You probably understand that your credit history will affect your ability to qualify for a new credit card as well as to receive an expansion of your current credit lines. Like most people, you are also likely to realize that buying a home or a car will also depend on having good credit. But did you know that in today's society, having a poor credit profile might hamper many other important areas of your life?
- Employment. Employers use many different criteria when judging candidates, such as experience and training, and they are permitted by federal and many state's laws to use your credit history in their hiring decisions. While members of certain regulated industries, such as mortgage professionals, require a clean credit history in order to obtain licensing by the state, even a mom-and-pop business can say "no" if you have too many issues on your credit report.
- Personal relationships. Some advise that the credit histories of potential marital partners be shared and discussed to confirm compatibility in regards to finances. If one spouse is responsible with credit and the other isn't, this can lead to friction later on in the relationship. Show your potential mate that you are responsible by keeping a positive credit history.
- Insurance. A poor credit history may affect your rates and your ability to qualify for certain types of insurance, such as auto insurance. Though the practice is subject to differences in state laws, many insurers take credit into consideration when underwriting policies because they believe that poor credit reflects a higher accident risk.
- Starting a business. Most investors and lenders will require a personal credit report from the principals of a business before entrusting them with money. After all, if you can't manage your own personal finances, how can you manage your business', which are much more complex? Having a positive credit profile may increase your chances of getting a startup funded or funds to expand a business.
As you can see, credit isn't only about applying for loans, mortgages and credit cards. Maintain a close watch on your credit profile in order to take action if anything threatens to negatively affect your credit history — major areas of your life may count on it.
Now that you know more about how your credit history affects other areas of your life, get your FREE credit score.