Your credit report can effect much more than just your credit score.

Since your credit report provides a wide array of financial information, many businesses beyond credit card companies will check it when approving you for products or services. Below are businesses that may use your credit report when evaluating you on anything from getting a car loan to renting an apartment.  

Your Credit Report Affects Much More Than Your Credit Score

July 21, 2017

Your credit report can effect much more than just your credit score. You may think your credit report is just an overview of your credit history, but it’s so much more. Think of your credit report as a snapshot of your overall financial health and background. A credit report reflects not only your credit, but where you have lived, how you’ve paid your bills, any bankruptcies, and if you’ve been sued.

Since your credit report provides a wide array of financial information, many businesses beyond credit card companies will check it when approving you for products or services. Below are businesses that may use your credit report when evaluating you on anything from getting a car loan to renting an apartment.

Future employers

Often times, a business will do a credit report on top of a background check when deciding on hiring a new employee. They must ask for consent first, so you will always be aware if this is part of the hiring process. If the information on your credit report does lead the business to not hiring you, they must provide you a copy of the report for your review. Laws vary by state, look here for information on states that limit credit report usage by employers.

Insurance agencies

Insurance agencies use your credit report to help determine the amount of risk you carry. This system is referred to as credit-based insurance scoring, which means companies look at your credit report along with factors like your driving history, past claims, and personal details to decide on your rates. According to FICO, around 95% of auto insurers use a credit-based scoring system when deciding on rates.

When you apply for a new apartment lease, the company or landlord may ask to check your credit report before approving you for a lease. If they do not approve you for a lease based on information from your credit report, they must tell you and give you information on how to obtain a free copy of the credit report to review. If this happens, always get the free report and look it over for any errors or inaccurate information; always dispute any errors to help strengthen your report.

Loan providers

Anytime you apply for a loan, the lender will check your credit report to help them decide whether to lend to you and what the terms should be. The better your credit report, generally the better loan terms you can get, such as lower interest or higher loan amount. Lenders all have different criteria when reviewing your credit report, but many look at your payments, your credit usage, length of credit history, and how many new accounts you’ve opened recently.

Whether you’re shopping for car insurance or applying for a job, your credit report affects many decisions throughout your life. If you keep an eye on your report and continue to use your credit responsibly, you can feel confident anytime a business checks your credit report.

Have more credit report questions? Ask us below!

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