Monday, July 13, 2009

Good Credit vs Bad Credit

Good credit gives you a great financial life. Credit reports are used for a number of tasks, like establishing utility accounts, purchasing a home, getting employed, etc. If you have a good credit, you will make these routine tasks easier for you. Poor credit makes it tough to open bank accounts, rent real estates, or get affordable interest rates on loans you make, while good credit makes these things a cake walk.

Favorable rates of interest describe the importance of a good credit. People having a good credit report are assumed to be more trustworthy and low interest rates are offered to them on the basis of their credit report that suggests that they have a lower credit risk. People with bad credit find it tough to qualify for low interest rates. They are considered defaulters by creditors and have to go on paying hefty interests.

Good credit is significant for those who want to apply for credit cards and lines of credit. Poor credit denies a person of further credit and low interest rates. People with good credit records get higher balance limits as compared to people with poor credit records. Getting higher balance limits allows more flexibility with a line of credit and can be extremely useful. They might just also get a waiver for annual fees.

Even phone and electric companies check credit before they open new accounts. In case of a poor credit they may deny an account or ask for an exorbitant deposit. Landlords also tend to deny rental applications if the applicant does not have a good credit history viewing them as potentially risky tenants.

There are a number of things that can affect your credit record. It is necessary to safeguard your credit record by checking your credit report at regular intervals of time. Checking your credit report on a regular basis also helps you protect identity theft and helps improve your credit score. People are also wising up to the fact that timely payments are crucial in order to repair their credit report. It is not impossible to go from a pathetic credit score to a good credit score. It takes time though but is both practicable and possible.

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