We all know the importance of having good credit. It helps us to purchase a home, get a car, get a credit card for emergencies, etc etc. There is no disputing whether or not it is important to have good credit.
But what about for people who are already in debt? What about if I’ve already gotten the home I want, a dependable car to drive, and a few credit cards to use? If I’ve already secured the credit I want, am I okay to let my credit go down the drain from there?
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Okay, so what about if I’m already in pretty deep debt? What if I feel that I already have so much credit to my name that no lender would lend to me anyway? Why bother caring at that point?
Or let’s say I’ve gotten into credit trouble in the past. Because of the heartache and stress that I’ve gone through because of this darn credit game, I have no desire to ever get credit again in the future! I don’t think my credit matters, because I am not going to be using credit again in the future. I’m going to use cash to pay for everything from here on out! If those are my feelings, then am I safe to assume that I don’t need to worry about my credit score?
The truth is, it is still extremely important to take good care of your credit, even when you’re already in debt. Let’s discuss some of the reasons.
4 Reasons Why You Need Good Credit Even When You’re In Debt:
1. You May Need Your Credit In The Future
You may currently be saying to yourself that you will never have need of credit in the future. You may feel that you already have all of the loans you need. Or you may have had bad experiences with credit that have left you with a bad taste. But in actuality, you have no way of predicting the future. It isn’t possible to always pay cash for everything. What if you decide you want to buy a new house later on down the road? If you haven’t kept up good credit, that dream may become impossible. But if you’ve kept up good credit, preparing (just in case) for the future, then you won’t have any doors closed to you because of your poor choices.
2. Bad Credit Is Expensive!
Bad credit is dang expensive. Having bad credit can cost you thousands of dollars! Even if you already currently have a lot of debt and you think you won’t be able to be approved in the future, or if you think you won’t want to use credit in the future, you never know what the future holds. But if you don’t try to keep up your credit even while you’re in debt, you will regret it in the future. The higher interest rates you will be charged because of poor credit could cost you thousands of dollars. So keep your credit clean, even if you already have debt, to help you be better prepared to save money in the future.
3. Your Credit Counts For More Than Just Purchases
Even if you know for certain that you will never want to take out another loan or credit card again, that still doesn’t mean that your credit isn’t important. That is because your credit isn’t just used for loans or credit cards.
Many insurance companies check your credit when you apply for an insurance policy with them, and the poorer your credit is, the higher your interest rates will be. Your credit could also be checked when you apply to rent a house or apartment, or even if you apply for a new job. So having poor credit could affect more than just your ability to take out a loan. It could cause you to be charged more for car insurance, be declined for a home you want to rent, or it could cause you to miss out on that dream job opportunity that comes your way.
4. It Can Take Years to Repair Your Credit
It is harder to repair your credit than it is to keep it clean in the first place. It is much easier to make good decisions now, paying your bills on time and paying off your debts, than it is to try to fix your credit once it’s already been ruined. It’s very possible to work to repair your credit. But of course it isn’t as easy as keeping it clean in the first place. So common sense states that it is much more beneficial to work now to keep your credit clean by doing the few simple steps of paying your bills on time, than it is to work to fix your credit once you’ve already made those mistakes.