Why is a person's credit history so important?

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A good credit history allows a person to take a mortgage on a house, rent an apartment, get charge cards, and get a loan for a car or education. A person with a poor credit history either can't get these loans or is stuck paying a very high interest rate. For more information, check this site.

http://www.frbsf.org/publications/consumer/creditreport.html

Ability and determination to pay bills is very important to those who lend money, or sell things on credit. Some folks do not have to the ability to pay for all that they want to buy, and some just don't intend to. So for a business that sells things on credit, or a business that loans money, it is vital to screen out those who cant pay, or don't intend to.

What we find in the credit history is the character of the person: do they pay their bills on time.

... and their ability (or inability) to manage their own money can often indicate how they might do with other people's money if they are running for any office, for example -- whether it's for a school board position, a city position, county, state, or national position.

It's part of one's character in a very clearly demonstrated way.

A person's credit history is important for several reasons. It is a record of their financial behavior and how they have managed credit and debt in the past. Lenders, landlords, insurers, and even employers may review a person's credit history to evaluate their financial responsibility and trustworthiness. Here's why credit history is so important:

1. Loan approvals: When applying for a loan, such as a mortgage or car loan, lenders will review your credit history to determine your creditworthiness. A good credit history with a solid payment track record increases your chances of getting approved for a loan and getting more favorable terms, such as lower interest rates.

2. Interest rates: Your credit history can affect the interest rates you are offered. A good credit history may qualify you for lower interest rates, which can save you money over the life of a loan.

3. Rental applications: Landlords often review credit history as part of their tenant screening process. A positive credit history demonstrates financial responsibility and reduces the perceived risk of a tenant defaulting on rent payments.

4. Insurance premiums: Some insurance companies consider credit history when setting insurance premiums, as they view it as an indicator of risk. A lower credit score could lead to higher premiums for auto, home, or even health insurance.

5. Employment opportunities: Certain employers may review credit history as part of their background checks, particularly for positions that involve handling finances or sensitive information. They may view a poor credit history as a potential red flag for irresponsible behavior.

To build and maintain a good credit history, it is crucial to make payments on time, keep credit card balances low, minimize credit applications, and regularly review credit reports for errors or discrepancies. Responsible financial management and consistent positive credit behavior can help establish a solid credit history over time.