Why Do I Need Credit?

Why Do I Need Credit?

Credit is one of those things that many people find themselves in a love-hate relationship with. You need credit to earn better deals and buy certain things, but credit can also prevent you from those same things. Good credit gives you more financial options, but it is easy to fall into bad credit, which can do the opposite. Weighing the perks and costs of credit can help you decide. However, if you are struggling with bankruptcy, then consider asking a Chattanooga bankruptcy attorney for guidance.


Credit is often necessary for buying a car, moving into a new home, and transferring to certain jobs. Not everyone realizes how much a good credit score is needed for larger purchases and better financial deals. The perks of healthy credit include:

  • Lower interest rates
  • Better deals on personal and business loans
  • Greater trust between you and your bank
  • More financial freedom on major purchases like cars or housing

However, these perks only last as long as your credit remains healthy. Many people have genuine concerns that they might fall into bad credit and lose all these perks. Part of maintaining healthy credit involves:

  • Avoiding large debt and keeping your debt size small enough to manage
  • Paying off debt sooner than later
  • Never miss a payment on your debt
  • Only using credit when you need to

What destroys credit scores faster than anything else is missing payments and not paying the minimum amount each month. This communicates to your creditors that you are not trustworthy when it comes to paying back what you owe. Future creditors and loan lenders will see this history and not offer you as many perks.


This is where the real risks of building credit come from. When your finances are low and you need to make credit payments each month, missing a payment becomes a risk. You can avoid this risk by limiting the credit and debt you owe to manageable levels. Do not take on more than you can handle.

Try to forecast how much money you will have in any given month and only agree to monthly credit payments you can afford. Do not go for unrealistic amounts for your monthly payment because this will only increase that risk. Interest rates are another risk because they increase the total amount you owe the longer you take to pay back your debt.

The most dangerous costs of credit include:

  • Debt that never seems to end
  • Credit cards come with annual fees and interest rates
  • The temptation to spend more money increases with a credit card
  • Missing payments hurts your credit score


Losing credit when you have to take the bankruptcy route is not ideal, but might become your most practical option. You can call us at Tom Bible Law today by dialing (423) 690-7712 to consult with one of our lawyers about what options you have. Our experienced Tennessee bankruptcy lawyers might be able to help you escape your financial crisis. We are located throughout the Tennessee cities of Chattanooga and Tullahoma.