Individual credit reports are used for more purposes today than they were only a few decades ago. Credit reports at one time only had an impact on banking and the ability to obtain credit, such as a mortgage, a vehicle loan, a credit card or a personal loan. A poor score or several negative marks, such as delinquent accounts or judgments, were a sign to lenders that the person in question may not repay credit in a timely manner.
Sadly, credit scores have infiltrated many other areas of life, with negative consequences for millions of Americans. If you aren’t carefully monitoring your credit report, inaccurate information could end up causing you a host of issues at a later time.
Many employers look at credit scores these days
While credit scores really only indicate a person’s economic status via one’s ability to repay debts on time and in full, more and more companies are looking at a credit score as an indicator of ethics and personal value. If you are seeking a new position or trying to push for a big promotion, chances are good that your potential or current employer will pull and review a copy of your credit report.
Of course, your credit report has nothing to do with your ability to perform your job well, but it helps companies cut down the number of potential applicants for a position, which can make filling it easier. This, sadly, places a huge burden on people who came from lower socioeconomic backgrounds or those who experienced unexpected hardship, like a sudden accident, illness or loss of a loved one that had a profound financial impact.
Landlords are also looking at credit report instead of rental history
If you rent instead of own, your next landlord could decide to pull your credit report instead of, or in addition to, your rental history records. Even if you’ve never missed a rent payment because you chose to make other payments late when your budget was tight, a potential landlord could see those late payments or any other blemish on your credit report and refuse to lease to you.
In some cases, a poor credit report could also result in a higher cost for your rent or security deposit for the property. While that may seem unfair, it has become a common practice.
Don’t get shocked by inaccuracies on your credit report
Mistakes in credit reporting happen. Companies may mistakenly mark an on-time payment as late or missed. Other times, information that belongs to another person altogether could wind up on your credit report, dragging down your score and costing you a promotion or that great rate when you try to refinance.
You have the right to challenge inaccuracies on your credit report. Doing so as soon as an issue arises could save you heartbreak and major losses in the future.