When an individual tries to get a loan for a house or an automobile they are usually aware of how important their credit report and credit score can be. A lender can charge a higher rate or even deny credit altogether based upon what is showing on the credit report and the credit score.
However there are also a few other things that most people are not even aware of concerning credit reports and credit scores. Negative credit can affect you in a few surprising ways.
If you have any credit cards you need to be concerned about keeping a good credit score and having a good credit report. Credit card companies will use any excuse that they can find to raise your rates. After you become a cardholder they can monitor your credit and if they see that you have late payments showing, even if you have never been late on a payment owed to them, they can raise your interest rates. Your introductory rate could double or even triple.
Any problem showing on your credit report is a sufficient reason for them to raise your rates. Many times erroneous and inaccurate information can show on your report and your rates will be unfairly jacked up. It is smart to repair any problems that you see on your report as soon as possible for this reason.
Credit scores and reports can also affect your job search. Potential employers can request to see a copy of your credit report as part of a background check. It is legal for them not to hire you if you have bad credit. However, be aware that they must have special permission granted from you to inquire into your credit.
If you have good credit it may mean the difference between getting hired or not if you are one of a few equally qualified prospects. If you have bad credit they may not even consider you. In these changing economic times it is important to maintain any advantage you may have in the job market.
A third surprising benefit for having a good credit report is that insurance companies can turn you down for coverage if you have bad credit. According to their in-house research they have determined that drivers with bad credit actually submit 40% of all claims. If you have bad credit you are deemed a higher risk to the insurance companies. The statistics may be as high as 90% of automobile insurance companies use credit reports as an underwriting tool.
While many of these things seem unfair and unreasonable the fact is that our credit affects more than we realize. Do what you can to maintain good credit if you have it and if you don?t take the steps necessary to improve or repair your credit.