Despite the concept of credit not existing formally until the 1970s, credit has a large impact on the lives of every American citizen. Credit is required for nearly every major purchase in your life, such as your ability to secure a mortgage loan, rent a home, or own or lease a vehicle.
How can your credit score affect your life? Beyond being able to purchase or lease a home or vehicle, your credit can also impact your ability to secure loans (personal or business loans, for example) and secured or unsecured credit cards.
What Can Lower Your Credit Score?
If you fall on hard times and miss payments, it can negatively impact your credit score. Lower credit scores typically result in higher interest rates for future loans and credit borrowed, or difficulty securing those loans and credit in the first place.
Errors on your credit report can also cause your credit score to lower. These are errors from the businesses or lenders you borrow from. These lenders may have outdated information on your reports or accidentally confuse your identity for that of another person.
This is where credit repair in Pennsylvania comes in handy with a reputable credit repair company. These professionals can comb through complicated credit-related documents, spot negative inaccuracies, and petition on your behalf to dispute these items to get your credit back on track.
Of course, inaccurate or outdated items aren’t the only things that can affect your credit.
How Employment Can Affect Credit
There are instances where a potential employer may check your credit during the application process. This does require them to have written permission in order to access this information, and this is only really common for positions that require you to manage money or receive a government security clearance. Employers can’t see your exact credit score, but they can view your payment history and credit report factors that would contribute to your score.
If you are applying for loans or lines of credit, lenders will typically request your income to calculate your debt-to-income (DTI) ratio. This is another way your employment can indirectly impact your ability to secure a loan or credit, but this won’t be affected by the type of work you do. They also won’t be able to see how long you worked at a certain position or company, or whether or not you were fired.
How Marriage Can Affect Credit
While in theory, you ‘share everything’ after you tie the knot, getting married doesn’t automatically mean you and your spouse share credit reports. Your past credit history will remain yours, and their past credit history is still fully theirs. However, any joint accounts opened will appear on both of your credit reports.
Does My Spouse’s Credit Score Impact Me?
If your spouse has poor credit, don’t despair–their credit won’t lower your score directly just because you’re now married. The only time this could become a concern is when you want to sign a mortgage together, because their lower score could make it more difficult to qualify for a loan or receiver lower interest rates.
Also, consider the implications of cosigning on loans with your spouse. Say your spouse wants to take out a student loan or a business loan, and you cosign. Now, you are responsible for that debt if your spouse cannot make payments. Additionally, this debt can increase your DTI.
Do I Get a New Credit Score After Changing My Name?
Changing your name won’t result in a new credit report or score. After you update your surname with the Social Security Administration, banks, and lenders you have accounts with, you will see your name change reflected on your credit reports. Your given name will still be there but listed under the ‘former names’ category.
Understanding Credit
This is just the tip of the iceberg when it comes to understanding credit management and repair. Luckily, you don’t need to navigate these confusing waters alone.
At The Phenix Group, we offer both financial and legal insights to help you better understand your credit situation. We help individuals map out their goals, assess their current situation, dispute inaccurate information on a credit report, and build a plan to bridge the gap between the two!