Updated: 7/6/2011 6:11 PM ET|
5 people who peek at your credit
It's not just lenders who check your credit scores. Bad scores can also make it costlier to get insurance, an apartment or a cell phone -- and harder to get a job.
How much do you know about your credit scores? Those three-digit numbers are tied to our financial lives, yet many young adults haven't given them the attention they deserve.
Your scores can play a role in your ability to rent an apartment, qualify for a loan or even get a job. They can also affect how much you'll pay on interest charges, insurance and even cellphone contracts.
Make building stellar scores a priority while you're young and you could actually save hundreds or thousands of dollars over your lifetime. However, if you don't take your credit seriously, bad scores -- or even nonexistent scores -- will cost you.
Who's keeping score?
Your credit scores are basically used to predict the possibility that you won't pay your bills. Scores are compiled by Fair Isaac and are sometimes called FICO scores. The top possible number is 850, but topping 800 is probably unrealistic. A median score usually falls in the 720-to-725 range, meaning half of consumers fall above that point, half below. Even if you haven't given your FICO scores much thought, there are plenty of others who have or will, so you'll want to aim for the mid-700s to make the best impression on:
1. Lenders. This group is the one most people associate with their credit scores. Having a good rating can help you qualify for the best rates on a mortgage, car loan, credit card and even a small-business loan if you've got that entrepreneurial spirit. Nonexistent scores can make it impossible for you to qualify for a loan or credit card.
2. Insurers. The majority of auto insurance companies use your credit scores when determining your rates, and the practice is also common among home insurers. A survey by Consumer Reports among eight popular auto insurers found that drivers with top scores pay up to 31% less on their premiums than if credit scoring wasn't factored in, while those with bad scores pay as much as 143% more.
3. Landlords. Increasingly, you may need good credit scores to rent an apartment. Landlords view your credit rating as a measure of your responsibility to pay bills on time. If your rating is below par or you don't have credit scores yet, you may have to find a friend or relative to co-sign your lease, or you could be required to pay a higher rent or security deposit.
4. Employers. When you're applying for a job, potential employers can pull your credit reports as long as they notify you first. And, in fact, about a third of them do, according to the Society for Human Resource Management. Why? Bad credit can be a signal of irresponsibility, or employers might be worried you'll spend more time fretting about your financial woes than concentrating on the job.
5. Cellphone carriers. Even cell phone service providers may check your credit before signing you up for a plan. They want to make sure you're responsible and will pay your bill each month. Some utility providers may pull your reports as well. If you have credit issues, you may not qualify for the best plan rates, you could be required to pay a deposit, or you could get turned down.
True cost of your scores
So, how much do your credit scores affect your finances? Say you have two friends, Jim and Mark. Both took steps right out of college to start building a credit report by getting their first credit cards and an auto loan. Jim made all his payments on time, never maxed out his credit cards and often paid more than the minimum required. Mark, however, frequently paid late, overextended his cards and applied for new credit to bail him out of his mismanaged debts.
VIDEO ON MSN MONEY
Credit cards and credit scores are just a way for banks to get into your pockets. Higher fees, higher interest rates.
don't need them, don't use them. If I don't have cash I don't buy it.
No one or No company should be able to check your bank account or how you're spending your money without your permission. The permission should be just a few short words. Either Yes they can or NO they can not. Their also should be NO recourse if you decide on not having anyone authorized to peek in on your account.. Their should be no credit reporting agency or they need to change the way they do business. Hardship cases of slow or poor pay should be wiped off the books every 6 months. A heavy fine against the agency for not doing so could result. The credit agencies are costing the people too much extra money by their methods of points.
Has any one ever wonder why the credit score only has one company controlling it when every them in this country has competition except the credit from fair issac, these people will sue anyone who tries to bring in a different of opinion an win everytime, is it possible , that they are controlling all our lives, yes they are. I think this issue should become a bigger issues because we can not get a second opinion about score or why FAIR ISSAC. dominates this country credit something that should be important to every one, if anyone has an answer for me about this please let me know after you have done your research to determine that this statement is a TRUE FACT.
BOTTOM LINE UP FRONT: The Bureaus are NOT part of America’s financial SOLUTION, in fact they are part of the PROBLEM. If this Fair Isaac was truly a benefit for our Nation then they shouldn’t have fallen asleep at the Wheel and allowed the millions of Americans to buy homes they could not afford. If I were King for a Day, I would boot this Fair Isaac and the three Bureaus it influences out of the universe as they are rapidly destroying America. I find it unacceptable that an individual's Credit Bureau information is being used by Insurance Companies; employers; etc., to make decisions that have huge impacts on people's livelihoods. I find it unacceptable due to the fact that Fair Isaac and the three Bureaus are using “voodoo mathematics” to arrive at FICO scores that vary among Bureaus??? I find it alarming that we have allowed Fair Isaac and the three Credit Bureaus to have such power over the American People. It’s time we go “back to the future” when our Banker knew our name and assessed our worthiness and character in person with a handshake, rather than by some automated report compiled by an algorithm from hell. The Irony here is clear, if Fair Isaac has to tell us that they are “FAIR” then we can “bank and trust” that they AREN’T!
Yes, here is the real problem, THEY (who are they?) never take into account what you/I have in assets (NEVER) (Home, properties, Banks, retirement, equity, (paid off cars or bought cash)and that is to me from Northern EU a strange problem (we have far more security and rights on this, and companies are not allowed to enter anything ever, only "official entries" allowed). I may here have as a regular person assets of 100,000- 1,000,000 (about 50 % of us), where does that show on our """credit report"""????, I mean if someone really wants to know your habits, that would be the only way!!. So how come the same government is not out there protecting us from this kind of harassment by companies (IN SECRET) generated "FILES ON ME USING MY PERSONAL SS #, MOSTLY WITHOUT MY KNOWLEDGE? Just where are our protections, and our rights? I have many items on my "file" that has nothing to do with what really happened, like 7 addresses generated by "someone" over the years, that someone I can not find, but that is not good for stability (I have not moved for 29 Years)--HARASSMENT, PURE AND SIMPLE!--And why do I have to pay someone to check this all the time???
Even worse, "free credit report.com" charges me 17 Dollars a month for me to look at my own "credit". Now why do I not get a notice in the mail when anyone checks my stuff?????EVERY TIME? I mean so I can nib the ID theft in the butt right from the start?(since I even pay them???) and why do I not get a check from them, so they can charge the potential vendors, before my business, instead of me supporting my own demise???----Let us get that FREEDOM here you are all talking about,---- we do not have it compared to the rest of the west at all, but they all do keep you humming the same tune--but wait another 10 years we will no longer be number 10 but more likely number 20-30 in the world, and then we will proly start have spurts like Madison, but far worse!!! Sorry-- but!--get real!!
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
RECENT ARTICLES ON CREDIT SCORES
CardRatings.com's annual survey of people's credit-worthiness show that residents of states that were least affected by the recession are faring the best still.