Your credit report and score can be used in more ways than you might think. Most often, banks and lenders will review your credit history anytime you apply for credit to help them make a decision about whether to loan you money, how much to loan you, and what interest rate to charge you. This might be for a new credit card, a mortgage, an auto loan, or a student loan.
Your credit history is used in marketing
Another way banks use your credit report and score is to try to sell you new financial products. Unless you tell them not to by opting-out, the credit bureaus will sell your credit information to banks who will use it to mail you or call you with financial offers. (That’s why you get so much credit card junk mail!)
Your credit history is used by insurance companies and landlords
Most landlords will check the credit of any potential tenant–so your credit score matters even if you don’t plan to get a mortgage! Insurance companies also may look at your credit history to determine whether to issue you auto, home, or other insurance and how much of a premium to charge you.
Your credit history may be used by your employer
Although controversial, some employers will check your credit before offering you a job. Usually, they have to get your permission first. It is possible that you could be denied a job for having lousy credit. Typically this would only happen though if the position you applied for deals with financial accounts or sensitive information.
Credit 101
We’ve broken down the essentials of credit and how it works into a few easy articles. Take five minutes to learn everything you need to know about this powerful financial tool: your credit.
- What is a credit score and credit report?
- How is my credit score and credit report used?
- How do I get good credit?
- Why do I have bad credit?
- What credit score do I need for a new credit card?
- How do I know what my credit score?
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