Every individual desire to have a positive credit history. The desire to have a good credit history is shaped by the significance attached. Most of individuals appreciate the impact of having a good credit rating and score. From a general point of view, credit may be termed as the rating and scores associated with an individual’s financial credibility. Therefore, a good credit rating is important in enhancing the presence of a wide range of benefits in relation to financial and social progress.
Good credit is essential in accommodating better rates when it comes to financial insurance. In any form of insurance or assurance, the first aspect to be considered is the credit rating. Insurance entails the payment of premiums over a duration of time ( Mullainathan & Shafir, 2013 ). The presence of a good credit score becomes important in directing the advancement of affordable premiums. Insurance firms use personal credit histories to determine their credibility. Hence, good credit is important in guaranteeing a positive file in insurance companies.
Delegate your assignment to our experts and they will do the rest.
Every person’s desire to have a happy social and financial life. There comes a point in life where challenges affect development. Such a scenario, it becomes essential to reconsider a platform where one can seek financial help. Since the financial institutions and agency have no mechanism to assess an individual’s credibility, they use credit scores to determine the credibility of an individual. The amount to borrow from a financial institution is dictated by the credit ratings. The essence of a good credit score becomes important in arriving at the sum of money a person can be awarded as credit. The presence of a good credit rating helps in increasing the amount one can be given as a loan when in need. Hence, good credit is essential in solving present financial problems.
Credit rating can be used in protecting cash. A good credit rating is necessary in helping save for worse economic times. The management of a positive credit score plays a significant role in preparing for tough times. A good credit score is presented by the presence of a string history relating to credit ( Jokivuolle, Pesola, & Viren, 2015 ). On this basis, an individual with good credit is likely to qualify for higher retirement benefits, emergency funds, and low rates on borrowed resources. Additionally, good credit guarantees the easy settlement of unexpected expenditures. On the other end, good credit is associated with a reduction of debts, increased saving schemes, controlled stress management, and boosts financial and social freedom.
The best aspect that may be used to prove the importance of good credit is that it is easy to earn. Having good credit is important in aiding in establishing the generation of credit reports, the maintenance of high financial balances, increasing credit limits, the appropriate use of credit facilities, and may be used as a strategy of determining and demonstrating the credit management schemes of an individual. Good credit is good as it helps an individual in living a positive financial life, where one is in a position to handle tough economic times.
In a nutshell, accountability and management of financial resources can be determined through the consideration of credit ratings and scores. Bad credit is an indication of the inability to manage financial resources. On the other end, good credit is important as it helps in dictating one’s credibility, survival during hard times, and saving schemes. Hence, good credit is important in calculating credit scores and generate a report.
References
Jokivuolle, E., Pesola, J., & Viren, M. (2015). Why is credit-to-GDP a good measure for setting countercyclical capital buffers?. Journal of Financial Stability , 18 , 117-126.
Mullainathan, S., & Shafir, E. (2013). Scarcity: Why having too little means so much . Macmillan.
