What You May Not Know About Your Credit
By Mike Wayman
Many people do not understand how their credit score works or how it affects their ability to borrow money, finance large purchases, even obtain auto insurance.
For instance, having no credit at all is not better than having bad credit. It is recommended that even if an individual has no need for a credit card or charge account that they obtain one and use it occasionally. This establishes a pattern of purchasing and repaying on credit without late payments or over-charges. This practice actually improves your credit score, even if you had the cash in your pocket to cover the purchase you made with a charge card. Likewise, it is best to keep an account open, even if you choose to use it infrequently. If a charge account incurs a high annual fee, you must decide if it is worth the cost of maintaining the account.
It is also a myth that only people who have your express permission can view your credit report. Actually, anyone who knows your social security number can access your credit report, including potential employers. Frequent inquiries into your credit report, such as when shopping for lenders for a home or auto loan, also do not hurt your credit score as some mistakenly believe, nor does employing the services of a credit-counseling agency to help manage and pay off existing debt. Knowing these things can help you to manage your credit wisely and succeed in maintaining financial stability.
Think Bad Credit Only Affects Loans? Think Again
By Mike Wayman
Bad credit definitely affects your ability to secure a loan, but it can also affect you in other ways. Unfortunately, a negative credit rating can even affect your success at finding new employment.
Potential employers must ask your permission before pulling your credit report for review, but it is becoming a standard part of many job applications to request this permission of you. If you refuse to give your permission, you may not even be called for an interview. If you give your permission, and you are denied employment because of something contained in your credit report, the potential employer is required by law to disclose to you exactly what it was that caused your denial of employment. But this is an easy point to sidestep if an employer really doesn’t want to explain. Many other reasons can be given for not continuing to consider you for employment, so it is not unusual for an applicant to never know what it was that caused the denial.
Essentially, once your credit report reflects negatively for any reason, you are likely to bear consequences for a period of time whether the negative report is truly a reflection of irresponsibility on your part, or simply the result of hard economic times, even to the point of making a new job hunt more difficult.
