Credit—Why does it matter?
Over the years, I’ve had many younger customers that were shocked because the payment on the car they wanted was too high. The problem wasn’t that they didn’t use a financial calculator; the problem was that they underestimated the impact of not paying their bills on time. Unfortunately, when you are starting out with credit cards, rent payments, and utilities, many people don’t see the value of paying their bills on time. It doesn’t seem like such a big deal when you are young and really don’t need anything. But when you go to buy a house or a car, the interest rate that you qualify for is based largely on how well you paid your bills in the past. You see, a lender wants to ensure they’ll get their money back on time. If there is a chance that every payment will be late, then they expect to be able to make more money in interest based on the risk. The good news is that you can affect this by showing a history of good payment. The best thing to do is to begin paying your bills ahead of time, and then if you run into problems, your new late will be the lender’s “right on time.”
If you have any questions regarding credit feel free to contact me directly (513) 932-1010 x128 or email firstname.lastname@example.org.