The Hidden Impact of Your Credit Report

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The following is a guest post. Enjoy! 

The Hidden Impact of Your Credit Report

You know that potential lenders and credit card companies check your credit history before approving you for new lines of credit. But, did you know that your credit report is run for far more obscure reasons? 

That’s why it is so crucial to use online tools such as credit monitoring to keep your credit report up to date.

 

Described below are a few surprising companies that keep track of your credit score that you may not have expected.

 

Insurance Companies

 

Insurance companies run your credit report when determining your home and auto insurance rates. Insurers claim that folks with higher credit scores are far less of a risk than those with lower scores. How does this affect you?

 

“Consumer Reports” notes that drivers with a poor driving record but great credit scores pay as much as 31% less on their auto insurance premiums, while those with clean driving records but bad credit scores pay up to 143% more. Fair or not, having bad credit makes you a bad driver in your insurance company’s view.

 

The good news is that while about 92% of insurance companies check your score when you apply for a policy the first time around, only about 14% check it for a renewal. If you’re having credit problems, consider sticking with your current insurer while you boost your score.

 

Employers

 

An increasing number of employers are checking the credit histories of job applicants. Some companies claim that a good credit score indicates how responsible an employee will be in their professional lives. Other organizations believe that your credit score reflects your level of trustworthiness. If you’re applying for a job with the government or a financial institution, you can bet those companies will run your credit report.

 

Individuals with poor credit histories won’t be hired because they are considered far more likely to steal company funds or accept bribes from competitors than employees with good credit scores. Your credit score might also affect your chances for promotion. Some companies will check your credit before offering you a higher position. If you have a substandard credit score, you will more than likely be passed over. In some cases, employers who need to lay off people will re-run the credit scores of all employees. Those with the lowest scores are the first to get the pink slip.

 

Banks

 

You undoubtedly know that financial institutions run your credit history whenever you apply for a loan. But, did you know that banks check your report whenever you apply to open a new savings or checking account?

 

The reasoning is that you could very well become overdrawn at some point or another. Your credit score indicates how likely it is that you’ll pay off those overdraft fees.

 

Utility Providers

 

Utility providers and cell phone companies commonly run your credit report before providing you with service. If you have credit issues, you could be required to put down a deposit, pay more in plan rates, or even be denied service.

 

Because of all the hidden impacts of your credit report, make boosting your credit score a number one priority. This could save you thousands of dollars over the course of your lifetime.

 

How about you all? Has your credit report been run by organizations or companies that you did not expect it from? 


Have you ever had any of the experiences described above (such as had your credit score affect your career opportunities at your employer or your insurance premiums)?


Share your experiences by commenting below!

***Photo courtesy of http://www.flickr.com/photos/amboo213/4020584983/sizes/o/in/photostream/

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