4 Ways Your Credit History Can Affect Everyday Life

You already know your credit scores matter when you apply for a credit card, make a major purchase like a home or car, or apply
for a loan. But did you know your credit history can impact your application for an apartment or a job? 
Here are four ways your credit history and credit scores can play a role in everyday life.

 

1. When You're Renting a Home or Apartment

Depending on the apartment or leasing company, credit report and credit score checks may be part of the rental application process. Like any potential lender or creditor, landlords and leasing companies want to know: What is the likelihood that you will honor your financial commitments? They might look at your credit history to find out if you have a history of missed payments or have delinquent accounts. 

If your credit application is rejected because of information on your credit reports, the lender or creditor (including a landlord or leasing company) is required to tell you the reason your application was denied through what is called an adverse action notice. This notice includes the name and contact information of the credit bureau that furnished the credit report. If you receive an adverse action notice, you are entitled to a free copy of your credit report from that credit bureau. 

But there’s also good news: On-time rental payments might be reflected on your credit reports. Landlords or leasing companies aren’t required to report to the three nationwide credit bureaus (Equifax, Experian, and TransUnion), but some do. You can ask your landlord or leasing company if they do.

As always, monitor your credit reports to make sure that accurate and complete information is being reported. You’re entitled to a free copy of your credit report every 12 months from each of the three nationwide credit bureaus. To do so, visit: annualcreditreport.com.

Credit checks by prospective landlords or leasing companies might be hard inquiries, which can impact your credit score, or soft inquiries, which do not impact your score. You can ask what type of inquiry will be used.

2. When You Apply for Mobile Phone or Utility Services

Like other creditors, utility companies and mobile phone providers may check your credit reports to review your history. A history of late payments or other negative information might mean you’ll need to pay a larger deposit, or your application might be denied. The company may also ask you to provide proof of income or a letter of guarantee from someone who can pay your bill if you do not.

There is also a consumer reporting company called the National Consumer Telecom & Utilities Exchange (NCTUE). The NCTUE maintains data including payment and account histories as reported by telecommunications and utility companies and some paid TV providers. Your payment history may be maintained by the NCTUE even if it’s not reported to the three nationwide credit bureaus. Some utilities and mobile phone companies may check your NCTUE report.

3.  When You're Making Utility or Mobile Phone Payments

Most utilities and mobile phone companies don’t report to the three nationwide credit bureaus. But if your account isn't paid as agreed and turned over to a collection agency, it may be reported as a collection account, and your credit scores may be impacted.

4.  When You're Applying for a Job

Federal law allows both current and potential employers to view your credit reports when they are considering you for a new job—or even a promotion. Although not all employers check credit, some industries such as financial services or healthcare might because of the sensitive information their employees can access.

If a prospective or current employer plans on checking your credit reports, they must first get written permission from you. This could be in the form of paperwork you sign when you apply for or first start your job.

Employers and prospective employers must let you know if you do not receive a job or promotion because of information in your credit reports and must provide you with the name and contact information of the credit bureau furnishing the report.

For more consumer credit resources, visit equifax.com/personal/education.

Submitted by Kirsten M. Elkins, Customer Relations and Communication Executive at Confluent Strategies/Equifax. 

Follow @FirstCNB on Facebook, Instagram, LinkedIn and X for Smart Women updates.

Have a question or a topic you’d like us to cover? E-mail us at SmartWomen@FirstCNB.com!