You are probably one of the millions of people who have seen the famous commercial series with the band of guys using different music styles to bash themselves for not checking their credit reports. They are often hilarious, but is there any grain of truth to these advertisements? The answer may surprise you.
Your credit report is one of the first things that banks and other lenders check when you apply for a loan. If you have poor or even mediocre credit you may be turned down. The lower your score is, the higher the likelihood that you will not be able to get the financing you need. Similarly, some landlords use a credit report to determine whether someone is eligible to rent one of their apartments or units. A higher score can mean lower interest rates, and therefore lower monthly payments.
When you attempt to buy or even rent a home, the first thing that is going to happen is that the mortgage company, bank, landlord, or other financial institution is going to check your credit and compare it to your monthly income. A low credit score is a major turn-off, showing that you are not consistently paying your bills on time, have multiple past due or charged off accounts, and cannot be trusted. This will often result in your application being turned down.
Even though you do not have to have money to be hired for a good job as a general rule, your credit can actually keep you from being hired for a job with a big company that present elevated initial pay. Companies such as these use a credit score in a very similar manner to banks, to verify your honesty and accountability. A bad credit score is frequently a major negative factor for those companies that shell out the bigger paychecks.
Companies that offer better benefits, significantly higher starting pay, and long-term jobs use a credit report to gauge your level of responsibility. Even someone with a lot of experience and several glowing letters of recommendation may be turned down if they have very poor credit. Now we will discuss the all-important question: why?
In addition, credit reports let lenders know what kind of debt you have unpaid, and whether or not it is overdue, and, if so, how much. They also state how much you are in debt for each separate reporting company. In this way, they can resolve whether you are capable of taking on one more monthly premium, founded on your earnings.
Whether you are hoping to get the home of your dreams, find a new or replacement vehicle, or just switch to a higher paying job, you will want to use one of the many websites that offer a free annual credit report. You do not have to opt for the monthly benefits, but choosing to read what may hold you back from what you are hoping to do can prevent some embarrassment, or give you a new level of confidence. Making good financial decisions is the best way to have a positive credit report.
We have all seen the series of commercials with the guy singing about his credit. Each discusses a different reason why he should have avoided a bad credit record, but are credit reports and credit repair really that essential?
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