One of the most important things you can do for your personal finances is to pay attention to your credit. Indeed, your credit is becoming increasingly important to the way that financial service providers make decisions about you. Plus, keeping an eye on your credit might be even more important in the future -- and it can help you keep tabs on your personal information and identify identity fraud. Make sure you check your credit report regularly; you can even get a free credit report by mail here in Canada, just for asking.
Keep Yourself Attractive to Financial Service Providers
If you want a home loan, or an auto loan, your credit will be checked. Even if you are approved, you won't get the best terms unless you have good credit. Even the best Canadian credit cards require that you have good credit in order to be approved.
In the U.S., there is a trend toward using credit information when making decisions about hiring, insurance premiums and more. This is something to keep in mind for the future. If you want to save money in interest charges, and if you are interested in maintaining a good financial reputation for other purposes, you should consider paying attention to your credit, and doing what you can to keep it positive.
As soon as you land your first job, you should think about doing what you can do to start building a good credit history so that you are prepared for your financial futures.
Catch Identity Fraud
You also want to be able to catch identity fraud. One of the fastest growing crimes is identity fraud, and you could become a victim. You want to keep an eye on your credit, checking regularly to make sure that you information is accurate. In some cases, inaccuracies could simply be errors. However, in other cases, such errors could actually indicate identity fraud.
If you notice a new loan in your name -- one that you did not apply for -- it could be a very real indication that your identity has been stolen and is being used fraudulently. Checking your credit report regularly can help you catch such problems early on, and then solve the problem. If you want to avoid having identity fraud go too far, you need to be on your toes so you can nip the problem in the bud.
Bottom Line
Paying attention to your credit is important. Even if you aren't planning on borrowing anytime soon, it helps to be prepared -- and someone other than a lender might be interested in checking your credit. Plus, it's a good way to monitor matters to protect against identity fraud.
Build credit???
This is promoting the culture of debt to the young people.
Quite a good marketing job done by the credit card and loan companies . . .
that of basing your being employed because of a good credit rating.
Is a good credit rating really a must now for hiring good people?
How did the big companies hire the bright and dedicated employees before there were credit ratings?
Are you a responsible person when you spend your future money for today’s need?
Building good credit doesn’t have to mean debt. You can build good credit with responsible credit card use, buying only what you can afford, and then paying off the balance.
Do companies do credit checks on potential employees before they hire them? What if one don’t have a credit history? One has to have a steady job with steady income before they can qualify for any type of loan in the first place.
Leah, I suspect some employers would do credit checks but I’m sure the majority do not…especially for lower wage jobs where turnover is higher. A credit history can be established by having certain utilities or recurring payments for services in your name, even if there’s not much on the report.