Having good credit will ensure that the entire universe of loan products is available to you. With the best credit history (and therefore credit scores) you have more options. Lenders can make the best offers in the marketplace available to you. With bad credit, you will be somewhat restricted. Granted, you can almost always get a loan, even with very poor credit. However, you may not have all of the options available to you, so you may not be able to enjoy all of the flexibility that some products offer. Likewise, you may be restricted to a smaller universe of lenders. Typically, lenders who specialize in “bad credit” loans should not be your first, much less only, choice.

Having good credit, and therefore getting the best loans and products, is about more than just avoiding mistakes. Beyond a doubt, you will damage your credit if you make late payments or default on your debts. However, lenders won't necessarily look favorably on you just because you have a spotless record. They also want to see that you have a healthy and robust credit history. For some lending products, the lender has a minimum number of open and active credit accounts that they want to see in your credit history. If you don't meet the minimum requirement, you may have to work with a different, and possibly less competitive, lender.