How Does My Credit Report Affect Me

Anytime you apply for credit in the United States of America, a mortgage, or for certain jobs, your credit report and score will be checked. If you ask yourself ‘how does my credit report affect me?’ you should understand that almost every day you use some form of credit and these transactions are being recorded. There are three large credit reporting agencies in the United States. Equifax, Experian, and Trans Union are the companies that sell your information to lenders who want to know if they can trust you with a line of credit. When you apply for an apartment rental, a government job, or you want to get mortgage, incidents from your past that seemed small at the time might come back to haunt you in the form of a credit score that is too low or as something that might set off alarms for whoever asked to see the report.

When you ask “how does my credit report affect me?” you should understand that certain things on your report can trigger an alarm besides just having a low credit score. Whenever you apply for credit the lender will ask for the report and ask you for information to find out what is going on with your credit history. One of the things that might affect your credit report is certain types of inquiries. Pre-approved credit offers, your request to see your report, and employment screenings will not affect your credit history. Inquiries that will affect your credit report are those that include mortgages, car loans, or bank loans. These will ‘pull’ your credit report, and for each pull your score can dip roughly 5 points. One or two inquiries are not enough to really affect your score, but it can still hurt especially if you try to get several loans at one time. If you rate shop when looking for the best deal for something like a car loan however, then as long as all of the inquires occur within 30 days this will
not affect your credit score the same way.

Something as serious as an eviction will appear on your credit score as well. Getting evicted is most often the end result of a fairly long financial and legal battle. The eviction is, in fact, a ‘no win’ situation for both the renter and the landlord but the judgment will appear on your credit negatively. Rent is thought of legally as a sort of short term ‘month to month’ type or credit that needs to be paid in a timely manner. An eviction therefore is a form of repossession of property for the nonpayment of a loan. This will be damaging when you are looking for an apartment. Landlords screen reports showing this type of history. It can also cause trouble when you are applying for utility service.

Besides checking your report carefully for mistakes, you should also look for ways to raise your score to mitigate as much as possible the negatives on your report.