Your Credit Score Can Affect Your Bottomline - By: Janice Willingham

Besides your social security number and drivers' license number, the other most important three digit number is your credit score. Get your credit out of whack, and your financial life can be pure misery. Most numbers affiliated with your name serve as another means of identification. Your credit score means more than that and if left unattended or falls into the wrong hands it could take years for you to get back in good standing with creditors. In this article I will explain the necessity and importance of your credit score.

The basic premise surrounding credit scores is the ability for creditors, insurers and in any other financial related provider to be able to predict financial risk, the probability that you will or have the ability to re-pay money that you borrow or measure the likelihood you will file an insurance claim be it auto or home coverage. It's fair to say that a better score means a better arrangement or agreement with your landlord, insurers and creditors.

Your credit score affects how much in interest you pay for a credit card or whether a loan can be extended to you. Creditors as a means of protecting themselves and depending on your need for credit will offer loans that are too good to pass up, but carry a hefty interest rate behind them because of your credit. For example, someone that can purchase an automobile at a five percent or less interest rate apparently has great credit. However, there are those consumers who are charged a nine percent interest rate or higher because their credit score is below a certain number where a low interest rate is not applicable.

Utilities for your home including cable companies, telephone service, cellular phone service are wanting to check your credit score. A higher credit score in these situations could make the difference between paying a deposit for service, obtaining a discount on the deposit or the probability of getting the deposit waived because of your good credit. Additionally, employers also check your credit which could be the difference between landing your dream job or being unemployed.

When calling insurers to obtain home and auto quotes, have you noticed they ask for your social security number? This is so they can check your credit history. A less than perfect credit score can cost you a lot of money in premiums. Some insurance companies check your credit score annually and will adjust your premium accordingly. Keep in mind that if your credit score is negatively affected for any reason, it may not be the time to go shopping for insurance rates. Also, if you know your credit score is not where it should be it would behoove you to look for an insurance company that does not use credit scores to determine your premium.

Although many people are not aware of how their credit score affects them financially, the financial institutions, insurance companies and others are well aware of that all important three digit number because studies have shown that it predicts how these companies will make their money and whether they are willing to take a chance on you.

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