With the failing economy, it may seem like your credit score doesn’t really matter, when in fact it does – even if folks with good credit are getting turned down for loans and other things that require a credit check. Remember, having good credit means you can have things like a cell phone plan or be able to rent a cheaper apartment if you’re moving. So why should it matter, and what can you do about it?
Like I just mentioned, having a good score is important if you’re getting a cell phone plan so you can stay in touch with friends and relatives. Even if you can pay off the monthly bills, you can still be rejected due to other conflicting matters, such as inactivity shutting down your credit card. Ditto for renting an apartment or house – landlords do credit checks to make sure you pay your bills on time, which means you can pay rent on time. If you’re looking for a job or thinking about applying for a new one, there’s a pretty good chance your employer will do a credit check to make sure you can concentrate on your job and not your finances. Your insurance can also be affected – for those of us living in cities where driving is a necessity, that means bad credit could drive up your premiums through the roof (forgive the pun!), meaning you could be wasting money instead of saving it.
So what can you do about it? Of course, pay your bills on time – and pay off your debts as soon as you can. Using your credit card should be an emergency only, but be aware that complete inactivity means that cards will get shut down, and poof goes your emergency credit. Also, be aware that if you can’t make a minimum payment, contact the company to see about adjusting your rate so that you won’t be reported. Don’t take out more debt to pay off debt – it creates a cycle that may not ever resolve itself. Make sure you’re paying that debt down! It helps to remember how much is enough stuff for you, whether a little or a lot.
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