When it comes to credit scores (and the stress you might have about trying to boost them), most people usually only care if they’re about to begin the home-buying journey. After all, a good credit score is a key factor in securing the best possible interest rate on a home mortgage, or on any loan product for that matter.
However, potential homebuyers aren’t the only ones who should keep tabs on and work toward improving their credit scores. There are plenty of lesser-discussed times in life for which credit scores can have a big effect.
Your best bet is to stay on top of your credit standing. Start by requesting a free credit report each year from all three credit bureaus (Experian, Equifax, and Transunion). You can access each company individually or through Annual Credit Report. Then, get your credit score for free using Credit Sesame. Beyond revealing that all-important number, Credit Sesame also offers free credit monitoring and alerts so you can stay on top of any score fluctuations.
Take a look at some of the surprising situation in which your credit score can be used against you, or better yet, work in your favor to give you a competitive edge:
Renting an apartment. Landlords take a big risk when they hand over the keys to a new tenant, which is why more and more of them are checking out potential renters’ credit worthiness first. A strong credit score can be the deciding factor between multiple candidates for an apartment, or it can send up a red flag that you’re not financially responsible, and put you back on the apartment hunt.
Looking for a job. Although financial institutions don’t check your credit score, they do run credit report checks on job applicants. Employers in other industries are catching on to this screening method. That’s because credit standing can be seen as an indicator as to whether someone makes smart financial decisions. If someone’s credit history is abysmal or if they have outstanding collections, it can signal that they might be financially vulnerable, or even desperate. That will not bode well if you’re going for a position in which you’ll have access to cash, valuable items, or personal financial data.
Tapping into your home equity. Remember, just because you own a home doesn’t mean your credit score monitoring days are over. As the past couple of years have proven, lower interest rates might encourage homeowners to refinance or take out home equity lines of credit, both of which require the lender to make sure your credit score is up to par. If you can’t meet the minimum score requirements, you could miss out on saving thousands of dollars over time.
Paying for insurance. You might not realize it, but not everyone pays the same for insurance products including home, auto or specialized policies. While you can buy different levels of coverage, insurers will check your credit score and offer a lower rate to customers who are in the top tier than they would to someone who might have a subprime score. Their logic is that someone with a lower score is more likely to file a bigger claim.
Qualifying for a payment plan. If you’ve ever gone smartphone shopping, or wanted to buy a high-priced electronics item or furniture, you’ve probably seen options to make monthly payments (usually with a no interest for a short period of time). But guess what? You usually need a respectable credit score to qualify since the merchant wants to feel confident that you’ll make good on your payments.
As you can see, credit scores can affect many different aspects of your financial life. Stay on top of them utilizing a free service such as Credit Sesame, so that you can always put your best financial foot forward.
This post was created with support from Credit Sesame in partnership with Kasai Media.