Many people take the importance of their credit rating like a grain of salt. They don't understand what that rating says about them as a person.
Everyone wants their friends to like and trust them. So they pay extra special attention to their actions with their friends. They don't gossip about their friends. They look out for their friends and help them whenever they need something. They hang out with them and they care what their friends think about them. If they borrow something from their friends they take good care of it and return it in good shape.
If a trusted friend loans them money they make sure to pay it back by the date they said they would. Friends don't usually charge friends interest but they do expect that person to return the money as they promised they would. When they don't then the friendship usually falls apart.
The way one treats their friends speaks to one's character. Friends don't like to hang around or be associated with someone who is not reliable and trustworthy.
Employers and Your Credit
The same is true for people that chose to hire you to work for them. They don't want someone who is not going to be reliable and trustworthy. One of the ways that they use to decide if you are a person with the type character that displays these traits is to look at your credit report and scores.
If you don't pay your debts or pay them on time, then you are not the type person that most employers will want to hire. Because, this shows that you are not dependable. If you do not think enough of your own reputation to repay money that you have borrowed on good faith then you certainly won't care anything about the company's assets where you would be working.
In addition, new creditors will want to know what kind of person you are. They will also check your credit report and scores to determine if you are someone that has the type of character they would want to lend money too.
If you have not repaid debt in a timely manner in the past then why would they want to do business with you. Other lenders have trusted you in the past and you let them down. Credit is not a gift; it is a loan. The same as if your friend loaned you money. If you don't care enough about your own character to keep your word and repay what has been loaned to you, then why would a new creditor want to loan you more money.
Some companies like credit card companies and cell phone service providers will give you a second chance and allow you some credit but only if you pay the price for it in higher interest rates and deposits. These companies realize you are a person of poor character and are undependable if you have a poor credit rating but they aren't taking as big of a risk by giving you a low credit limit as say a mortgage company or car dealership.
Many people feel like they can just let their car go back to the car dealership when they can't pay and all is forgiven. Not true. Even when you surrender you car it is still considered a repossession. This goes on your credit report. If you purchase a car and don't make the payments that you agreed to pay then this speaks negatively to your character.
People who don't make their house payments and allow the mortgage lender to foreclose on their home depicts a person that others don't want to do business with in the future.
The roof over your head should be the most important thing on your budget. If you don't manage your money in such a manner as to keep a roof over your head then this speaks to your character.
Failing To Pay Your Rent
Many renters think that they can let their rent get behind and then move out without paying what they owe and then they can just go rent somewhere else. Or, even worse they sit there until they are actually evicted and then go and rent from another landlord.
Many tenants will file a judgment against these type tenants and if not paid will eventually have their wages garnisheed to collect the money owed them. These judgments are filed on one's credit report and bring down ones credit scores. Future landlords will avoid these people like the plague.
Don't Be A Person of Poor Character
Even if you have shown yourself to be a person of poor character in the past you don't have to be that way the rest of your life. Start paying your debt on time that others have entrusted to you.
Don't take out more debt than you can manage to repay. You may need to wait to purchase some things or settle for an item that cost less like a little bit older model car than the one you really want.
Take control of your situation and turn it around. Get a copy of your credit report and scores and see where you stand. You may find that there are errors or mistakes on your credit report that can be resolved and thereby improve your credit rating. You can pay off or pay down outstanding debt to help your situation.