted because you did not pay. But if your credit report is clean and flawless, the landlord may happily rent his home to you.
Even employers are known to check credit scores before offering a job. People with seriously bad credit are often declined a job that he or she may otherwise qualify for. This means credit score has a serious bearing on someone’s financial and social life.