In this blog, I often talk about identity theft and its affect on credit. However, I want to point out that we do not just have to look out for illegal scammers. Many people and organizations use legal methods to try to profit by putting our credit at risk. For example, credit card companies make most of their money from customers who can’t pay their bill and rack up huge interest rates and late fees. We cannot expect these companies to not try and make a profit for themselves, so we have to take our own credit and personal finance into our own hands.
Due to my distaste for credit-based economies, I try to avoid using credit, but I assume most families could not do that. Most working-class families in the developed world depend on credit to get their house and their car. Additionally, many need credit cards for daily purchases. When I worked as a cashier at a grocery store, I can personally say that the majority of people paid for their food with credit cards. Many of those people probably did not have enough cash on hand to feed their family every day without a credit card.
However, even I need to use credit despite trying not to use it. For example, when I got car insurance, the company checked my credit to determine my rate. (I guess people with bad credit make more claims on average.) Also, even when renting an apartment, most landlords try to check my credit. I assume the landlords have even stricter credit requirements in the safer, higher-class neighborhoods in which most families would prefer to live.
As we can see, bad credit and poor finances can greatly risk our safety. Take the proper steps to keep your finances in order, and make sure to only use credit to borrow money for that which you need or can definitely pay back on time.
