Do You Know Who Is Looking At Your Credit Score?
Do you know your credit score? Do you know who else is looking at your credit score? The answer may surprise you.
Credit card critics want you to believe that your credit score is not important – that having and using credit cards is not essential. While it may not be essential, having a good credit score will save you money, and may influence more things than you realize.
Here’s a short list of people and businesses that use your credit score to make decisions about you:
1) Your Bank – Online banks like ING check your credit score when you open up a checking account, and all banks will check your credit score if you apply for a loan.
2) Your Employer – In virtually every job application you will ever sign you will find a clause that allows your employer to pull your credit report and score. Your credit score may not be the only factor that decides whether or not you get a job, but it is one of them.
3) Your Landlord – If you rent, then it is very likely that your landlord will use your credit score as an indicator of your trustworthiness. We rent, and every landlord that we have ever had has checked our credit scores. I know because they usually charge us an additional $50 fee to cover the cost of running the report.
4) Your Utility Company – If you are opening up an account with them for the first time, or even if you are switching addresses, it is very common for electric and water companies to pull your credit score. They use it to decide how much of a deposit you will need to give them before they provide their services to you. Again this is a situation where people with low credit scores are required to pay more than people with higher credit scores for the same level of service.
5) Your Insurance Agent – Most insurance agents do not use your FICO score to decide your insurance rates. Instead, they have their own set of credit scores that they use to decide how much they will charge you. The credit scores that they use are still based off of the information in your credit report though. Again, people with low credit scores are increasingly being charged higher premiums for the same level of insurance.
6) Your Cell Phone Provider – Cell phone companies always pull your credit score before they allow you to sign a contract with them. If you have a low credit score, then your best option is to go with a pre-paid cell phone, otherwise you may find yourself without any cell phone at all.
7) Credit Card Companies – Obviously, when you apply for a credit card, the issuing bank pulls your credit score and uses it to make a decision about whether or not to give you a credit card. Sometimes credit card companies pull your score just to decide whether or not to send you an offer of credit. If they do this without your authorization (meaning you did not apply for the card) it is known as a “soft pull” and it does not affect your credit score.
Again, this is just a short list of the people and companies that use your credit score to make up their minds about you. It’s becoming so common that it may very well feel like everyone knows your credit score but you!
Since credit scores are becoming increasingly more important in everyday life, the best thing you can do for yourself is to get your credit score as high as you can. The easiest way to raise your credit score is to make your payments on time, and keep the balances on your credit cards low.
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