ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

How Important is Your Credit Score?

Updated on January 9, 2018
tamarawilhite profile image

Tamara Wilhite is a technical writer, industrial engineer, mother of two, and published sci-fi and horror author.

Introduction

Building credit is mostly a matter of paying bills on time and not going deep into debt. Many of the lenders that promote debt do so because they make money from it, in the form of interest and fees. Don't spend more money that you don't have in the mistaken belief that it is necessary for your financial future, much less in other areas of your life.

A credit score score can affect your ability to get a loan, and in some cases, a job. However, it will not build your net worth.
A credit score score can affect your ability to get a loan, and in some cases, a job. However, it will not build your net worth. | Source

Getting New Credit

One of the times your credit score is critical is when you are applying for new credit. Your credit score will determine the credit card rates offered when you apply for a credit card, the interest rate you are charged on a new mortgage and the car loan rates for which you are eligible. Your credit score can even affect the interest rate on your current credit cards and other variable rate debt, with the interest rates going up if your credit score goes down.

Credit Scores and Insurance

Many insurers are using your credit score to determine your risk as a client. There is a rough correlation between low credit scores and increased insurance claims, though this correlation is far weaker than someone's prior claims history or driving record.

If you were turned down as a customer for insurance due to your credit score, look for an insurance broker who can find insurers who don't care about your credit score or will perform manual underwriting. Manual underwriting is the process of someone looking at your claims history, personal finances and general records and deciding to offer you an insurance policy.

Many companies switched to using credit scores as a filtering mechanism for potential clients because it is fast and easy, though it is not necessarily fair. Some employers are using new forms of vetting such as looking at bill payment history instead of one's credit score, because Hispanics and blacks have lower average credit scores than Caucasians.

Credit and Employment

Credit and employment are related, but you do not have to have a perfect credit score to get most jobs. Your credit score is only considered relevant to a job if the position involves handling significant amounts of cash, involves highly sensitive information that could be sold for money or a fiduciary position in which you would be responsible for financial records.


For example, applicants seeking to be bank teller or assistant restaurant manager who handles cash at the end of the shift can have their credit scores checked under all state laws. The military and defense contractors can also run your credit report. However, many states limit the ability of businesses to check your credit score for positions that do not involve money, fiduciary trust or highly sensitive information.

A credit check by employers is not allowed without your permission in writing. If you are denied the job due to your credit score, they must state such in writing and tell you why you were refused.

Employers such as the military and federal government do run credit checks and verify credit history before hiring anyone handling sensitive information, whether it is tax records or military information.
Employers such as the military and federal government do run credit checks and verify credit history before hiring anyone handling sensitive information, whether it is tax records or military information. | Source

Promotions, Security Clearance Updates and Job Transfers

Businesses can run your credit report and check your credit score if you are seeking a position that is sensitive. Businesses can also run your credit score or pull your whole credit report as part of the security clearance update process.


For those with a Top Secret clearance, this happens every five years, whereas it happens every ten years for those with a Secret clearance. These credit checks are part of the background check process, and you must pass this background check to continue in your current position. You must have a background check and credit report run if you apply for a higher security clearance.


Businesses can run your credit report if you are applying for a higher position, such as a stock clerk applying for a cashiering job or a telemarketer for a bank applying for a loan officer's position. Transferring to a more secure site can also trigger a security background check. For example, if you work for a defense contractor and are moving from an office building with your employer to a job on base, the military can run your credit report as part of their reviews before they grant you access to site. Credit and employment are closely related if the job involves handling money or sensitive information.

Comments

Submit a Comment
  • tamarawilhite profile imageAUTHOR

    Tamara Wilhite 

    3 years ago from Fort Worth, Texas

    Brenda Barnes I understand how jobs seeking to screen for personal financial stress use the credit score for vetting, but far too many companies use it as a yes/no criteria when it isn't relevant.

  • Hyphenbird profile image

    Brenda Barnes 

    8 years ago from America-Broken But Still Beautiful

    I know certain employers require a high credit score. When one works with money, one should be financially responsible. The whole credit score computation is crazy though. Mine dipped about 200 points when I paid off my car. It was my only line of credit. I don't even know what is is now but since I am not going into debt I really do not care. For the average American though the credit score is vital. Thanks for the great information.

working

This website uses cookies

As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://corp.maven.io/privacy-policy

Show Details
Necessary
HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
LoginThis is necessary to sign in to the HubPages Service.
Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
AkismetThis is used to detect comment spam. (Privacy Policy)
HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
Features
Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
MavenThis supports the Maven widget and search functionality. (Privacy Policy)
Marketing
Google AdSenseThis is an ad network. (Privacy Policy)
Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
Index ExchangeThis is an ad network. (Privacy Policy)
SovrnThis is an ad network. (Privacy Policy)
Facebook AdsThis is an ad network. (Privacy Policy)
Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
AppNexusThis is an ad network. (Privacy Policy)
OpenxThis is an ad network. (Privacy Policy)
Rubicon ProjectThis is an ad network. (Privacy Policy)
TripleLiftThis is an ad network. (Privacy Policy)
Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
Statistics
Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)
ClickscoThis is a data management platform studying reader behavior (Privacy Policy)