Is credit all that important in today’s housing market?, by Edwin Engelke.

Is credit all that important in today’s housing market?

By Edwin Engelke

Most companies have realized the importance of credit integration in people’s lives and have started to extend credit services to most areas. This means that it is almost possible to do anything with no cash at all in today’s world.

WHAT IS CREDIT?

Credit is your financial power in today’s world. In short, good credit determines whether you will qualify for a loan, a mortgage, or a student loan. On the other hand, bad credit may inhibit you from achieving many things, including getting a credit card with a low-interest rate and thus, making it more difficult for you to get any money for any purpose.

Most financial experts advise on the importance of making sure that your credit reflects positively, and according to Liz Pulliam Weston, even if you are not in the market for a loan, good credit can have a major impact. One major impact of the credit is that, in most cases, employers, mortgage lenders, and credit card companies will use your credit information to determine how reliable and trustworthy you are. Therefore, a credit score doesn’t only apply to loans, it is a part of your financial life.

CREDIT CARD VS. CASH PAYMENTS

One thing that makes the cards more adaptable is the convenience factor. The ease with which the credit cards have been made considering their usage has made them more popular than cash payments.

“Your credit information can be a factor in whether or not you can rent a “ nice apartment, how much you pay for insurance or whether or not you can get a job.”-Liz Pulliam Weston, author of

Your Credit Score.

It is safer to use credit cards than cash. Security is now a factor that spenders have taken so seriously. The cards are very secure if you look at the security when using a credit card compared to using cash payments.

With a credit card, there is increased spending. Statistics indicate that the average cash purchase comes at about $17, which is a big difference from the exponential credit cards. Credit cards stretch the average spending of a person to $66 per purchase, which is 21/2 more money for cash carriers. This has enabled most people to access many services such as making food purchases and other simple tasks.

There is a high degree of flexibility for shoppers with a credit card, allowing them to make more frequent purchases. With a credit card, shoppers can go out and buy items as soon as they need them. Cash may run out but never with the credit facility.

WHY CREDIT IS IMPORTANT

Good credit is a superpower in terms of your finances. Many aspects of our lives are affected by credit card ratings, even if we are not using cash as payment. Conversely, cash payment doesn’t determine how well we qualify for loans; credit determines that. Therefore, having a good credit mix is very important.

Credit rating may determine whether a lender approves a new loan or not. If your credit mix is in question or is in doubt, then qualifying for a loan, which may be a home loan, a student’s loan, or even the credit card companies themselves, may be difficult. Therefore, you need to be concerned with your credit even if you use cash as the only payment method. When it comes to interest rates, the credit rating may affect that adversely or positively. Bad credit rates would influence high-interest rates on the available loans, such as the student loan. Other fees may also be affected if you have a negative credit rating.

In the job industry, your credit rating may also affect your review by employers. Having a bad credit rating may do you considerable damage. You should understand that credit determines your reliability in the employer’s eyes, and if it reflects negatively, it may be hard for you to get a job.

In the home industry, credit rating is also very crucial. Landlords will check this in determining whether to assign you a house to rent or not. Thus, most of your transactions are cash paid doesn’t mean that your credit eligibility is stellar. You have to make sure it is in balance constantly.

GOOD AND BAD CREDIT

Having good credit means that your bills are fully accounted for at the right time. You are making regular payments on each of your accounts until the balance is fully paid; you are improving your credit rating. On the other hand, bad credit means that you are having a very hard time trying to pay your bills. In this case, you may not have paid the amount due or couldn’t be able to pay in time.

To improve bad credit to good, you have to start paying your bills regularly. Alternatively, you can make sure that the balances reflected on your credit cards are low and monitor your credit reports to ensure no mistakes are done.

THE BOTTOM LINE Cash payments are important for minimal daily transactions that may be inevitable, but what if you do not have the needed cash? Credit now comes into play. The credit applies when you do not have the cash to make the payments, and therefore most of the time, it is your saving grace most of the time. But even so, this doesn’t mean you drain and overspend on your credit; this may as well do you significant damage. Therefore, you have to learn how to ensure that your credit is good.