Why do I need credit?

People usually use their good credit to: • Buy large items, such as a car or appliance • Finance an education • Buy a house • Purchase items online

Credit allows you to buy something now that you promise to pay for later, and by a certain date.

It is usually best to pay for routine purchases and bills with cash, either from your income or savings. But sometimes purchasing something with credit is the better way to go.

Having credit is important for several other reasons. Employers, landlords, utilities, and insurance companies look at your credit as well. You may need credit to: • Get a job • Get an apartment • Get utilities turned on (and possibly avoid paying a utility deposit) • Buy insurance (auto, health, home)

It makes sense to use credit to buy items that you will have for a long time, or items that will increase in value. People usually hang on to cars and appliances for a long time, homes usually increase in value, and an education usually increases the value of your skills. So it makes sense to use credit to buy those items. And if you want to buy items over the Internet, you have to have credit or at least a debit card.
Employers

Employers are beginning to view job applicants’ credit reports as a screening tool. Some of the reasons employers do this are:
•	To confirm a person’s identity.
•	To help determine a person’s future job performance. If a person is responsible with money, an employer may think he or she will be responsible and reliable while on the job.
•	To determine if a person’s debt payments would require too much take-home pay and cause financial hardship.
•	To take precaution when jobs require employees to use cash or confidential information.

Landlords and Utility Companies
Landlords and utillity companies need to know if you will pay your bills on time. So they look at your credit information to find out how you pay your bills.

Credit tip: Employers and insurance companies may view your credit only with your written permission.

Insurance Companies
Insurance companies may view your credit to help predict if you will file a claim. Sound odd? Insurance companies find that people who can manage their money tend to get in fewer accidents and take better care of their health and home. Insurance companies view your credit information to decide if they will insure you and if you will be able to pay your monthly premium.