In the modern world there is always a need for some form of credit history. Whether you are applying for a short-term loan through a responsible payday loan service, wish to apply for a store card, credit card, apply for a loan to finance a car, or acquire a mortgage to purchase your first home, you will need to demonstrate that you have a good credit score in the vast majority of cases. Your credit score is a way for lenders to determine how safe you are to lend money to as an individual. It tells them whether you have a history of making agreed repayments on credit lines and financial products on time, and have the ability to clear debt in a responsible manner.
For many people, having no credit at all can be even more damaging that having bad credit. Without any form of credit history to fall back on lenders are staring right into the abyss, with no way of knowing how a person acts with his or her finances, and whether they can afford to pay back a loan or not.
In the last 10 years, with the global economy struggling, there has been a shift in how younger people act around financial aspects of their lives, and how they view taking out credit. Many people have decided to stay away from taking out any form of credit for many years, but eventually it does catch up with everyone, and for most people there will come a time when they are required to apply for something where a credit history and good credit score will be required.
There are several reasons why you need a credit score. The biggest reason for most people is when putting together a mortgage application. This is arguably the biggest investment you will ever make as an adult, and therefore it is important for the lender to see that you have good financial habits and the ability to make continuous mortgage repayments for many years to come.
When looking for a rental property your potential landlord will conduct credit checks for similar reasons, although it is not as much of a long-term commitment as a mortgage application, and the same can be said of the process involved in car finance, and taking out car insurance. Lastly, when applying for a job, a credit reference check will be conducted by your potential employers to see what type of person is applying for a role.
Even if you have a bad credit score you can still apply successfully for short-term loans via some payday loan services. With the age of responsible payday loan lenders in the UK, you can find the assistance you need even if you have no credit history or a poor credit history. As long as you have employment currently, and a bank account, and can demonstrate that you can afford to pay back a short-term loan over the coming weeks and months.