Bad credit score may stop you from getting your dream job

We all want the respect and consideration of our community and neighbors. This is called your reputation and it is worth protecting. However, we all have a story that is being told about us by a source who has never met us personally and that is also critical to your future success. This is your credit score and the data that generates that magic number. This is a part of your reputation of which you have more than you realize.

You want to monitor and and maintain an accurate summary of your credit activity. It comes up more than you realize in your financial life. Unfortunately, this is not what I consider private information anymore. Many institutions and individuals can use various channels to get access to part or all of your credit information. Therefore, you should limit the access to this information where you can and you should read it to know what others can know about you.

It may be accurate data or it may be full of errors and obsolete information. You may be faulted for the choices of your children, parents, ex-spouses or others that you have co-signed loans for. In addition to people that you actually know, there could be accounts and activity from strangers who have been included in your credit report because of flaws in the software at the major credit reporting agencies: Equifax, Transunion and Experian. The computers are adding millions of data sets every day from an enormous number of reporting sources nationwide and sometimes it is put in the wrong account.

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You should take time at least once per year to review and repair this vital part of your financial security for these reasons:

  • It may be referenced when you apply for a job. Many job applications include the permission of your prospective employer to examine your credit report to judge your character.
  • A poor credit score will give your property casualty insurance company an excuse to increase your premium. As one agent explained it to me, people who don’t pay their bills on time also are known statistically as the type of people who may do something risky like smoke in bed, increasing the risk of a claim.
  • In the future, you will want to make a major purchase like a car or house and the credit score will determine the interest rate you will be offered. It takes months to to repair your credit rating and you will be glad that you made the effort to improve your score long before you actually needed to apply for a loan.
  • A significant risk that we are all vulnerable to sadly is identity theft. The sooner that you know that someone is opening accounts in your name, the more successful you will be limiting the damage and cleaning up the mess.

There are many reasons that should motivate all of us to periodically read our credit report and take action on correcting and improving the picture that it paints of our past choices. This is a reputation that you want to protect and improve because it will follow you wherever you go.