Does Credit Matter If I’m Not Applying for a Loan?
“Why do I need to worry about my credit if I am not planning to apply for a loan?” The previous question represents a growing sentiment amongst consumers – the idea that living a life unaffected by credit is not only possible, but something for which to strive. Unfortunately for these consumers the hope of going through life free from the “shackles” of credit reports and scores is downright impossible. That simply is not the world in which we live.
It is understandable why you might wish to live a life unaffected by credit. Perhaps you watched your parents or other loved ones struggle with the ramifications of uncontrolled credit card debt, collection accounts, low credit scores, and other credit problems. You yourself may have made credit mistakes in the past and the thought of trying to climb out of that hole and rebuild may seem daunting. However, the fact of the matter remains that if you have poor credit you need to take steps to improve it. Ignoring the problem and pretending as if your credit does not matter because you do not plan to apply for a loan is not only naive, in the long run it will hurt you financially.
Other Times Your Credit Matters
Even if you do not plan to apply for a new auto loan, personal loan, or mortgage anytime in the near future the condition of your credit still matters a great deal. Check out these 4 examples below of times when having no credit or credit problems can hurt you, times which have nothing to do with a loan or credit card application.
- The Next Time You Open a New Utility or Mobile Phone Account
Planning to switch cable or satellite providers ever again? What about your mobile phone carrier? If you are moving then you will probably be applying for new electric, water, and possibly gas service as well. Your credit will routinely matter in every single one of these circumstances. Bad credit can lead to you being turned down for service (especially in the case of a mobile phone or cable/satellite account) or perhaps being required to pay a higher deposit to obtain service.
- The Next Time You Apply for Insurance Coverage
Believe it or not, the condition of your credit will probably matter whenever you apply for home or auto insurance. In fact the condition of your credit might even be more important to an insurer than your driving record. Insurance companies use credit as a tool to help them predict the risk of taking you on as a customer. Why? Because poor credit signifies a higher likelihood to file claims. As a result, if your credit has problems you will most likely find yourself paying higher insurance premiums than you would have paid otherwise.
- The Next Time You Apply for a Job
Your credit scores do not matter whenever you apply for a job, but your credit reports certainly can. If you have blemishes on your credit reports then landing that next job or promotion you are after could potentially become difficult. In truth not every company checks credit reports as part of their employment screening process, but plenty do. Some employers will not hire people with certain red flags on their credit reports. Others might pass your application over for the next guy, especially if you are both equally qualified for the position but you have credit problems and another applicant does not.
- The Next Time You Try to Rent a Place to Live
Unless you are lucky enough to own your home outright or you rent from a loved one, your credit will almost certainly come into play the next time you try to rent a new home or an apartment. Many landlords and apartment complexes will refuse to rent to you if your credit is bad.
Others might still allow you to lease a place to live, especially if your credit issues are not too severe, but you can count on at least a strong possibility of increased deposits being required up front.