What's On Your Consumer Credit Report?

Did you know that your credit activity can not only affect how much you can be approved for a loan, it may also affect your employment? It's true. More and more employers are using Consumer Credit Reports to decide whether you will potentially be a trustworthy employee or not.

If you think about it that makes sense. Employers want to know if you can handle your finances. The employee that can is more responsible. He or she is less likely to rip off the employer. They are also more likely to turn in assignments on time and do accurate work. A good consumer has the qualities of being a good employee.

That is not to say that you do not have rights. By law, any time an employer or potential employer looks at your consumer credit report, they need your permission to do so. But here's the catch. That also goes on the report, so they can see how many employers have looked. That may show that you are a job hopper. It may also show you applied with their major competitor. Not a good sign.

The good news is that if you are diligent in monitoring your credit report and you pay your bills on time, then employers will want you. That may put you several notches above the guy filling out the application next to you. Whatever the decision the employer makes, if it was partially based on your consumer credit report, they have to disclose that fact.

There are many myths about your report. For example, did you know that you can have more than one credit score? Each of the three financial bureaus, Equifax, Experian and Trans Union, keep their own scores. They may not have all the same information, so may be tabulating the score differently.

Your salary does not reflect your score. What reflects your score is how much you make versus how much you owe. Your brother can make 100K and owe 70K and have a lousy score. On the other hand, you can make 30K and only owe 5K. Your score will most likely be a lot higher than his. You may make less, but it shows you are more responsible with your money.

When you get married, your scores are combined as are your consumer reports. Not true. What is true is if you go in together for a loan it is revealed on each of your reports. But what you owe on your own is not reflected on your spouse's report or vice versa.

Paying off a debt and canceling most of it can raise your score on your report. Maybe. But if you owe a lot on other cards, it may skew the report. Many people will pay off the little stuff first at the risk of letting the big stuff slide. Don't make that mistake. Work to pay off everyone on time.

What lenders and employers are looking for on your report is the ratio of what you make compared to what you owe. It does not matter if you owe three people or thirty. What matters is that you have regularly paid them on time and you do not owe more than you make. In fact, the lower the percentage, the better. That means you have more buying power and can manage your debt. That is what should be reflected on your consumer credit report above all else.