Why Do I Need Credit?

Why Do I Need Credit?

It is often difficult for people seeking credit for the first time to justify their decision. This happens often because there are lots of conflicting opinions concerning loans. To some, getting a credit is synonymous to living a life of debt. Hence, they often do everything within their power to stay out of debt and away from credit. Some other people hold the opinion that credit provides lots of benefits without any drawback in terms of debt if used responsibly. Credit can come handy for you when you want to finance certain projects that have to do with your life’s goals.

In the end, the decisions to apply for credit and build your credit still rest with you. The question you need to answer as an individual is: why do I need a credit? If you can find a genuine answer to this question, then making a decision concerning your credit needs will be easier.

Although it is possible to live a life without credit, not having any credit may put you at a disadvantage compared to those who have excellent credit. Let's consider a few reasons why you might need credit.

1. Credit is a Useful Tool for Achieving Life Goals

Credit is a tool that if used responsibly can benefit you in many ways. If you pay your bills on time, have some funds in savings, but don’t have enough cash to finance a home or automobile need, you can leverage on credit to achieve your goal. Credit can also come handy for you in financing your startup business.

2. Your Credit History May Impact Your Future

Many people obtain loans not because they want to live a life of debt, but they see it as a shield in the future. If you have good credit rating, it can come handy for you when seeking employment, in the calculation of your insurance rates or when seeking to rent an apartment. Your credit score will go a long way to determine your trustworthiness. The higher your credit rating, the higher your chances of getting favorable considerations when it comes to finances.

3. Credit Offers Great Protection

With credit, particularly credit cards, you enjoy higher protection against fraud, identity theft, and other serious problems compared to paying with cash. It also makes your shopping less of a hassle.

In the end, after considering the pros and cons, the final decision still rest with you. It all depends on how responsible you are with your finances. You may not necessarily need credit to live sustainably, but if you can utilize credit responsibly, it offers you a huge leverage towards achieving your life goals.