How Does Credit Rating Affect Your Life

Many people don’t bother to keep an eye on their credit rating; some never even check theirs at all.

It's easy to underestimate the value of credit ratings, but the fact is; if you don’t belong in the high income club and can’t afford to buy everything with cash, your credit rating represents the quality of life you live.  The following are some of the known ways on how your credit rating affects the quality of life. 

Bargaining power, borrowing: 

Have you ever done your shopping in a market place? Have you noticed how several traders were vying for your attention, each trying to convince you that theirs is value for money, best quality etc? Well, in this example, you are in a position of power; they have the same product and you have the simple task of choosing between them. If you exercise your power, frequently you'd be able to either bring the price down or get more goods than originally quoted. 

If you look closely, similar patterns are repeated in nearly all aspect of life, as regards to credit (i.e. loans, credit cards, etc), a credit rating is the preferred currency for just how valuable a customer you are. 

If you took the time to count, you may see that there are a big number of credit card providers available and they all need more customers. 

If you have a good credit rating, like buying goods in a market, you're in a position of power; credit card providers are willing to outbid one another in an attempt to get your business. This is expressed via attractive niceties like 0% balance transfer, 0% interest on purchases, air miles, reward points, cash back and many others. 

If you have bad credit on the other hand, none of these niceties will be available to you, as a matter of fact, most lenders will just stay away from you. Those that lend to you on bad credit cards will usually charge you double the amount of interest a good credit customer pays. 

Special deals and promotions: 

Recently, shops and supermarkets are also getting in on the act; in an effort to sell you that new fridge or sofa, retailers will give it to you on an 'Interest free period' frequently with nothing to pay upfront. But wait, you can only get this deal if you have a good credit rating; people with bad credit will need to pay the full price upfront. 

When it comes to buying cars, while certain lenders will accept people with bad credit ratings, it's on higher interest loans, eventually the person with bad credit pays more for the same car. 

Employment: 

This one may sound a little strange but some employers find it necessary to examine your credit report and check your credit rating before making a decision whether to hire you for the job or not. Maybe it's to determine if you will steal company funds or maybe it's to find out whether you'll demand a pay rise because of your financial iniquities! 

As you can see life can cost a little more if you happen to have a bad credit rating while if you have a good credit rating, you may even take advantage of all the gimmicks lenders use to lure new customers. 

With that in mind, if you have a bad credit score or rating, you may want to work on improving it and if you already have a good credit score or rating, use it to your advantage!