Establishing good credit makes life all-around easy. Want to buy a new car and need a loan? No problem. Want to buy a house? Mortgage lenders have no problem working with you. In fact, by establishing and maintaining good credit, you’ll be able to get loans with lower interest rates, which saves you a lot of money in the long run. Since credit is used for so many things in life, it’s important to have good credit. Establishing good credit now pays off in the long run when it comes time for the big financial decisions in life. Here’s a few things to keep in mind when it comes time to establishing credit (and why you really do not want bad credit).

Starting a Business

Dreaming of starting your own business? If you have bad credit, you may need to rethink that dream for the time being. Most business startups require a sizable amount of cash that you might not have available. In that case, you’ll need a small business loan. You need good credit to qualify for the business loan, and you’ll run into similar problems as you would with an auto loan or mortgage.

Buying/Renting a Home

Mortgage lenders don’t want to award loans to anyone who might default on them. If you have bad credit, the mortgage lender will consider it risky to give you a mortgage. What does this mean? If you are approved for a loan, you’ll have a higher interest rate than those with good credit. A higher interest rate on the loan means your monthly mortgage payment will be higher, and you’ll dole out more money than someone with good credit in the long-run. Plus, you run the risk of having your mortgage application turned down completely if you have bad credit.

Even if you’re not buying a house, good credit is still important when renting an apartment. Landlords will run a credit check, which affects whether or not they want to rent to you. Landlords want to collect money on their properties, and want to know this money will be coming in consistently and on-time each month. If you don’t have good credit, you could be denied an apartment because your credit score is a glimpse into your level of financial responsibility.

Buying a Car

Unless you pay for your car entirely in cash, you need an auto loan. Your credit first affects whether or not you qualify for an auto loan. Generally, applicants with good credit qualify for larger loan amounts with lower interest rates than those with bad credit.

Bad credit limits your options. If you have bad credit, fewer lenders will work with you. If they do decide to, they will charge you a higher interest rate on your loan, which means a higher monthly payment and more money shelled out in the long run for your car.

Searching for a Job

Many employers conduct credit checks as part of the hiring process. If you haven’t demonstrated financial responsibility, many employers may be hesitant to hire you. Maybe your level of debt is too high for the offered salary. This may come into play when you’re up for a promotion or raise, especially for financial-related or executive positions.

Paying the Bills

Credit is needed to establish utility service. Bet you didn’t know that. Your electric company says that you’re borrowing one month of electric service, which you’ll need to pay back each month. Before turning on your electricity, the company checks your credit. This applies to most service utilities, such as cable, telephone, water and even cell phone service.

Since your credit is defined by how you’ve paid your bills in the past, many businesses use your credit to predict your future financial responsibility. Whenever you need to borrow money, or certain services, your credit is always called into question. This means that establishing and maintaining good credit is crucial and affects virtually every aspect of your life as an adult. Do yourself a favor: establish good credit and maintain it for an easy, breezy financial future.

Are you struggling to repair your credit? That can feel like you’ve dug a hole so deep, it’s impossible to get yourself out. Don’t panic, just call in the experts. Reach out to me today for more information on how I can help you start on the path to repairing your credit and taking your finances back.

C. Thomas Gambrell, known for living to make Sunshine (AKA his wife) laugh, is a lover of tropical beaches, sushi, marketplace ministry and everything corn (popcorn, tortilla chips, nachos, grits, etc.). As a nationally acclaimed business success coach he helps people give birth to new belief systems, bodies and businesses. Find out more about his proven success strategies with his popular FREE Resources, available at

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About C. Thomas Gambrell

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