You never really realize just how important your credit is until you need it one day. Believe it or not, your credit score can affect more than just your ability to get a car loan or a home loan. Did you know that a bad credit score can make your insurance premiums go up and even prevent you from getting utilities in your name?
Just imagine that you are finally ready to get
your own apartment and you find out that your credit score isn’t good enough to
pass the application process.
This can be devastating and make you feel defeated. It’s important that you learn how to use your credit responsibly and build your credit at a young age. Your credit history can start as early as eighteen years old and you can start your credit by getting a credit card.
It’s always a good idea to start out with a
credit card that has a low credit limit of around five hundred dollars so that
you don’t rack up thousands of dollars in credit card debt.
You will also want to make sure that you have your monthly payment set up to come out of your checking account two or three days prior to its due date. When you have automatic payments set up you will be sure to make all of your payments on time which will help increase your score.
Never charge too much on your credit cards. The rule of thumb is to only charge between ten and twenty percent of the credit limit on your cards because anything higher than this amount will actually hurt your credit score.
Do I need good credit to buy a car?
You will need at least a credit score of about 560 to even be considered for an auto loan without a cosigner. Lenders will look at several factors when you apply for a car loan such as your credit score, length of credit history, negative accounts or charge-offs and employment.
Without current employment, an income of at least fourteen to sixteen hundred dollars a month, you will more than likely be denied a loan for a vehicle. If you have less than perfect credit you can always get a co-signer to help you get the loan. A good size down payment will also sway lenders into giving you the loan with bad credit.
Do I need good credit to rent an apartment?
They will run your credit report before approving you for an apartment. Bad credit doesn’t necessarily disqualify you but there will be more requirements for you if you have less than perfect credit. Most of the time if you have a low credit score the leasing agent will make you put down a bigger deposit and maybe even make you pay several months of rent upfront.
Having an eviction on your credit report will hurt you worse than a bad or low credit score. It’s going to be nearly impossible for you to rent an apartment with an eviction on your record.
Do I need good credit to get electricity?
When you apply for electricity a credit report will be run. However, no deposit energy will allow you to get electricity in your name with a bad credit score. With this type of electricity you will usually pre-pay for estimated electricity cost before the service starts.
There are some great no deposit energy providers with reasonable rates and great customer service available to you.