If you have developed a spending plan that includes an emergency fund for dealing with unforeseen expenses, you're ready to tackle the next step to becoming a well-informed traveler on the road to housing recovery. Maintaining a solid credit history and managing credit responsibly is essential if you need to obtain a loan in order to bridge a financial gap and stay the course to recovery.
Some people don't like credit and prefer to pay cash for everything; other people abuse credit and borrow more than they can ever repay. Credit is important. A good credit rating makes it easier for you to borrow money because it shows lenders that you have handled past borrowing responsibly. A poor credit rating tells lenders that you either could not or did not repay money that you borrowed in the past, or that you did not repay it on time. This information makes it more difficult for you to convince a lender to risk lending you money.
Having good credit goes beyond making it easy for you to borrow money. Good credit allows you to rent or buy things you want or need. Many employers will check your credit before offering you a job. Loan rates are typically determined based on credit history, so people with good to excellent credit get the lowest interest rates and save money. People with past or current credit problems tend to pay higher rates and fees.
In the sections that follow, we'll discuss how to get your credit status on track so you can use credit as a powerful tool as you travel along the road to housing recovery: Exploring your credit report Understanding your credit report Identifying any efforts on your credit report Rebuilding you credit record The truth about credit repair How credit scores can affect your road to housing recovery:
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