Updated: March 26, 2012 at 12:49 pm PST
Repairing your credit often seems impossible and not worth the trouble. It takes years to fully repair your credit if you have a low credit score, and usually once you try to fix your finances, the job just seems too great. But good credit is crucial if you want certain things in life, such as a home or a car.
Credit scores are being used not only by banks and creditors but by a variety of businesses including merchants, utility companies, phone companies, insurance companies, landlords, and even employers. You can increase your chances for qualifying and getting better loan terms as well as securing a job.
Mortgage lenders want to know that you won’t default on your mortgage. If you don’t have good credit, the lender will consider it too risky to give you a mortgage loan. This could result in a higher cost of borrowing or worse, a denial of the loan.
Your credit also affects your ability to rent an apartment. Many landlords consider your credit rating as a measure of your responsibility to pay bills on time.
The insurance industry has argued that consumers with poor credit are more likely than people with high scores to file claims, so it is imperative to have the highest possible credit before getting insurance.
Finally, one of the biggest advantages of repairing your bad credit is being able to get lower interest rates and loans. Having good credit means you have more options available. Lenders will view you as less of a liability and will be more willing to give you better terms and rates.