It may come as a surprise that your credit report and credit scores follow you in many different places. Your reports aren’t only in play only when you apply for a new loan or credit card. They can also be used when shopping for everything from a cell phone to a new place to call home.
Do you know all the places where your credit report could affect you? Here are five surprising places that your credit may (or may not) be used to make a final financial decision.
Are Credit Reports Used for Insurance Decisions?
In many states, insurance companies will create their own “insurance score” based on your credit report. This score is used in conjunction with other factors about you to determine your auto insurance or home insurance rate, broken down into monthly payments.
However, California is one of three states that prohibits insurance companies from using your credit report to determine your premiums. Instead, they must use risk-based considerations to determine your score, which include where you live, the value of your home, at what age you first obtained your driver’s license, what type of car you drive, and how many miles you drive daily.
Are Credit Reports Used for Rental Decisions?
Credit reports and credit scores are commonly used in rental home decisions. When finding the right home to rent — be it an apartment or house — landlords often request a copy of your credit report and credit score. Some landlords may even require your credit score to be above a certain number before considering other factors, like employment, income, and rental history.
In California, landlords can only charge a screening fee to applicants in serious consideration for a rental home, while refunding fees to anyone else who was considered but ultimately denied. If your rental application is denied, the landlord must inform you of the reason. If it is credit related, they are required to provide the name, address, and phone number of the consumer reporting agency they pulled from.
And if you’re building your credit, new laws for renters are on your side. Starting in 2025, bigger property owners must offer you the opportunity to have your positive rental history reported to at least one of the three credit bureaus, which could improve your credit score.
Are Credit Scores Used for Employment Decisions?
In some situations, your credit report can be used during the employment application process. California law allows for credit reports to be considered when seeking certain positions, which include (but are not limited to):
- Managerial positions
- Sworn peace officers or other law enforcement jobs
- Any job that has regular access to bank or credit card account information, Social Security Numbers, or dates of birth
- Anyone who has access to $10,000 of cash or more during their workday
- Those with access to confidential or proprietary information, including trade secrets
For other jobs, a company may ask prospective employees to provide a credit report during the screening process. While they can only obtain one with your written permission, a company can reject your application if you do not allow a credit check. If you are not sure about allowing a future employer to see your credit, you can always ask how they intend to use your credit report and what safeguards they are using to protect your personal information.
Are Credit Reports Used for Cell Phone Services?
When it comes to traditional, or “postpaid” cell phone accounts, providers want to know that you have a good history of paying your bills on time. In addition, if you are buying a phone on a payment plan, the provider will want to ensure you can afford it without missing payments. To get those assurances, a cell phone provider may run a credit check before opening your service account.
If you are worried that your credit may not qualify you for a phone line, you could still have options. You may be able to qualify for a prepaid account with a discounted phone and work your way up towards getting a full-featured postpaid account with a good payment history. Check with your cell phone provider to determine what options may be available.
(Tip: SESLOC’s HomeFREE Checking comes with Identity Theft Recovery + Mobile¹ coverage free for every member! Our mobile phone coverage² provides insurance coverage up to $500 minus a $50 deductible for your cell phone’s repairs or replacement due to accidental damage, mechanical failure or theft.)
Are Credit Reports Used When Opening New Deposit Accounts?
A credit union or bank will run a credit check if you are applying for a line of credit, such as a credit card, auto loan, or personal loan. When you are opening a deposit account, they will run a ChexSystems report.
A ChexSystems report provides a financial institution with a history of your previous checking or savings accounts you have held, as well as any issues you have had with them. If you have a history of overdrawn accounts, non-sufficient funds returns, unpaid bank fees, or even an involuntary closed account, it will show up on your report. With this information, the financial institution will determine if you can open an account, or if you are limited to certain accounts.
At SESLOC, we believe everyone should have access to the right tools to improve your financial life. If you’re rebuilding your financial standing or just opening your first account, our Basic Checking is perfect for those who are rebuilding their financial life or opening their first account. It’s available to everyone eligible for membership aged 13 and up with access to tools which help keep budgets on track. And both of our checking accounts – Basic Checking and HomeFREE Checking – comes with access to your credit score and educational materials to improve your credit.
Plus, all members get free access to GreenPath Financial Wellness, which can help you understand your credit report and credit score while giving you the tools you need to improve it over time. And if you need a human touch, GreenPath offers live assistance with budgeting, debt counseling, and achieving financial wellness. No matter where you are at with your credit journey, members save more with SESLOC.
