Lauren Smith, WalletHub Staff Writer
@laurenellesmith
A credit report is important because lenders, creditors, landlords, employers, utility companies and other businesses use it to determine your ability to repay debt, which is an indicator of your overall trustworthiness. Your credit report is also used to calculate your credit score, which affects your ability to borrow and the cost of doing so.
Reasons Why a Credit Report Is Important
- Determines borrowing costs: Borrowers with a strong credit profile get lower interest rates, which can save them thousands of dollars over time.
- Impacts access to credit card perks: Credit card companies offer higher limits as well as better rewards and other perks to applicants with good credit. The best credit card offers overall typically require good credit or better.
- Affects the cost of goods and services: Many companies – like utilities, cell phone service providers and insurers – base the cost of service, deposits or premiums on a consumer’s credit history.
- Influences hiring decisions: It’s common for prospective employers to review an applicant’s credit report, especially for positions involving sensitive customer data or handling money. Poor credit history may signal that a person will commit theft or fraud.
- Affects landlord approval: Landlords use credit reports to help assess whether you will pay rent.
You can check your credit report and also access personalized tips on how to improve your credit for free here at WalletHub.
People also ask
Why should I check my credit report?
First, you can avail one annual credit report from each of the three major credit bureaus free. Your credit report sums up your entire credit details, which makes it an important part of your financial life. Here are some reasons to check it on a regular basis:
- Identify any financial mistakes: Checking the credit report will allow you to identify any reporting mistake made by the bureaus. It is not uncommon to find discrepancies...
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