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Credit Myth No. 5
Myth #5: Your credit score only counts when you're looking to borrow money.
Many people think this is the case, but your credit score counts in a lot more situations than just borrowing money.
If you're looking to rent a house or an apartment, the owner or manager will typically pull your credit before they give you an approval. Same thing if you're applying for a job—many employers nowadays are pulling credit and using that information as a factor in hiring. Also, your credit score comes into effect when you open up utilities for your home, or even set up car or home insurance.
One of the last ways credit can affect you when you're not looking to borrow money is with existing loans or credit accounts you already have! Creditors tend to do "periodic reviews," where they do a soft pull to your credit to make sure that your score hasn't gone down since when they issued you the loan or credit account. Many times with accounts like credit cards, if they find that your score has dropped, they can lower your limits, raise your rates, and more!
Bottom line, your credit affects you in lots more ways than you probably even realize ... not just when you're looking for a loan.
Click here to read previous entries in our credit myths series.
Greg Vogel is a Consumer Credit and Debt Advocate. He is a FICO and credit reporting expert with the goal of putting himself out of a job through creating awareness and education about the exploitative nature of the Credit and Debt industry.
