Some people wonder if they really need to hold good credit. Many financial experts will tell you that credit does not matter if you plan to get out of debt because you will not borrow money going forward. What does your credit mean?
While I agree that once debt-free, you may not need to borrow money immediately, I disagree with the notion that you should not at least try to keep proper credit for emergencies when you May need to borrow money in full.
More than that, many times more than just “borrowed” money requires good credit. Here are five reasons why you need to have a good debt, even if you are debt-free. But first I want to inform you that if you want to check the BIN code of your credit card then you can check it from the BIN code checker.
The Top 5 Reasons to Keep a Good Credit Card Are:
- Buying a house
- Financing a car
- Getting a Job
- Starting a Business
1. Buying a house
Someday, especially if you are young, you will want to buy a place of your own and this will require credit and your credit score. Most lenders require a minimum credit score of 680 to qualify for a fixed rate mortgage rate.
You always want to shoot for a fixed rate because it limits your monthly payment to a certain amount, so there are no surprises down the road.
2. Financing a car
Similar to buying a home, you will need a good credit score to finance the purchase of your next vehicle. If your credit score is high then most banks and even car dealers will give you a better rate. And obviously, we all want the lowest rate when borrowing money.
My suggestion for financing any type of highly valueless asset is to borrow up to 60% -70% on the loan value of the car, just like a car. This provides you with an equity safety net that will help you jump on paying off the loan before dropping the value of the car too much.
3. Getting a Job
Like it or not, many employers have started running credit checks on their candidates. In fact, when you apply for a job, 47% of employers accept running your credit.
After all, if you are being hired for someone, they want to know how responsible you are for your money. This is a good indicator for your employer about habits: can you manage your responsibilities, is your time there, and are you an integrity-laden person?
4. Starting a Business
Every year, thousands of Americans decide to start their own business. Getting and running a business is not always easy and usually to get some significant money is to stay away.
Depending on the type of business you start, you may need to help your local community bank to make your dreams come true and succeed. Even if you plan to borrow money in the name of your business, most banks require a credit card checker and evaluation of the partners of the business. Because ultimately, you will be the one to decide.
Dave Ramsey always says that many times in life, “Murphy shows up at your door and wants to stay awhile.” He is referring to Murphy’s concept of law. The infamous statement that “if something can go wrong, it will be wrong.”
We all find ourselves in this situation at some point in our lives when things start to get worse. Your car breaks down for two weeks from pay, your furnace runs out in the middle of winter, or most horribly, you lose your job. now what?
Our philosophy for all our readers is that we encourage them to live as debt-free lives as possible, but sometimes you have to borrow some money to work.