I came across this article yesterday by Kiplinger’s Personal Finance Magazine featured at MSN Money. According to the article there are 5 people who may be checking your credit history – lenders, insurers, employers, landlords, and cell phone carriers.
The fact that lenders would be looking into credit scores came as no surprise. I always knew that when we applied for a loan when purchasing our home that lenders looked at our credit scores, and our excellent credit score allowed us to get the lowest rate possible. It makes sense, too, because a lender would want to see a history of timely payments made in the past as a type of assurance that they will receive their money back. Other potential lenders who will check your credit reports include those for auto loans, student loans, and credit cards.
Insurers are also looking at credit information. We insure our home and our car with the same insurance company. Our credit score is part of the “insurance risk” score and because our credit score is high, we receive the best rate on our auto and home insurance.
I can understand why landlords would want information about a credit score. If you are looking to rent an apartment or home, the owner wants to see some type of indication that they will receive rent payments on a timely basis. Utility companies will also request credit information and can require higher deposits based on your credit score.
News to me was that some employers are looking at credit scores. From what I’ve read, some employers look at credit scores out of concern that a person with credit problems could be preoccupied at work. But a credit score is based on events that happened in the past. Should a person continually be penalized for poor choices or for events out of their control (i.e. medical expenses) that happened in prior years?
Lastly, I have no idea why a cell phone carrier would want to know your credit score other than to charge you a higher rate (i.e. larger deposit or higher service fees) if you have a lower score.
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When I bought my cellphone from Alltel, they told me the credit check was to see how many phone # they could give me. I would think there would be more too it than that.
There is a phone number you can use 1-888-5-optout which stops quite a bit of the looks at your credit.
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