When you’re young, credit seems like this mystical concept, something that only adults who make bad decisions have to worry about. But the truth is that it’s very easy to find yourself in a bad situation that can easily destroy your credit rating. So before you brush off that credit score as something you can worry about later, think of the few things you’ll definitely need good credit to do.

  • Get Money During Emergencies – Credit is one of those things that you don’t need until it’s too late. When you find yourself laid off from a stable job, that’s when you need an emergency stash of money to pay for all those things you were easily paying for before. That’s also exactly the time when no credit card company is going to want to touch you because you have no proof that you’ll pay them back – unless you have a stable credit history that shows you’re good for it. There are emergency payday loan providers like wonga.com that can help you out of a bind if you find yourself creditless, though short-term loans should only be used in emergencies. But because they make it easy to apply online and choose a repayment time frame that fits your schedule, it’s always a great option to have on the table.
  • Find a Job with No Complications – Some people have found that having no credit or bad credit can actually hurt their chances of landing a job. More and more companies are starting to run credit checks on their employees before offering them positions because your credit score or history of repayment can speak volumes about how responsible you are. Unfortunately, this can lead to snowball effect where applicants aren’t able to pay off items on their credit report because they don’t make enough money and don’t make enough money because they can’t find work. The best way to avoid this problem is to simply never let yourself get so far behind that it becomes an issue. Stay on track of your finances, build credit in a responsible way and you’ll find yourself in a much better place.
  • Make Big Purchases You Can’t Afford Outright – Unless you’re one of a very few lucky people out there, you’re probably never going to have the money to buy a house outright. The average person doesn’t make enough money to do this, even with years of saving, which is why loans exist to help you out. The same can be said for schooling and automobiles. And you need that credit to prove to the banks lending you money that you’re able to pay them back in a responsible manner. You’re also looking at higher interest rates if you have bad credit or no credit because the bank is taking more of a risk on you. Don’t let your bad credit or lack of credit stop you from being able to buy the things you want in life.

Still don’t understand why credit is such a big deal? Take a look at a few more ways having bad credit can have an impact on your life. You’ll be grateful to yourself when the day comes that you need to buy a car or home and can do so without complications at all.

Hannah Williams is a London based freelance writer, covering the realm of financial news and personal finance. She aspires one day to break into mainstream financial journalism.