Most folks realize how crucial it is to have a clean credit report and a high credit score when they try to get a loan for a house or an automobile. Lenders take the credit information very seriously and they can charge a higher interest rate or even deny credit altogether based on the information from the credit report and credit score.
But there are also a few things that most people are not even aware of concerning credit scores and credit reports.
Negative credit can have an effect on many things that you may not even be aware of.
Your credit score can affect your interest rate.
If you are a credit cardholder you need to make sure that you keep a good credit score and a clean credit report. Credit card companies are notorious for finding any reason that they can to raise your interest rates.
If you are a cardholder they can monitor your report and if you show any negative credit they can raise your rates, even if you have never been late on a payment to them! The teaser introductory rate could double or even triple if your credit report is bad.
Any blemish that shows on your report is an adequate reason for a credit card company to raise your rates. If the information is incorrect or erroneous it is irrelevant to them and they will still unfairly raise your rates. For this reason it is wise to take advantage of credit repair strategies to delete erroneous and inaccurate credit.
Your credit score and job hunting. Yep, they are related!
Your credit score and your credit report can also affect a job search. A potential employer can do a credit inquiry as part of a background check with your permission. It is legal for them not to hire you based on your credit. They must have special permission to access your credit history however.
If you are one of a few equally qualified prospects it is possible that your credit rating could become a deciding factor. In these times of economic upheaval it is crucial to make sure that you maintain every advantage you may have in the job market.
Your credit score and insurance rates.
The third unexpected benefit for repairing your credit and making it look as good as possible is that insurance companies can turn you down for coverage if you have bad credit.
According to insurance industry research, they have determined that people with bad credit submit 40% of all claims. For that reason if you have bad credit they may deem you to be high risk and they may deny you coverage. Statistics show that as many as 90% of all automobile insurance companies use credit reports for an underwriting tool.
While none of these things seem reasonable or fair the fact is that good credit is more important than most of us realize. If you have good credit do whatever is necessary to maintain it and if you don?t you can take steps to improve or repair your credit.
Why do you care about your credit score?
Image via Flickr by carolinqua
