Highlights:
- Your credit history and credit scores may impact you more than you think
- If you’re applying for a job or apartment, your credit may be checked
- Your credit may impact your utility services, for better or worse
You already know your credit scores matter when you apply for a credit card, make a major purchase like a home or car, or apply for a loan. But did you know your credit history may impact your application for an apartment or a job? Here are 4waysyour credit history and credit scores can play a rolein everyday life.
#1: When you're renting a home or apartment
Depending on the apartment or leasing company, credit report and credit score checks may be part of the rental application process.Like any potential lender or creditor, landlords and leasing companies want to know: what is the likelihood that you will honor your financial commitments? They may look at your credit history to find out if you have a history of missed payments or have delinquent accounts.
If your credit application is rejected because of information on your credit reports, lenders and creditors (including landlords and leasing companies) are required to tell you the reason your application was denied through what’s called an adverse action notice. This notice includes the name and contact information of the credit bureau which furnished the credit report. If you receive an adverse action notice, you are entitled to a free copy of your credit report from that credit bureau.
But there’s also good news: On-time rental payments may be reflected on your credit reports. Landlords or leasing companies aren’t required to report to the three nationwide credit bureaus, but some do; you can ask your landlord or leasing company if they do.
As always, monitor your credit reports to make sure that accurate and complete information is being reported.You’re entitled to a free copy of your credit reports every 12 months from each of the three nationwide credit bureaus by visiting www.annualcreditreport.com. You can also create a myEquifax account to get six free Equifax credit reports each year. In addition, you can click “Get my free credit score” on your myEquifax dashboard to enroll in Equifax Core Credit™ for a free monthly Equifax credit report and a free monthly VantageScore® 3.0 credit score, based on Equifax data. A VantageScore is one of many types of credit scores.
Credit checks by prospective landlords or leasing companies may be hard inquiries, which may impact credit scores, or soft inquiries, which do not. You can ask what type of inquiry will be used.
#2: When you apply for mobile phone or utility service
Like other creditors, utility companies and mobile phone providers may check your credit reports in order to review your history. A history of late payments or other negative information may mean you’ll need to pay a larger deposit, or your application may be denied. The company may also ask you to provide proof of income or a letter of guarantee from someone who can pay your bill if you do not.
Speaking of utilities, there is also a consumer reporting company called the National Consumer Telecom & Utilities Exchange (NCTUE). The NCTUE maintains data including payment and account histories as reported by telecommunications, some paid TV and utility service providers that are members. Your payment history may be maintained by the NCTUE even if it’s not reported to the three nationwide credit bureaus. Some utilities and mobile phone companies may check your NCTUE report.
#3: When you're making utility or mobile phone payments
Most utilities and mobile phone companies don’t report to the three nationwide credit bureaus – Equifax, Experian and TransUnion. But if your account isn't paid as agreed and turned over to a collection agency, it may be reported as a collection account and your credit scores may be impacted.
#4: When you're applying for a job
Federal law allows both current and potential employers to view your credit reports when they are considering you for a new job – or even a promotion. Although not all employers check credit, some industries such as financial services or healthcare may because of the sensitive information their employees can access.
If a prospective or current employer plans on checking your credit reports, they must first get written permission from you. This could be in the form of paperwork you sign when you apply for or first start your job.
Employers and prospective employers must let you know if you do not receive a job or promotion because of information in your credit reports, and must provide you with the name and contact information of the credit bureau furnishing the report.
