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What is Credit and Do You Really Need It?
by John M. Roberts

You don't have to have credit, but it is hard to live without it.

Credit is the arrangement for the purchase and ownership of something of value or the use of goods and services for which payment is deferred to a later date, which also includes the borrowing of money and the use of money through the ownership of credit cards and lines of credit.

As far as credit is concerned, your reputation as a borrower is directly linked to your credit history which is determined by information given to and disseminated by credit reporting agencies or bureaus. This is done by use of a credit report that keeps tabs on your credit history based on your name, address, and social security number.

No one has to have credit but it is almost impossible to go through life without ever having credit in one form or another. Unless you can pay cash for everything you purchase, credit is a real necessity of life. Most people who work for a living, and buy things to make their lives more comfortable and enjoyable, have credit and in most cases, debt.

The way you treat your credit is very important and what you allow to happen to it can have an impact on you, your loved ones, your property, and everything associated with your life right up to the day you die and sometimes well after you die. Treating your credit with respect is a smart way to help keep your financial affairs in order.

Good credit is a great thing to have. A good credit score may mean getting lower interest rates on the things you need to buy. What it does for you is make it less expensive to purchase big ticket items such as homes and other real estate, cars, trucks, farm equipment, livestock, furniture, boats, and if you fly, airplanes.

On the other hand, if you have a bad credit score, you may be denied credit or you may have to pay higher prices along with higher interest rates on your purchases. You may be denied credit cards, car or truck loans, and it may be very difficult to buy a home. In many cases, with bad credit, a larger down payment is required on items of purchase.

To keep your credit in good shape, you need to make sure that your bills are paid on the agreed upon time. Once something is reported to the major credit bureaus, whether good or bad, it stays there for up to 10 years. If something is erroneously reported, it is very hard to get removed and it may take years to clear up.

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