Let’s face it: Most of us treat checking our credit the same way we treat making an appointment to get our teeth cleaned – a task better left for another day.
But if you’re a young woman, there are a lot of good reasons to drop what you’re doing and start taking control of your credit right now. Can’t think of one? We’ve got five, so check out the details below.
1. A bad credit report could limit your job prospects.
Applying for a loan isn’t the only time someone will look at your credit report. Data from 2012 shows that roughly 47 percent of employers conduct credit background checks on prospective employees. This means that negative information on your report – such as late payments or an account in collections – could make it tough for you to get a new job or a promotion. Consequently, your future earning potential could be in jeopardy.
To avoid a career derailment caused by bad credit, be sure that you’re paying your bills on time and in full every month. Also, check your credit report at least once per year for accuracy.
2. Poor credit makes almost every big purchase more expensive.
It might not be fair, but the truth is that women pay more than men for a wide range of products and services. Unfortunately, you’ll only compound the problem by not taking steps to keep your credit score in good shape.
This is because your credit is a major factor that lenders look at when they’re deciding how much to charge you in interest on a loan. A low score will mean higher rates, making the overall cost of borrowing money more expensive.
To maintain a good credit score, pay your bills on time and stay out of credit card debt – doing otherwise could cost you.
3. Investing in property is tough with a sub-par score.
When it comes to investing in property, single women are wiping the floor with single men. According to a 2013 article in the New York Times, unmarried women are purchasing homes at roughly twice the rate of their male counterparts.
But if you have dreams of buying a house someday, they could end up getting dashed by a bad credit score. Post-recession, banks have tightened their lending standards and will only extend the most favorable mortgage terms to those with very good credit. If you’re not one of them, you could end up stuck in a rental for a long time.
4. Getting financing for your small business requires solid credit.
Starting a small business is a goal shared by many young women, but make no mistake–it’s tough. Getting your venture off the ground is the hardest part, especially when it comes to financing. If you need to borrow money for equipment, supplies, or renovating a storefront, having good personal credit is key.
Here’s why: When you’re just getting started, your business credit score probably doesn’t exist yet, so you’ll likely need to use your personal credit score to apply for a loan. If it’s shoddy, your business plans could get stalled. Again, this is a good reason to start building good credit as soon as you can.
5. Good credit helps you maintain your independence.
Being happily coupled up provides a lot of emotional and financial security. But it’s also healthy to maintain a level of independence, and tending to your credit is one way to achieve this. After all, it’s comforting to know that even if your partner isn’t there to lean on one day, you function on your own, financially speaking.
Keeping a few credit accounts (like your credit cards) in your own name and using them responsibly is a good way to ensure that no matter what life has in store, you’ll be prepared to handle it.