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These days, credit is basically the one thing that defines you in society. Your credit score says so much about you, but you probably aren't aware of it. I'm sure you know that your credit score is used to determine a variety of things, and when you go to buy a large ticket item, you are using credit to purchase it.

In a way, your credit score says something about you as a person as well. If you have a good credit score, it basically says that you are an honest person, that if you say you will pay back a loan, that you will pay that loan back. Now, I realize that these days, there are so many hardships that can arise that may affect ability to pay back, but I think in general this is an accurate statement.

Going a step farther, make sure that you are paying back your loans, because not paying off your loans can land you in hot water. Bankruptcy will stay on your credit report for seven years, meaning that if you declare bankruptcy when your 21 and just out of college, you most likely wouldn't be able to buy a house until at least age 28. Not only that, but you will have a harder time even getting an apartment, as even a rental requires a credit check.

If you have bad credit, get used to either paying in cash, or paying high interest rates for most goods. Car loans will probably be an interest rate of nine to ten percent, and credit card rates could be even higher, maybe even double that. Even getting things like TV's, appliances, beds, the things we take for granted, will be harder to get if you have bad credit.

Even employers will obtain credit reports from time to time to see if new hires are worth the risk. Think about that, if you don't pay your bills, you may not be able to land a job to pay them. It makes sense too, if you don't bother to pay your bills, or if you have other commitments that you weren't able to meet, what does that say about you as an employee.

Also, keep in mind that there are some bills that cannot be wiped away in bankruptcy, and in most cases, even if you do declare for bankruptcy, you will have to pay some of the bills back. Student loans cannot be wiped away, so if you are struggling with your student loans and think that bankruptcy will help, it will not. All that will do is make your credit lousy and make it harder to make ends meet later when you can't even get a credit card.

Some good ways to establish your credit again if it is bad, is to keep a small balance on a credit card if you do get one. A cell phone is a good way to build credit too, as this is another small balance that can be easily paid on time. After about a year or two, your credit rating should be better if you can make enough consecutive on time payments.

Learn more about this author, Cody Hodge.
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