Is a Good Credit Score Important?
It is a good idea to think about your credit score at times and to check that you are doing what you can to make sure that it is good. This is because it is important in certain situations.
When you Want to Borrow Money
This is probably the main one that people think about when they are considering credit checks. It is well known that it is a legal requirement that lenders do a credit check. Most of them will also want to have a look at your status as well to judge whether they feel that you are capable of repaying the loan that you are applying for. It is important to have this borrowing facility available to you because you will want to make sure that you can get money if you need it or want it. For example, if you want to buy a home you will need to have a good credit record and if you need money in an emergency and want to borrow it. Even if you just want a credit card to use to make safe online purchases, then you will need a good credit record to get one. So even if you think that this is not really important to you, because you feel that you will not need a loan as you are doing okay, it is good to be prepared as no one quite knows what the future might bring.
When you Want to Rent a Home
If you are looking for a place to rent, then your potential landlord will do a credit check. They will want to look for evidence that you will be responsible and pay your rent on time. Therefore, they will want to see that you have made regular repayments in the past and that you do not have lots of debt which could indicate that you will struggle to pay rent. It is a good idea to make sure that you are prepared for this sort of credit check. If you are already in a rental, then you never know when your landlord might want to sell up and move you on and you will have to find accommodation elsewhere and will need to be able to pass their credit check. If you are in a home you own, then the risk is lower, that you will need to rent a place, but it is wise to keep up with those mortgage payments to ensure you are not at risk of losing that home as it is unlikely you will pass a credit check to get a rental after that.
When you Sign up for a Mobile Phone Contract
You may find that a credit check will be done if you sign up to a mobile phone contract. This is because you will need to make regular payments and the company will want to check that you are capable of doing this. If you do not pass a credit check it could mean that you will have to find the money to buy a phone yourself and you may struggle to afford the phone that you want like this. You may also have to pay as you go with the phone and that could be expensive if you use your phone a lot.
When you Change Utility Companies
Utility companies may also do a credit check because they will want to make sure that you will be capable of making the regular payments that are required. They want to check whether they can charge you monthly or whether they will need to install a pre payment meter. These can be fitted and you will need to top them up in order to have electricity to use and they tend to be more expensive than paying when you are billed and so you want to avoid these if you can.