What Are Credit Checks Used For?

If you’ve ever dealt with money in any capacity, then it’s likely that you have a pretty good idea as to what your credit score is. The credit score is a huge deal and you want to be certain that you have a good one – but why? 

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Who is going to do a credit check? Why does it matter that your credit score is at a certain level? Here’s a quick look at some of the ways in which a credit score may be used for or against you. 

Loans

Loans are one of the most common things that you’ll get checked out for in relation to your credit score. More often than not, you will need to go through a fairly thorough credit check in order to ensure that you are going to be able to use the loan properly and that you can pay it back. 

Now, credit isn’t always the determining factor as to whether or not a company is going to give you a loan. This page at LetMeBank and other similar pages on the web have a lot of valuable resources that can provide you with a good loan without worrying you about any sort of credit check in order to get it.  

Opening Bank Accounts

While some banks don’t really care about your credit score when you go to open an account, others definitely do. This is especially true in cases where you are looking to get a high-interest account, or other specialized account that you may need a better credit history to be trusted with. 

The bank should let you know pretty early on as to whether or not your credit score will matter. 

Obtaining Jobs

It sounds strange, but some jobs are going to be checking your credit report. Employers actually only get a handful of details about your credit history, and not your full report or credit score.  This helps to protect you and not allow your potential employer to hold info that may allow them to discriminate against you.

What they do see, however, are things that may indicate that you have been involved in some sort of theft or fraud. If you’re applying for a job that is going to have you working with a lot of money or inventory, then your employer wants to be certain that you are someone that they can trust with it. They want to feel good about leaving you in charge and that they don’t need to worry about leaving you unsupervised, if the situation arises. 

Getting a Credit Card

Like loans, credit card companies are also going to take a pretty long, hard look at your credit history in order to see what it is that they can entrust you with. In many cases, credit card companies won’t even give you a second glance if your score is under a certain amount. 

Some credit cards are designed for people who have poor credit scores, but those will often make you have some sort of deposit associated with them. This is so that they can protect themselves and, if you don’t make a payment, they can use that money to make those payments for you instead. On top of that, your monthly interest is also going to be much higher, which can put you in a worse situation if you aren’t careful. 

Getting an Apartment

If you’re looking to get an apartment, your landlord is going to want to do some sort of credit check on you. They will want to take a good look at everything that you’ve done in the past in order to make sure that you are going to be able to make proper payments. 

Most landlords don’t want to take a risk, but you can often work things out with them if you have a reason for your credit score being so low. On top of that, some landlords will disregard credit reports entirely if you make above a certain amount of money – they trust that you’ll pay because you have enough month to month.  

Looking at what you have available and working out the best options for your situation is not a simple thing. You want to be sure that you have good credit, and work out exactly what you need so that you can stay ahead of issues before they come up. See what you can learn, find ways to make the process simpler, and get the resources you need.