Question

share "why establishing good credit is critical" and provide scenarios in which not having good credit could create barriers for you to move forward.

Answer 1

Establishment of good credit is critical because good credit will be important for an individual in able to maintain a better credit worthiness and it will also help the individual in order to obtain loan at flexible terms and condition and it will also help the individual to get access to various credit facility at his desired terms and conditions and he will have options to choose from various creditors also, Hence, good credit is critical because it will help the individual to to maintain a better ability of repayment of debt capital and it will also be advantageous for lenders as they will be having lower risk related to default on loans.

Absence of good credit can be resulting into problematic situations for various individuals because they will not be having an access to various kinds of personal assets on loan as there is always a requirement of good credit in getting up loan on housing or getting a student loan or it is also important for getting loan related to various other aspects of the life and it will also mean that these borrowers will be making the lenders books of accounts bad as they are defaulting on their long then there will be a risk of growing financial incompetence and risk related to contagion in the financial system due to bad quality of assets.