How good - and bad - credit impacts your life.
Your credit score follows you pretty much everywhere these days. Now is a perfect time to remind yourself how credit can help (and hurt) your daily life.
Getting a job.
Prospective employers may use your credit report (with your permission) to decide whether to hire you.1 Why do companies do it? Your credit report has information about where you live, how you pay your bills and whether you've filed for bankruptcy.2
Getting an apartment.
Landlords have access to your credit information, and a low score may mean your landlord rents to a different tenant, or charges you a higher security deposit.1 Utility and cell phone companies will also do the same - if there's negative information on your report, you could be required to pay a deposit, add a co-signer or pay a higher rate.1
Getting a loan.
Looking for a car, home or other personal loan? Lenders may use your credit report to determine whether you can have a loan, and what the terms of that loan would be. A low credit score often means a higher interest rate and you'll pay more for your loan over time. The same goes for insurance - having good credit means you can save money when you're looking for car insurance.3
Getting a better score.
Late payments, bankruptcies, collections and foreclosures can stay on your credit report for up to seven years, but a collection that's five years old hurts less than one that's five months old.3 So if you've made a bad decision in the past, it's not too late to improve your money management skills. To get you started, the federal government has advice on how to build and maintain a good credit score, including the Federal Reserve Board's Consumer's Guide to Credit Reports and Credit Scores.
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Expand Important Disclosures
Perez, Maria. How Poor Credit can Impact your Life. N.p. unknown. N.d. September 2013.
1Consumer's Guide : Credit Reports and Credit Scores. http://www.federalreserve.gov/creditreports/#credit_score. N.p. unknown. N.d. September 2013.
2Employment Background Checks. http://www.consumer.ftc.gov/articles/0157-employment-background-checks. N.p. unknown. N.d. September 2013.
3MyFICO: Credit Q & A. http://www.myfico.com/crediteducation/questions/default.aspx. N.p. unknown. N.d. September 2013.
4Perez, Maria. Signs your Identity has been Stolen. N.p. unknown. N.d. September 2013.
5Signs of Identity Theft. http://www.consumer.ftc.gov/articles/0271-signs-identity-theft. N.p. unknown. N.d. September 2013.
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This article is based on information available in September 2013. It is for general informational purposes only. It is not intended to provide specific financial, investment, tax, legal, accounting, or other advice and should not be acted or relied upon without the advice of a professional advisor. A professional advisor will recommend action based on your personal circumstances and the most recent information available.