Information on the Importance of Good Credit

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Your credit score is one of the most important measures of your financial health. By maintaining a good credit record and engaging in fiscally responsible behaviors, you can reap many benefits that are often not available to individuals who fail to manage their credit and finances.

Unfortunately, not everyone understands the significance of their credit history or how to maintain good credit. Negligence in this area can lead to problems, whether they arise from poor spending habits, accidents or becoming victims of credit fraud that go undetected. That is why it is important to maintain awareness of your credit and practice “credit hygiene” at least once a year, just as most Americans have to deal with their income taxes annually.

Why is Good Credit Important?

Good credit can help you to achieve many major financial goals. The most obvious benefit for many consumers is that good credit can make it easier for you to get a loan. This simple fact is invaluable when it comes time for major life purchases such as a car, house or major investments.

Your credit also affects your dealings with all kinds of financial institutions, including determining your financing terms and even expanding the amount of consumer credit you have access to. This advantage can help with a variety of significant financing needs, from meeting emergency expenses to getting startup capital to start a business.

Certain jobs, particularly some in the financial and public sectors, might also require good credit. Finally, many apartment buildings and property managers conduct a credit score check prior to allowing tenancy.

How to Maintain Credit

Maintaining your credit is a matter of doing several things consistently.

One of the most important parts of maintaining your credit is to pay your bills on time. As long as you pay at least the minimum amount, your credit score will benefit from each positive entry that indicates on-time payment.

However, you should not stop there. Also remember to check your credit report from the three major credit reporting bureaus at least once every year. Checking out these reports will give you the chance to intervene and protect your credit even if you fall prey to identity theft or other unauthorized use of your credit.


Good credit helps you in many ways. Although it is very easy to slip into bad credit, you can repair your credit score with diligence and perseverance. While one event can ruin credit, it takes a steady stream of conscientious credit decisions to bounce back from such a mistake. Luckily, there are many good ways you can contribute to your credit health week by week. With time, as balances are paid down, even serious credit problems can be resolved – yes, even bankruptcy!

Review the resources below to find out more about how you can take control of your credit.

Improve Bad Credit

  • Powerful Tips to Legally Improve Your Credit Score (PDF): Information from the Maryland Small Business Development Network on improving credit, including background information on the importance of credit and how to maintain it.
  • Improve Your Credit Score! (PDF): Detailed, illustrated information from Wright State University that includes a breakdown of the factors that impact credit and how to use them to improve credit that has deteriorated over time.
  • When Good Credit Marries Bad Credit: Information on repairing credit and handling credit challenges that can come up when someone with good credit starts to take on joint financial instruments with someone who has poor credit.
  • Fixing Bad Credit: Making Every Dollar Count (PDF): Numerous practical strategies and ways to take action to repair bad credit. From the University of California Cooperative Extension, part of the prestigious UC university system.
  • Uncovering Credit Repair and Reporting Scams: Important information about defending yourself from credit repair scams that target people with low credit scores. Credit repair “services” can actually do harm to people who are working on repairing their credit!
  • What Does a Credit Score Affect?: What is the impact of a credit score on your life and lifestyle? A quick explanation of the various types of purchases and financial options that may be more difficult with bad credit, and suggestions on repairing your credit.
  • Credit Scores and Small Business: Concerns the importance of having a strong credit score before you go into business for yourself, and different approaches to gathering information about your credit and starting the bad credit recovery process.

Maintain Good Credit

  • Basics of Credit from Successful Start: A free financial literacy article from Boston College discussing the basic concepts surrounding credit, the benefits of having good credit, and how to maintain good credit after establishing a credit history.
  • Your Credit History and How to Use It (PDF): Information on obtaining and using your credit score report in order to maintain positive credit. From Utah State University Cooperative Extension, part of its Home Ownership Fact Sheet series.
  • Credit Reporting and Your Rights: More detailed information on credit reporting, the various credit reporting agencies, and advanced techniques that focus on the best ways to approach your credit hygiene in different credit situations.
  • Understanding Your Credit Score (PDF): Detailed information on what the “average” credit history looks like and how to maintain your positive credit score by ensuring you don’t exceed certain averages set by the credit consumer community.
  • Credit Reporting and Consumer Credit Scoring: Not every method for protecting your credit is equally valid. Find out about the most valid methods of defending your good credit, as well as information on identity theft and other major credit problems.
  • A free, official website that facilitates consumer requests for credit reports from the three major credit reporting agencies: Experian, Equifax, and TransUnion. In most jurisdictions, consumers are entitled to one free score report per agency per calendar year.
  • Credit and Your Consumer Rights: What are your rights when it comes to maintaining your credit? Knowing them can help you safeguard your score. Information from the Federal Trade Commission to help you.


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