RGG Law Explains Why Good Credit Is So Important
You have likely heard of having “good credit”, or a “good credit score”, but how much can having good credit actually affect your life? Being experts in filing bankruptcy and bankruptcy law, RGG Law’s bankruptcy lawyers and attorneys have a knack for knowing credit. RGG Law can offer some insight into why your credit score matters, and what kind of things can change for better or worse, depending on whether your credit is good or bad.
What Is Credit?
To give a brief definition, credit and your credit score is a metric attached to you that is based on your potential financial liability. Your credit score is determined typically by how much credit you have used, and how well you have managed to pay it off.
Dealing with debt responsibly and paying off enough on a regular basis contributes to a good credit score, while falling behind on debts and payments makes it worse. The credit score will give a number, while a full credit report will show historical payment of bills, loans used, whether you have filed bankruptcy and more detailed information.
How Much You Can Borrow
It might seem counterintuitive for a bankruptcy law firm to talk about borrowing money, but at RGG Law, we also understand that it is almost impossible to live in a modern society without using credit. Credit cards, bank loans, private loans, overdrafts – almost everyone has some form of debt that they shrug their shoulders and accept as part of 21st-century life.
But how much you of that credit you are able to pay back will also determine how much you are able to borrow in future. If you start digging yourself deeper, your credit score will decrease. If your credit score decreases, it will be harder to get approved for more substantial loans, since you will be considered a risk.
The Job You Get
An unexpected potential side effect of your credit score is its ability to determine the job you get. Some employers may request a full credit report on a potential employee and use it as part of their assessment process as to whether that person is right for the job.
As we mentioned before, a credit report offers detailed information on your finances, and this can go a long way to affecting your job search – for better or worse. Even when employed, your overall credit score can sometimes be a factor in promotions or raises, depending on your employer.
The Car You Drive
We already mentioned being able to take out more substantial loans being determined by your credit, and what is one of the most common things people use a loan to pay for? Many of us have to make regular car payments on a vehicle or vehicles we bought through a loan, and these payments will depend on your credit.
Having a good credit score will make it easier to secure a loan to buy a car. The more you can secure in a loan, the better the car you will be able to comfortably afford.
The Home You Can Afford
Speaking of large loans, if you are looking to buy your first house, you need to be aware of your credit. Taking on a mortgage is a huge responsibility, and being able to secure the right loan to help you buy a home is dependent on your credit.
While there are programs available to help those with poorer credit, or who have previously filed for bankruptcy, to secure home loans, it can make the process longer and decreases your price range on homes you can afford. At RGG Law, we have seen many cases of bankruptcy that have resulted in buying a house that was simply too big, too expensive, or required too much work.
RGG Law Advises Keeping Your Credit Clean
Unfortunately, a downside to having good credit is that you need to use credit in the first place, in order to have debt to pay off. It might seem like this is a system that is setting you up to fail, but the bankruptcy lawyers at RGG Law know that with responsible use of loans and credit, and with careful payments and budgeting, you can equip yourself with a healthy credit score. If you are looking for legal help with your debts, contact a bankruptcy lawyer today.