Credit Reports & Financial Advisors

Credit where Credit is Due

In all developed countries, a person’s credit is their defining aspect as a consumer. From the applicant’s credit score, businesses will decide if they are worth investing time and money into. For better or worse, you are your credit. Credit is scored in three separate agencies, meaning consumers actually have three separate credit scores. These numbers combine to form a person’s base credit score. This is the score that will appear whenever a business or company requests to run an applicant’s credit.

How reliability is measured

A person’s credit is dependent on a wide variety of effects. For one, credit relies a great deal on past bill payment reliability and timeliness. Being late consistently on payments or only paying the minimum amount due will reflect negatively on a credit report. Having a large amount of revolving credit can also drag a person’s credit down. While someone’s credit may be decent, being in large amounts of debt all the time will make someone appear to be more of a financial risk. At its heart, that is what credit reporting boils down to – are you a risk? Living life with an abysmal credit score can be remarkably difficult; in fact there are several common places you are likely to be asked to submit for a credit report.

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Loans and the Like

Banks will base rather or not a person qualifies for a loan on their past financial performance. The lower the applicant’s credit, the higher the interest is likely to be – assuming they qualify at all. This includes personal loans, mortgage loans and car loans. Simply put, having a bad credit score could result in thousands of dollars of additional fees and charges over the lifetime of the loan.

Credit card companies will also want to run credit before issuing a line of credit to a potential card holder. From their credit score, credit companies can determine how timely they can expect monthly payments or if the applicant is likely to default (be unable to pay) after running up a credit bill.

Potential Employers and Landlords

Credit scores are often correlated to a person’s responsibility and reliability. When applying for a job, most employers will request a credit check. This not only allows them confirm identity but to also scope out an applicant’s history. Low enough credit could ultimately disqualify applicants from certain positions inside of companies.

When signing a lease or contract in an attempt to rent a house or apartment, potential landlords will often want to run an applicant’s credit. Credit reports to a landlord could indicate if a possible tenant is likely to be steadfast in their property. If a consumer has a history of breaking leases or skipping out on contracts, they are more likely to do it again. Credit score can affect the size of the deposit required and the length of the lease offered.

Insurance Companies

Cars, homes, boat, renters – insurance is not only responsible but often required by law. When applying with an insurance company for any type of insurance, the company will likely want to check the customer’s credit. Credit to an insurance company will determine the premium set on the insurance. The lower the credit score, the higher the money paid to the premium. Even more, insurance companies will likely want to review credit score each time a policy is renewed. If the customer’s credit has improved since they last signed up for that company’s policy, the customer may see a drop in their premium.

Contracts for Products and Services

Most products that require a contract will have a credit aspect. The most obvious being cell phone companies. However, credit requests may also be made by the electric, internet and cable companies. With a good credit score, some companies will waive their deposits altogether.

No matter who is asking, it is ultimately the choice of the consumer to consent to a credit check. A company cannot run a credit score without the signature of the score’s holder. This being said, companies, businesses and similar institutions have the right to refuse services to customers who will not consent to the check or impart additional fees to people who with too low of a credit score.

Get your Identity Check & Experian Credit Report Here!


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