Read these 10 Uses of Credit Reports Tips tips to make your life smarter, better, faster and wiser. Each tip is approved by our Editors and created by expert writers so great we call them Gurus. LifeTips is the place to go when you need to know about Credit Report tips and hundreds of other topics.
Even the utility companies want to make sure you have good credit before they let you get your phone, electricity or gas hooked up in your name. Once they get you set up they want to make sure you will make your monthly payments on time as required. So, just like in many other cases, your payment history is reviewed from your credit report. They also look to see if you have any major negative items on the report. Things like a collections item from another utility company in your past can be a big red flag. While you could be denied access to the utility, it is also possible that they could require you to pay a large deposit before it can be hooked up in your name.
Did you know that the premiums you are charged for insurance could be dependent on your credit score? The higher your credit score, the lower your premium. Not all insurance companies consider credit history when determining a premium, but most do. This helps them to determine your insurance risk. If you have a lot of debt, adverse actions or have trouble making your payments you may be considered a higher risk. The risk is higher because someone with a lot of debt that is out of control may file fraudulent claims to collect the insurance money.
Watch out delinquent parents. Your credit history can be checked by agencies that enforce child support payments. While the inquiry itself will not count on your credit report, failing to make your court-ordered child support payment can. The child support enforcement agency can report this, which will count as a negative on your overall credit history.
Not only is it important to review your credit history, but it is also a good idea to know your credit score. There are a number of sites that advertise that they can give you a free credit score, but be careful where you obtain this information from. You don't just want to give anyone access to your personal information. Start by looking for this from one of the three major credit reporting agencies – TransUnion, Experian or Equifax. You may find that they make this information available to you on a trial basis. Either way, it is a good idea to find out what your credit score is and what that score means to you.
Opening a checking account seems so simple since you just need a place to store your money, right? Well, your credit history may still be taken into account by the bank to determine if they will approve you to have one. When a bank looks at your credit report, it is to check your payment history. The idea being that someone who does not make their payments on time may also regularly overextend themselves and overdraw the account. Your credit history may not always be reviewed, but a bank does tend to look at your debit report. This provides information on your past banking history, including the number of overdrawn checks you have had.
In order to get approved for regular cell phone service, you need to complete a credit application and allow the service provider to request a copy of your credit report. This will be reviewed to determine if you have adverse credit. If there are problems, you may be asked to pay extra to complete the contract or possibly even provide a large downpayment. This type of credit check does count as an inquiry on your credit report. If you know you have negative credit, you can avoid a credit check by buying a prepaid cell phone or other type of service.
When you want to buy a new car, you may need to get a loan to help you afford the one that you want. Before you go to a lender to apply for an auto loan, find out if you will be qualified for one by ordering an instant online credit report at a website like Credit.com. First, check to make sure that all information on the credit report is correct. If you find any errors, get them corrected immediately. Corrections to your credit report can take months to complete so don't delay in contacting the creditor and the credit bureaus to get things changed. Next, figure your debt-to-income ratio. Too much debt can keep you from getting a car loan. When you feel confident that your credit is in good shape, talk to a financial institution to see if they will approve you for an auto loan.
Buying a house can be a very stressful time for anyone. There is a lot that needs to be done, including checking your mortgage credit report. Armed with this information and knowing your gross monthly income, a lender reviews your total debt, as well as total monthly payments to help determine your debt-to-income ratio. This tells them how much money you can afford to pay each month towards your mortgage. Other information they look at when doing credit checks include your payment history. Before giving you a loan, your potential creditor wants to make sure you will make your regular payments on time each month.
Renting an apartment may not require you to endure as rigorous a process as buying a house; however, your credit history may still be reviewed prior to approving a lease. Your potential landlord may be interested in reviewing this to determine if you will pay your rent on time each month based on your past payment history. When a landlord checks your credit report, they will find this information is easy to obtain and also gives information on your past addresses. If you tend to move around a lot, you may not make an ideal tenant.
In order for a potential landlord to review a tenant credit report, they must first get your permission. Even though this is a review of your credit report, this type of inquiry will not hurt your credit score.
Did you know that a potential employer may want to review your credit history? If they do want to review your credit, they must first get your approval. Typically, you will be asked to complete a waiver. Should they determine that they are not going to hire you based on the information provided in the credit report, they are required to notify you. Typically an employer who reviews your credit report is interested in finding out if you have a major negative credit items. They also may be checking to confirm that the information you provided to them matches the information (previous employment, name, address, etc.) on the credit report.