Most of us realize that our credit
report is reviewed when we apply for a credit card, mortgage, or car loan.
However, it is often forgotten that your credit report is also reviewed when
you apply for utility services, car insurance, life insurance, or a cell phone.
With bad credit, you will be required to leave large deposits with utility
companies. Landlords often use credit reports to decide among rental
applicants. A potential employer may even assess an applicant’s credit report
before extending a job offer. Your personal credit score is often used when a
creditor is deciding whether or not to extend your business credit.
These creditors will also report to
the credit bureaus if you do not pay your bill on time. If you decide to change
your cell phone company, cable tv provider, internet provider, change your
insurance company, or move to a new apartment, make sure you pay your final
bill in full. An unpaid bill will most likely get you a COLLECTION ACCOUNT ON
YOUR CREDIT REPORT. Imagine what that looks like to a potential employer or to
a lender. That’s why it is so important to remember the rules of the game. Even
the small forgotten accounts (like unpaid electric bills) are considered fouls
that can get you a penalty, and keep you from scoring!
As a side note on insurance...Most
people are shocked when they hear that auto insurers use credit scores in the
course of deciding whether to cover drivers and what premium they should be
charged.
Why should you have to pay a higher
rate for your car insurance because you had unpaid bills or some other
financial problems? Some customers who had never had an accident or violation
were faced with sharply raised premiums when their renewal notices arrived. In
fact, auto insurers are passionate in their belief that credit scores are one
of the best predictors of future claims. Statistics also show that most insurance fraud stems from individuals with credit/money problems. According to the American Insurance
Association, here are some of the kinds of data from credit reports that are of
most interest to insurers
1. Amount of outstanding debt
2. Payment history (any late
payments?)
3. Bankruptcies
4. Collections
5. Credit history
6. New applications for credit
(number of inquiries on your reports)
Offensive Tip: Remember it is a
smart play to notify all creditors if you move. Make sure your creditors always
have your most recent address so that you'll receive your billing statements
promptly. Also fill out a change of address form at the post office. This will
ensure you get your mail forwarded even if some of your creditors didn’t get
your new address changed correctly. This also includes temporary address
changes or PO Boxes.
Expert Credit
Consultants, LLC specializes in establishing business credit and funding using
the exclusive Business Credit and Finance Suite as well as credit restoration
and optimization. www.ExpertCreditConsultants.com.
