What is credit and why you should know how to build it?
How is it possible that a three-digit number can have so much control over someone’s financial future, you ask? Frankly, you wouldn’t even know this if you didn’t manage your credit right, pay your bills on time, or you happened to miss paying that hospital emergency room bill. It’s easy to forget! You were busy studying for your finals, turning in your thesis projects, and applying for your first “real” job.
Getting denied for your first apartment, or your first “good” car, is really discouraging for a new graduate, and moving back in with your parents is just heart breaking.
So, how is it possible that a three-digit number can have so much effect on one’s financial future?
Credit is EVERYTHING!
Experian, Transunion, and Equifax are the three consumer credit bureaus that collect information on one’s financial “health”, so to speak. This information is than sold to insurance companies, employers, banks, car dealerships, apartment rental companies, and anyone who wishes to check one’s credit “worthiness” in order to extend them credit.
People with lower credit scores pay thousands more in interest for loans, and insurance, and most of all they can get denied credit for cars, credit cards, home loans, and even housing and employment.
Therefore, it is imperative that one understands how to manage their credit, and guard it with utmost respect and care!!