You might think that your credit rating is important only with credit cards, mortgages or loans- next. On the contrary, this is not the case. In fact, your credit history can determine the available options available to you such as your job and where you live (with your living conditions).
What affects my credit rating?
In order to avoid a bad credit score, it is imperative to know which factors influence the calculation of your credit score and how your lifestyle affects it as well.
Payment history 35%
A history of late or missed payments will significantly affect your credit rating in a negative way.
Having a large number of debts each month will also negatively affect your rating as well as your financial health in general.
Duration of your credit history 15%
Your financial health is assessed over time. So, to have a good credit rating, it is important that you have open and active credit accounts for a good period of time.
New requests 10%
Making too many credit requests over a short period of time will also have a negative impact on your credit rating. This could give the impression that you have been denied credit several times.
What information is included in my credit report?
Your credit report will contain some basic information such as your name, address, social insurance number, as well as a list of your current and past employers. However, it will also contain information on all your credit and transaction accounts, cell phone and internet accounts, public and legal accounts, and credit applications. Credit card companies and loan officers may not be the only ones to look at your credit rating during an assessment. Unfortunately, many people realize too late the importance of their credit report. Even with the best of intentions, your credit history could be evaluated. Credit records are part of background checks, even when you apply for volunteer jobs. Here are some examples where your credit history can be very important.
Apply for a new job
A company that hires a manager can very well take a look at your credit history. This can be used as a reflection of your personality, especially regarding your reliability and security. A credit check by an employer is different from that of a credit card company. Your employer will first need your written consent to be able to see your credit rating. You should also know that your credit file contains a lot of other data, to provide potential employers with a wealth of information. Financial data is also valuable to employers if you are applying for a job that involves money or if you need a security clearance.
Depending on the province, some insurance companies may review your credit history before giving you an estimate. They can thus verify the chances that you make your payments on time.
Installation of public services
Although heating, water, electricity, and internet are considered necessities, the companies that provide these resources want to make sure that they will be paid. If you have a bad credit, the company may ask you to pay a deposit to protect against losses. After making a number of payments on time, you will get your deposit back.
Buying a phone
Having an iPhone or other smartphone is considered the norm these days. However, we sometimes forget how much these phones actually cost. Your payment options for a cell phone may depend on your credit rating. Just like with utilities, starting with a cell phone package may require a deposit if your credit does not meet the requirements.
Be eligible for housing
Whether you’re paying a mortgage or just renting a house, your credit history is very important. People tend to overlook the fact that a credit check is commonplace in the process of selecting a tenant. Finding an affordable and enjoyable place to live is difficult, it will be even more difficult if you have a bad credit history.
Rebuilding a credit history
If past financial mistakes or more difficult financial times have tainted your credit, there are now several things to do that can help you rebuild good credit while waiting for your past problems to disappear from your record. It is also important to know that sometimes inaccurate information can lead to bad credit. You should closely monitor your credit reports for any inaccuracies or identity theft. Even simple mistakes such as a bad address or a misspelled name can cause problems to your credit. Make sure you regularly review your reports for accurate information to avoid future puzzles.