Building good credit is important especially if you want to finance any large purchases like your home, car, education, etc. Maintaining good credit will show creditors or lenders, whom you are borrowing money from, that you are responsible and have the ability to pay back the money that you borrow in a timely fashion. Creditors use your credit history to determine how much interest that you would have to pay on a loan. If you are considered to have good credit, you are more likely to get a lower interest rate because you are of less risk of not being able to pay back the money that you owe.
Some employers also check your credit score before hiring. An employer that is checking for credit scores during the hiring process might be looking for someone that is responsible and reliable. If you are not responsible and reliable with your money, how would you fare in a workplace where your coworkers and company will rely on you.
Maintaining good credit will show that you are financially responsible and on the right track. The economy runs on credit and if you need to borrow money, you must maintain a good credit history.
Written by: Tony Li, Financial Wellness Peer Educator, University of Illinois Extension, 2018.
Reviewed by Kathy Sweedler, Consumer Economics Educator, University of Illinois Extension.