Who Might Check My Credit Score?
You might be surprised at who can check your credit report. Some of these businesses are obvious like credit card companies and mortgage lenders. However, many other types of businesses and individuals may check your credit report and your FICO credit score.
Anytime you apply for credit with a company, your credit score is checked. Extending credit to you includes obvious things like loaning you money, whether it is a bank loan, or department store credit card or a utility company. Frequently companies are looking for a minimum FICO credit score for which they will consider giving you credit.
Your credit score might be periodically checked by your existing creditors in order to adjust your interest rate and credit limit. If you notice that your interest rate or credit limit suddenly changes, it can frequently be attributed to a change in your credit score. You should always call your credit card company to find out exactly why the change occured. A sudden change in your credit card interest rate could be the first sign of an error in your credit report, and should be investigated immediately.
Applying for an auto loan also results in a credit score check. Again, this is so that the lender can make a decision whether or not to loan you money. Your credit score is used to set the interest rate for your loan. A better credit score usually means that you can qualify for a lower interest rate.
Mortgage lenders also use your credit score to determine your eligibility and interest rate for a home loan. It is worthwhile if you are thinking of buying your first home, to check your own credit report and score and start putting into practice anything you need to do in order to improve your credit score. In the long run, this will save you money in the form of lower interest rates.
Lenders of private and some federal student loans will use your credit score as a determining factor for granting you the loan. Should you choose to consolidate your private student loans after graduating college, your credit score will again be used to decide your eligibility for the consolidation loan.
Aside from the obvious creditors discussed above, there are some other, less obvious companies that may check your credit.
A utility company with which you have never had service, may check your credit score in order to decide whether or not you have to pay a security deposit. This includes utility companies such as power, water, and even cable. Cellular phone companies use the credit score for a similar reason. The reasoning is that you are being extended one month of utility service so the company needs to establish your risk of nonpayment.
Landlords also frequently run a credit report so that they know that you won’t skip out on the rent. When it comes to renting, a weak credit score can cause you to pay higher deposits and occasionally even be denied for the apartment.
It's clear that a good credit score can improve many aspects of your daily financial life, so start building a good credit history today.1