Many people dont even think about their credit scores until theyre ready to apply for new credit and some dont consider them even then! But credit scores can play a big role in your life, even if youre not planning to buy a car or house or rarely use your credit cards. Its important to understand who has access to your credit score, whos looking at it and how theyre using it to make decisions about you.
- Lenders rely on a credit score and report for their lending decisions. Your past credit behavior is generally considered to be the best predictor of how likely you are to repay new credit. A good score indicates you’ve managed your credit usage well in the past, and you may be more likely to be approved for credit. So lenders from auto loan and mortgage companies, to credit card issuers and student loan agencies, will usually consider your credit score when you ask them for credit.
- Employers are reviewing credit scores. Some employers might check the information included in the credit reports of candidates before offering them a job. For example, a potential employer may ask for permission to review your credit report as one part of the application process. Generally, however, this is only one of many factors that may be considered in deciding to extend you a job offer.
- Landlords consider credit. They want to ensure youll pay your rent on time, and past behavior is considered a good indicator of well you will meet the financial obligation of paying rent on the due date and in full.
- Mobile service providers and utility companies check credit. While a good score doesnt mean youll get a better deal from these companies, a poor one might mean your application wont be approved without a co-signer or you may need to pay a deposit.
Your credit scores can influence many aspects of your life beyond your ability to secure credit at favorable rates. Understanding how it affects your life and what credit factors can impact your score can inform you how to manage your finances in general.
This article is provided for general guidance and information. It is not intended as, nor should it be construed to be, legal, financial or other professional advice. Please consult with your attorney or financial advisor to discuss any legal or financial issues involved with credit decisions.
Published by permission from ConsumerInfo.com, Inc., an Experian company. © 2014 ConsumerInfo.com, Inc. All rights reserved.