Who Can Check My Credit Score

Just who can check my credit score? If you've wondered that, you are not alone. What is disturbing to a lot of people is how many different industries use credit scores to make business decisions.

For years, creditors have used credit-scoring systems to determine whether individuals are a good risk for mortgages, credit cards, and loans. But, did you know that other businesses also check your credit score when deciding to work with you or not?

The use of credit scores has grown over the years because it gives businesses an objective way to measure the credit risk of potential clients. Generally, the higher a persons credit score is, the more likely they are to meet their financial obligations. This means less risk for the business.

Which businesses can check my credit score?

Businesses or individuals with a "legitimate business purpose" can access your credit report and score to determine whether to do business with you or not. Below are some of the various types of businesses that commonly access credit scores:

  1. Lending Institutions: Credit scores and bank lending go hand in hand. Banks and mortgage companies routinely evaluate credit scores to help minimize default rates. There is a direct correlation between credit scores and interest rates, with the highest credit scores getting the most favorable terms. For more information, see Credit Score and Mortgage Issues When Buying a Home.

  2. Credit Card Companies: Your credit score can be a factor in whether of not you'll be offered a credit card. It can also be used to determine whether to bump up credit limits on existing accounts.

  3. Auto Companies: Usually, credit scores are needed to obtain an auto lease or purchase a car, and help determine what interest rate or lease factors will apply. Generally, scores above 700 will get you the best deal, while those below 680 are considered sub-prime (which equates to less favorable terms). Even though each dealership varies on their limits, if your score is below 550, you can probably forget about getting an auto loan or lease.

  4. Utilities and Phone Services: Some utility companies have begun reviewing credit reports and scores before hooking up services. They rationalize that this information can help predict whether customers will pay their future bills. People with low scores may find it difficult to get service, and if they do get service, often pay a higher deposit than someone with a high score.

  5. Employers: Current and potential employers can also run an employment credit check to see how you manage your financial obligations. The basic assumption is that a high score correlates with high personal integrity. It's important to note that employers must obtain written permission before they can request a credit report or score on an individual.

  6. Insurance Companies: The reason why insurance companies use credit scores is that it can predict the likelihood of someone filing a claim. Motor vehicle records and past insurance claims, in addition to credit scores, are used to formulate an insurance risk score. This risk score is used when deciding whether to offer or continue coverage, as well as determine the premium amounts that will be charged.

  7. Landlords: It is becoming more common for landlords to run tenant credit checks when making leasing decisions. Since housing is such a major expense, a proven track record of paying past obligations is a good indicator of whether the rent will be paid in a timely manner or not. The lower a persons score, the higher the risk a landlord faces of non-payment of rent.

Is it a good idea to check my credit score?

If you are considering getting a loan, applying for a job, or any other substantial changes in your life, then you should see what your credit score says about you. Since your score is a fluid number that changes over time, knowing where you stand will give you the opportunity to build up your score before any major decisions are made.

Why do lenders see different credit scores?

Because credit scores can be accessed through various companies, credit scores may differ depending on which credit bureau calculated the score. Also, some companies base their decisions on only one credit score, while others will look at all three credit scores.

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To help you further your understanding, the next article discusses how credit scores are calculated.

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