Of all the things we do in our day to day financial dealings, how we handle our credit has the deepest impact on our financial lives.
Good, bad and ugly credit will affect many aspects of our financial health that are driven by that all powerful "Credit Score". Some effects are obvious and some are not so well known to the general public.
This blog is an attempt to shine the light on some of those effects. It will not be an all inclusive list, but will touch on some of what I consider to be important issues.
- Interest rates paid on loans: This is one of the more obvious results. Interest rates on home loans, car loans, boat loans, credit cards and other loan rates are affected by your credit score.
- Insurance rates paid: Your car insurance rate, homeowners insurance rate and and other insurance rates are affected by your credit score.
- Rental rates / terms: Home rentals, apartment rentals, commercial space rentals and other rentals are affected by your credit score.
- Job search: Employers are running credit reports on prospective employees more and more. Having bad or ugly credit can actually stop you from getting a job.
The first step to getting control of your credit is to be able to effectively monitor it on an on going basis. There are lots of subscription services out there, where you pay a monthly or annual fee to monitor your credit.
But why pay for something, when you can get it for free?
Below is a link where you can get your credit report free once a year from each of the three main credit reporting agencies (Experian, Equifax & TransUnion). So you can actually get 3 reports total each year! They may try to sell you extra services, but you don't have to buy and they are each required by law, to give you one free report per year upon your request. My suggestion is to run your report once every 4 months. Just rotate through the agencies each time you run it.
Some people will find errors on their reports that negatively affect their credit scores. Address these issues immediately, it will help raise your score.
Others will not only find errors, but outright identity theft in progress! Alert all three credit reporting agencies and the police of the situation immediately! There could be terrible consequences coming from the identity theft that can be avoided with quick action.