Why should you care about your credit history?

1) You are being watched. 

National Credit Reporting Agencies (NCRAs) and Credit Reporting Agencies are constantly collecting data about you. This data is provided to each agency by “Data Furnishers”. These Data furnishers can be your bank, your utility company, your landlord, the federal government, and more. Your history is collected, packaged and sold to companies in order for them to make decisions. This happens in the background everyday without many people realizing it. This system of constant information exchange are the pipelines that underlies the credit system of the United States. 

1b)  Broad Amounts of Data Collection 

National Credit Reporting Agencies  together are the closest thing to “Big Brother” that exists right now. 

 A sample of information collected about you and contained in your credit report is below

- Names, Nicknames

- Tradelines ( Each Credit Account you have opened ) 

- The Tradeline’s Payment History (did you pay on time, what was the minimum payment )

- Your Employer 

- Your Address History 

- Bankruptcy Record 

- Criminal Records 

- much more... 

2) Risk Based Pricing 

Bad Credit is very expensive

Risk based pricing is an industry term that loosely translates into “the worse your credit history is, the more we will charge you for your credit product.” I cannot stress how much money you can save from Establishing a positive credit history early in your life. Your credit products are limited by the scores generated by your data. 

3) Permissible Purposes - 

By law, many individuals and organizations can access these reports.

Many entities can access the broad amount of personal information that was collected about you in order to make decisions. By law, these companies can access your credit report with a “permissible purpose”. A sample of the individuals who can access your credit are...

- Landlords

- Anyone in connection with an extension of credit offer ( Bank, Credit Union, PayDay Loan, Auto Dealership) 

- Perspective Employers

- Insurance Companies 

- etc.

Conclusion

Spread awareness that there is a system exists in the background of your life that will consistently track key data about you. These data points mostly relate to your spending habits and uses of credit but also show much, much, more. The data complied from your behaviors will have an enormous impact on your life. 

By Law, you can access these your credit reports for free. Refer to my post "How to Analyze Your How Credit Report" or the Consumer Finance Protection Bureau Website. For more information how how you can learn to access and reference your credit history. https://www.consumerfinance.gov/consumer-tools/credit-reports-and-scores/

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