The Importance of a Good Credit Rating

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As a society, we are becoming increasingly dependent on credit, so it is more important than ever to manage and maintain a good credit score. The following are examples of how credit can impact our everyday lives.


As part of their decision-making process, banks and other lenders will access our credit report and use our credit score to determine whether we are an acceptable risk.

Interest Rates 

Generally, with a higher credit score, you are in a better position to negotiate lower interest rates. A poor credit score limits your ability to negotiate and could cost you thousands in interest. For example, on a $180,000 mortgage, if your interest rate were only 0.5% higher, it would cost you an additional $14,449 of interest over 25 years.


More employers now include credit checks as part of their hiring policies. While it may not be the sole factor in determining whether or not you get the job, certain types of employment require a clean credit history.


Some insurers have begun using a credit score to determine whether or not to provide you with insurance services and what premiums to charge you.


Larger property management companies now own most apartment buildings. They will use your credit score to determine whether you are an acceptable risk.


If you have poor credit or unpaid utility bills from your past, the utility company may decline to provide you with services or may require a large deposit.


We do not suggest that people check the credit report of prospective partners, but past credit decisions could impact the relationship. A young couple’s dream of buying their first home can be shot down or delayed if one of them has a poor credit history.

Small Business 

Many people have dreams of starting their own business and working for themselves. However, starting a business may require you to invest your cash. If you don’t have all of the necessary funds, you will need to obtain a small business loan. You may not be able to qualify for the financing to start your business with a poor credit score.

Since your credit score reflects how you have or have not paid your bills in the past, many businesses – landlords, mortgage lenders, utility providers, and even employers – use your credit to predict your future financial responsibility. Anytime you need to borrow money or even use services, your credit is may be called into question. That is why maintaining a good credit score is so important.

Powell Associates Ltd. is a Licensed Insolvency Trustee. We are experienced, hands-on insolvency practitioners who understand the personal impacts of major financial stress;

Once you file a consumer proposal or personal bankruptcy, we deal directly with your creditors on your behalf. Your unsecured creditors are required to stop contacting you or continuing legal proceedings against you. Contact us for a free consultation.

We offer free consultations to review your financial situation and practical debt resolution options. Contact us to discuss your situation over the phone, a video chat, or in-person in Saint JohnMonctonFrederictonCharlottetownDartmouth, or Miramichi.