How Important Is Credit Score

Having a low credit score and a bad credit report is not something that we all strive to accomplish. There are other things that a bad credit report and low credit score my have an influence:

1 Job Application

Most employers check a credit report on job applicants to see if personal finances are in order before offering a job. The time consumed by creditors call to an employee will at work will reduce job efficiency and the need for money may cause theft of company property or funds.

2 Cell Phone Service

Signing up for new service or replacing current cell phone often involves a free phone with a two year service contract. Credit report provide information as to the ability of the customer to meet financial commitment of the sales contract.

3 Property and Casualty Insurance

The insurance company has an expense to underwrite coverage on your home and/or vehicle and would like to have the coverage for long period of time. In addition, when a premium is late a notice of late payment or cancellation is sent to insured at additional expense. Policy holders that are desperate for money may fill a questionable claim to get money. A credit report indicates financial situation and ability to pay premium.

4 Mortgage application, second mortgage debt consolidation, or home equity line of credit is contingent on collateral to provide security for the loan, income to be able to make the loan payment, and your credit score to show how well you pay your bill both now and in the past. The amount of the loan and the interest rate are influenced by your credit report.

5 The owner of rental property will check your credit report to see if you are paying your bills so they is high probability you can pay your six month rental contract. A credit report will show if you have had financial problems with housing before.

6 Then applying for credit like a credit card or car loan the credit score will determine the interest rate or whether you can get credit. Bad credit can result in interest rates in the 19% to 26% or thousands of dollars a year in increase payments.

You are entitled to a free credit report from Trans Union, Equifax, and Experian each year. Review your report and contest each item that is not correct. Under the provision set forth in 1977 Federal Fair Credit Reporting Act, request the agency to prove in writing the accuracy of the reporting on your account. Under the terms of the Act and succeeding court cases, the credit agency has 30 days to prove such accuracy or remove the account entirely from your report. Send letter certified mail to show proof of notification. Keep track of all three agencies and follow up to make sure the entries are correct.