Why Good Credit Matters

Today, credit is a necessary tool for people to be able buy goods and services.  More and more businesses are realizing that your credit history should be used to make decisions about extending goods or services to you not only for credit card and mortgages decisions.

Since your credit history is defined by how you have paid (or not paid) your bills in the past, many businesses – landlords, mortgage lenders, utility providers, and even employers – use your credit to predict your future financial responsibility.


Your credit is important when it comes to where you live.  Mortgage lenders want to know that you won’t default on your mortgage. If you don’t have good credit, the lender will consider it risky to give you a mortgage loan. This could result in a higher cost of borrowing or worse, a denial of the loan.

If you are renting, your credit is used for rental decisions, too. Landlords want to know that you are a trustworthy person who will pay the lease as agreed and maintain their property to preserve the value.  If you have bad credit, you can get denied an apartment because the landlord may consider you a risk for non-payment(s) or damage to their property.


If you are like most people, you will have to get a loan to buy a car.  If you have good credit, lenders will offer you more credit and more competitive rates.  If not, then you will likely pay a little more and get a lower credit line.

In addition, insurers are more and more correlating your credit report to your insurance risk.  Again, the better your credit the better rate an insurer might offer you, however, the worse your credit is the more you may have to pay or may even get denied.


Employers are cautious when screening prospective employees because most companies realize that each and every employee is crucial to the success of the company.  Because of this employers conduct credit checks as a part of the hiring process because they consider that if you have not personally demonstrated financial responsibility you may be considered risky.


Many people have dreams of starting their own business. Most business startups require a sizable amount of cash that you might not have available. In that case, you’ll need to obtain a small business loan. Among other things, you need to have good credit to qualify for the business loan.

Utility Services

It might be somewhat shocking to learn that your credit will be needed to establish utility service. Your electricity company considers that you are borrowing one month of electric service. So, before turning on your electricity, the company will check your credit. This applies to most utility services including cable, telephone, water, and even cell phone.  Having good credit may include the benefit of not having to post a deposit with the utility company because they recognize that you are a trustworthy person and may decide to waive the deposit based on your good credit history.

So as you can see, anytime you need to borrow money, or even services, your credit is called into question. This is why maintaining good credit is so important.

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