Does Credit Mean That You Have to Have It?

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Often people wonder if they can just get by without having credit.  It is possible to live a life without accumulating debts but it is very difficult in a society that is based on credit.  Does credit mean that you have to get in debt in order to make a purchase?  Not necessarily, credit is there for those who could not otherwise purchase the item due to it being expensive.  But you do not want to purchase so much that you cannot repay it.  

Does credit help or hurt you in the long run?  Ideally credit is supposed to help you in making those purchases such as a home or vehicle which are necessary in life.  These items are much too expensive to pay outright cash for so lenders extend credit based on your credit score.  If you have been fairly good about repaying your debts your credit score will reflect this and lenders will be happy to help you get your dream home or car.  If your rating is poor, lenders often have to pass on extending a loan to you because of your past performance in handling credit.

Does credit play a role in whether or not you get the job?  Some employers these days are taking into consideration a potential employee’s credit score in deciding whether or not to give them a job.  Yes your credit rating is being used as a factor in employment.  Potential employers want to see how you handle your personal finances because business is about responsibility and handling money.  If you are not responsible in your personal financial life, employers feel that you would not be responsible on the job either.

Does credit truly reflect your financial character?  Since you are being judged financially by your credit score, it is often the thought that people are judging your character as a person as well.  Some lenders will take into consideration that circumstances may have been beyond your control and you found yourself in a financial mess.  Other times, they are making character assumptions based on your credit history.  Bad things happen to good people and there are lenders who are willing to look at your situation and what you are doing now.

Does credit follow you your whole life? No, bad credit can stay on your credit report for up to 7 years and a bankruptcy can remain for up to 10 years.


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