Your credit rating is one of the most important tools in your personal arsenal, which may be used more often than you realize.
For example, did you know that employers may perform a credit background check as well as a criminal background check before they make you an offer of employment? Read that little paragraph with the fine print before you sign that job application where you will surely find this condition of employment. Employment requiring a security clearance usually requires a positive credit rating and a drop in this rating could result in a loss of this clearance, thus a loss of employment.
Auto insurance companies quietly look at your credit rating every month and if they discover your credit score has substantially dropped, they may consider you a higher risk and raise your insurance premium. Applying for any type of credit will also result in that creditor verifying your credit worthiness.
To guarantee your best credit profile is being displayed, take an active role in managing your credit and get a free copy of your report. You can call 877-322-8228, or go to www.annualcreditreport.com where you are entitled to one free copy of your credit report from the three credit reporting agencies — TransUnion, Equifax and Experian — every 12 months.
This means you can get all three reports at once, or you could consider getting one free one every four months. I recommend the latter approach to guarantee the reported information is correct and make sure you are not a victim of identity theft. Incorrect information should be immediately disputed with that credit reporting agency. Remember the information shown on your report is used to create your credit score, consequently a faulty report could reflect a low score.
Jason Athas is with Debt Management Credit Counseling Corp, a 501(c)(3) nonprofit organization committed to educating consumers on financial issues and providing personal assistance to consumers overextended with debt. They provide free budget counseling, educational materials and programs and can be reached at 866-724-3328 or www.dmcconline.org.
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