{"id":7653,"date":"2009-08-07T20:00:24","date_gmt":"2009-08-08T00:00:24","guid":{"rendered":"\/\/www.askmrcreditcard.com\/news\/?p=7653"},"modified":"2009-08-07T20:00:24","modified_gmt":"2009-08-08T00:00:24","slug":"why-your-credit-score-is-more-important-than-you-think","status":"publish","type":"post","link":"https:\/\/www.askmrcreditcard.com\/news\/why-your-credit-score-is-more-important-than-you-think\/","title":{"rendered":"Why Your Credit Score Is More Important Than You Think"},"content":{"rendered":"

Yes, we all know it is good to have good credit.\u00a0\u00a0\u00a0 It is nice to always qualify for the latest reward card, to finance purchases, or to a house.\u00a0\u00a0\u00a0 That is the easy part.\u00a0\u00a0\u00a0 What few people realize is that your credit score is now being used for all sorts of other reasons.<\/p>\n

Credit Checks For Job Applicants<\/strong><\/p>\n

The New York Times has an article this week<\/a> about how companies are using and misusing your credit report in the process of hiring.\u00a0\u00a0\u00a0\u00a0 No longer is being qualified to do the work, or having a good resume enough to land a job.\u00a0\u00a0 These days, more and more companies are performing credit checks on new job applicants.\u00a0\u00a0\u00a0 Certainly, this is a misuse of the credit reporting process.\u00a0\u00a0 Unfortunately, it is completely legal in most states.<\/p>\n

The theory, of course, is that if you make poor decisions in your private life, that you might make those decision for a company.\u00a0\u00a0\u00a0\u00a0 Another concern is that someone in debt will be at a greater risk to steal from their employer.\u00a0\u00a0\u00a0 While those may be valid concerns, on some level, it is easy to see how most jobs don’t require financial skills.\u00a0\u00a0\u00a0 I also have a difficult time believing there is that much correlation between debt and theft.\u00a0\u00a0 The article also discusses how the credit reports can merely be an excuse to illegally discriminate on race or other factors.<\/p>\n

Combine this practice with the practice of denying credit based on where people shop<\/a>, and you have a classic case of racial discrimination by proxy.<\/p>\n

Of course the most stunning examples of this practice hurting people unjustly are those who have had financial difficulty due to illness.\u00a0\u00a0\u00a0 While I pride myself in managing my finances responsibly, I would max out my credit cards in a second if someone I loved needed medical care that was not covered by insurance.\u00a0\u00a0\u00a0 Should that disqualify me from a job?<\/p>\n

Other (Mis)uses of Credit Reports<\/strong><\/p>\n

It has been widely reported that insurance companies are using credit reports in order to set rates.\u00a0\u00a0 I know this is happening in auto insurance and it is becoming more common with home insurance as well.\u00a0\u00a0\u00a0\u00a0 It is hard to say what is next.\u00a0\u00a0\u00a0 In the future, will you pay more for telephone, cable, or electricity if you have bad credit?\u00a0\u00a0 Who knows. <\/strong>Is This Fair?\u00a0 Clearly it is not, but it is still legal and it is still reality.<\/p>\n

What Should You Do?<\/strong><\/p>\n

While there are a lot of good reasons to maintain good credit, many people can get by without credit cards or debt and feel that they do not need to worry about their credit rating.\u00a0\u00a0 They are wrong.\u00a0\u00a0\u00a0 You never know when you will be looking for a job that will require a credit check.\u00a0\u00a0 Sure I can construct some scenario where you rent a house, work for yourself, and don’t own a car.\u00a0\u00a0\u00a0 Even if that applies to you, damaging your credit will make it very difficult for you should one of those things change.<\/p>\n

I have occasionally heard people who have speculated with various levels of seriousness that they should declare bankruptcy so they don’t have to pay for their debts.\u00a0\u00a0\u00a0 I have a difficult time finding where to begin in telling them how bad of an idea that is.\u00a0\u00a0 Knowing that bad credit will haunt their jobs prospects is often a good place to start.<\/p>\n","protected":false},"excerpt":{"rendered":"

Yes, we all know it is good to have good credit.\u00a0\u00a0\u00a0 It is nice to always qualify for the latest reward card, to finance purchases, or to a house.\u00a0\u00a0\u00a0 That is the easy part.\u00a0\u00a0\u00a0 What few people realize is that your credit score is now being used for all sorts of other reasons. Credit Checks […]<\/p>\n","protected":false},"author":5,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[13],"tags":[],"yoast_head":"\nWhy Your Credit Score Is More Important Than You Think<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.askmrcreditcard.com\/news\/why-your-credit-score-is-more-important-than-you-think\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Why Your Credit Score Is More Important Than You Think\" \/>\n<meta property=\"og:description\" content=\"Yes, we all know it is good to have good credit.\u00a0\u00a0\u00a0 It is nice to always qualify for the latest reward card, to finance purchases, or to a house.\u00a0\u00a0\u00a0 That is the easy part.\u00a0\u00a0\u00a0 What few people realize is that your credit score is now being used for all sorts of other reasons. 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