Did you know that your credit report is telling all of your dirty secrets? And not just to lenders, but many others as well. Having bad credit doesn't just mean that you won't be approved for a mortgage, auto loan or personal financing. It means a lot more. Many companies look at your credit report to decide whether or not to do business with you. They even decide how they will do business with you based on your credit history. You may not have known that many non-lenders have been looking at your credit information for years. Your insurance rates have probably been set based on your credit history. When applying for a job, the employer may have looked at your credit to assess your character. Did you know that your auto insurance premiums may be based on your credit history. According to a 2001 study, 92% of the top 100 automobile insurance companies report using credit information to underwrite new business. Fifty-two percent of these insurance companies use the information to determine what rates you will pay. There is reportedly a link between bad credit and auto-insurance claims. Some companies will even give the information from your credit report more weight than your driving record. The correlation isn't proven anywhere, but it does appear that those who manage their personal finances successfully are conscientious about their driving and car maintenance. They understand the value of their vehicle. Not all states allow this to happen. California, for example, does not allow insurance companies to use its residents' credit histories. Many states are starting to take notice of the practice, but many still allow it to go on. Farmers Insurance vice president of auto-product management Greg Ciezadlo was quoted as saying that bad credit can cost a customer up to 40% more in premiums. Allstate is also reported as using your credit history to make approval determinations. Your poor credit could even cost you that dream job. As many as 42% of employers in 1998 performed credit checks on employees prior to hiring them. The information is often used simply for verification purposes. But negative information can prove hard for potential employers to ignore. They assume that applicants with poor credit histories aren't capable of management, and may even steal from the company. The Fair Credit Reporting Act has limited the use of credit checks by employers. The employer must notify the applicant that the credit report will be looked at. They must also tell you if you aren't being hired based on information on your credit report. Fewer employers are doing checks every year. Have you checked your credit report? You may think that because you pay all of your bills on time that you don't have to. But almost 80% of reports contain errors. Check your report at least on an annual basis. There are people looking at it, and it is telling them not only your financial standing, but your character as well. Make sure that your credit report is saying the right things about you. |
