A credit report is a measurement of your responsibility
Your credit report is reviewed when you apply for a loan or credit card. Did you know it’s also used when you rent an apartment, sign a contract for a cell phone, or even apply for a job?
Both your credit score and your credit report are used as a measurement of your responsibility and behavior. Here are just four ways a poor credit report and credit score could impact your life.
1. Interest rates
A lower credit score typically presents more risk to a lender and, in turn, gets you a higher interest rate on loans and credit cards. Every lender is different, however, so never assume you won’t qualify because of a poor credit score. It pays to talk with several different financial institutions about your options.
2. Employment
Employers can check your credit report (but not your credit score) with your permission. If an employer sees a negative history or derogatory remarks on your report, they may consider you to have a general lack of responsibility or to be an ethical risk and not hire you.
3. Housing
Potential landlords will look for late payments, delinquencies, and bankruptcies before they decide to rent to you. A poor credit history could result in the landlord choosing not to rent to you, or requiring a larger security deposit to mitigate the risk for the landlord. Worst case scenario, you may not be able to find a place to rent.
4. Utilities
Many utility companies will review your credit report before they turn on service. If they see something that causes concern that you might not make your payments, they could require an up-front deposit. In some situations, they may require a letter from a friend or family member agreeing to pay your bills in case you default.
Your personal credit history is very important to your livelihood. The good news is that you it doesn’t need to be a mystery to you. You have the ability to track both your credit report and credit score on a regular basis.
To access your credit report for free, visit annualcreditreport.com. This report does not include your credit score, however, 1st United members can view their FICO® Score on their statement, updated quarterly. Many other financial institutions offer this score as well.
Monitoring your credit history is an important part of managing your finances. Take advantage of the tools available to you and rely on them as a gauge of your financial health.
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