11 Facts about Credit Scores that Will Change How You Spend

TL;DR

Your credit score is more important than you think, affecting job opportunities, insurance rates, and even housing applications.

Transcript

Hey bow tie Nation Joseph Hulk here trying to save you a lot of money I know credit scores isn't something we usually talk about here on the channel but it is more important than you know and more important than just the interest you pay on your debt in fact I found 11 surprising facts about your credit score that will have you rechecking your FICO... Read More

Key Insights

• 💳 Employers often conduct credit checks on potential candidates, making a good credit score important for job seekers.
• 💝 Late or missed payments can significantly damage your credit score for several years.
• 💳 Bad credit can lead to difficulties in finding housing, as landlords often reject applicants with poor credit.
• 💳 Checking your own credit report does not harm your credit score, but multiple credit applications can negatively impact it.
• 💳 Closing old credit card accounts can lower your overall credit limit and decrease your average account age, both of which can negatively affect your credit score.
• 💳 Insurance companies use credit scores to determine monthly premiums, meaning bad credit can lead to higher insurance rates.
• 💳 Adding rent and utility payments to your credit report can improve your payment history and boost your credit score.

Questions & Answers

Q: How did credit scores come into existence?

Credit scores were introduced in the 1950s to replace the subjective process of loan approvals based on personal relationships with bankers.

Q: How has homeownership changed over the years?

Homeownership rates in the US have significantly increased in the last 60 years, with as many as 7 in 10 Americans now owning their own homes.

Q: What are the consequences of not having a credit score?

Not having a credit score can hinder job opportunities as potential employers often conduct credit checks. It can also impact insurance rates and make it harder to secure housing.

Q: Can checking your own credit report affect your credit score?

No, checking your own credit report is considered a soft inquiry and does not impact your credit score. However, multiple hard inquiries from lenders can negatively affect your score.

Summary & Key Takeaways

• Credit scores were not established until the 1950s, and prior to that, loan approvals were based on personal relationships with bankers.

• Homeownership rates in the US have significantly increased in the last 60 years, with up to 7 in 10 Americans owning their own homes.

• Lack of credit history affects 26 million Americans and can have various negative impacts, such as difficulty in securing employment.