subject: Do You Know Who Is Checking Your Credit Report? [print this page] Do You Know Who Is Checking Your Credit Report?
Your credit report has a direct impact on your chances of being approved for a loan or credit card. A decision is made, after reviewing your credit report, whether you are approved for a zero APR introductory offer or a low interest rate. What you may not know is that other companies or associations are also checking out your credit report as a measure of your character for situations that may surprise you.
Essentially, anyone who has a permissible use can obtain and view a copy of your credit report. The Fair Credit Reporting Act has specific details on what constitutes "permissible" use. In any case, a poor report may mean the difference between being approved for things that will have a direct impact on your quality of life.
Housing Opportunities: Little, poor or no credit history can mean limited opportunities to rent a home or an apartment. In many housing markets, landlords have the ability to pick and choose their tenants. They may view your credit rating as a measure of your responsibility to pay bills on time. Regardless of a person's ability to pay, an applicant who has a questionable credit history will be more scrutinized to ensure that the risk the building owner takes is worth it. If your rating is below par or no history, you may have to find a friend or relative to co-sign your lease, or you may be required to pay a higher rent or provide a security deposit.
Employment Opportunities: Nearly one hundred percent of all companies do background checks on potential employees. At a minimum credit reports are checked. A clean financial record may mean the difference between getting hired or not. An excellent credit history shows responsible behavior. While one late payment may not raise any red flags, a pattern of irresponsible behavior may. Companies are looking for employees who are productive, responsible and most trustworthy.
Insurance Opportunities: Insurance companies routinely use an applicant's credit history before extending auto or health insurance and to help determine rate coverage and premiums. The theory is that credit is the best predictor of whether someone will file a claim. Eighty-two percent of automobile insurers decide to accept an application for insurance based on their credit report more than the applicant's driving record according to a report by the Texas Department of Insurance.
Wireless Phones and Utility Companies: Even the most basic services can be affected by a bad credit report. If your report shows a habitual pattern of late or default payments, you may be denied gas, electric or cell phone services. If they do provide service for someone with questionable credit, they may require a significant deposit, a co-signer or charge higher rates.
No matter what your current situation, your credit history will eventually impact decisions you will make in the future. That's why it's important to begin building a credit history or work to improve it.
