The use of credit in today’s “must have it now” society continues to grow at a rapid pace. Just the other day I was speaking with an friend trying to get their financial house in order.

They have started putting everything on their credit card and paying the card off in full every month. Their reason is for this plan is they can see where they are spending money since the online statement gives them a break down.

The shock on their face when I told them they were using credit for their purchases and not cash was amazing. They never thought of it that way. As I mentioned in the credit overview a credit card is not cash!

Credit finds its way for more uses than getting a loan or signing up for a credit card. More businesses are looking at your credit as a way to measure doing business with you and supplying services.

How does having good credit affect our daily life? Let’s see…

The Place We Call Home

If you are buying a home, renting an apartment, condo, townhouse or home the lender or landloard wants to know they will be paid and you will not default on payments. Without good credit you may need a bigger downpayment or security deposit. It’s also possible you could be denied a loan completely.

What We Drive

Without cash to plunk down when you buy a car a loan will be in your future. Your credit status will determine not only if you qualify for a loan, the also the interest rate and the amount. Good credit usually gives you lower interest rates and allows you to qualify for larger loan amounts.

When buying any kind of transportation you must remember the car dealer makes their real money on the financing!

Who You Work For

Employers want to limit their risk and credit checks are now a part of the employment process. Employers want – responsible employees – and your credit is a indicator of your financial responsibility.

Employers could look at the amount of debt you have and become uncomfortable with the salary they can offer knowing you cannot be financially stable with that income level compared to debt.

Electric, Gas, Telephone and Other Utilities

Paying the electric bill that comes every month is a part of credit also. Utilitiy companies want to look at credit before turning on the services. Just like a landlord or mortgage lender they want to know they will be paid for their services.

When I moved into my new home in another city the electric company did not require a deposit, nor did the telephone company. However, the local water company did.

Starting Your Own Business

Many people including myself have dreamed of running their own business (I have for over 30 years.) Starting a business requires money. If you have not saved to use your own money, you’ll need to get a loan. Again good credit comes into play. Interest rate, terms and loan amount will all be affected by your credit.

I do remember when I was about 20 and as green as could be wanting to borrow about $5,000 to start a business. The bank gave me a firm NO. It was a smart move on their part. They would have been paid back but I clearly was not ready to take on a loan.

A few years ago I wrote the bank president telling him the story of my rejection and thanking him for personally turning down the loan. He probably thought I was crazy.

Remember – anytime you borrow money or ask for services to be extended to you, your credit will be talking for you as a representative of who you are and how responsible you will be. Make sure your credit is good and speaks well of you!