Most folks realize how imperative it is to have a good credit report and a high credit score when they try to get a mortgage 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 regarding credit scores and credit reports. Negative credit can have an effect on many things that you may not even be aware of.
One key reason to try to keep your credit clean and your score high is if you own any credit cards. A credit card company will often use any pretext they can to jack up your interest rates. They can in reality continue to observe your report at anytime after you become a cardholder and even if you have never been behind schedule on a payment to them if they see that you have had tribulations with other lenders they can jack up your rates. It is likely that they could double or triple your initial rates.
Any problem showing on your credit report is a sufficient reason for them to boost your rates. Many times erroneous and inexact information can show on your report and your rates will be unduly jacked up. It is smart to repair any problems that you see on your report as soon as possible for this motivation.
Another convincing reason to have a good credit is to help you find a job. A would-be employer can call to see a copy of your credit report and it is lawful for them to not employ you based upon what is showing on that report. However, not every background check requires a credit inquiry and they must have special authorization from you to access your credit history.
If you are one of a few similarly qualified prospects it is probable that your credit rating could become a deciding aspect. In these times of economic confusion it is fundamental to make sure that you retain every advantage you may have in the job market.
A third startling benefit for having a good credit report is that insurance companies can turn you down for coverage if you have bad credit. According to their in-house investigation they have determined that drivers with bad credit actually submit 40% of all claims. If you have bad credit you are deemed a higher risk to the insurance companies. The statistics may be as high as 90% of automobile insurance companies use credit reports as an underwriting tool.
While none of these things seem rational or fair the truth is that good credit is more crucial than most of us recognize. If you have good credit do whatever is required to sustain it and if you don’t you can take steps to improve or repair your credit.
