Does Credit Really Matter

I was recently talking to my 19 year old stepson about his finances and he said that while he knew he should catch up on his credit card payments his credit score was ruined now and he didn’t think it really mattered anyway. He is in a summer job that pays him in cash weekly. When he finishes there he will probably move in with a relative and just carry on doing small jobs. That seems great for a teenager, as long as he has money in his pocket he doesnt care.

Bad Credit Affects Your Life
If you think that it is not serious if you miss a payment or three while you are a teenager and someone else (your parents usually) will bail you out, you are mistaken. Your credit score follows you throughout your life and when you need credit the most you will be in serious trouble.

What are the biggest purchases you will ever make?
-College
-Car
-Home

All these things can be affected by a bad credit score, you could well be refused loans or charged a much higher rate for borrowing if you have a bad credit history. The car loan that you thought would cost you $200 a month could well end up costing you $300 a month just because you didn’t make regular payments on your credit cards when you were 19 or 20.

After College
You manage to get into college and spend the next three or four years with your head in the books working hard. You graduate and now you are ready to get out there into the big world, but once again your earlier credit card disaster comes back to bite you.

-Jobs
-Apartment rental

Both of these will run a credit check on you and if they find your credit score is bad they will either turn you down (it doesnt matter how perfect you think you are for the job) or they will charge you a premium for renting their apartment. So you can see how credit and your credit score really does matter, not just today but for the rest of your life. Your credit score can help or hurt you.

What Can I Do
If you realize your credit score is less than stellar you can do things to improve it. The first thing you should do is go to https://www.annualcreditreport.com and get a free credit report. This site is mandated by the government and you cna get a credit report from each of the credit bureaus once a year. Look at your credit report and see what it says, if there are outstanding payments, contact the company and pay the owed money. Make notes of who you speak to and what they say so you can prove you have paid the debt. Ask the company to confirm that they will notify the credit bureaus that you have paid them.

Getting your report fixed up so it is accurate will take time but it really is worth it as you will save money on just about every financial transaction you do throughout your life.

Instead of wondering how to get credit everyone should be learning how to nurture their credit and make their credit score work for them.