- Rentals and leases – Landlords and property management companies frequently believe there’s a direct correlation between a credit score and how reliable a tenant will be in paying rent timely. As a result, scores are often being used for tenancy approvals.
- Security clearances – Those who can’t manage their finances well can be seen as a potential risk for blackmailing and temptation to disclose data or products for easy money.
- Hiring – Companies have long known application forms and interviews don’t tell very much about a job candidate. However, credit scores can often signal a disciplined, reliable person versus a poor candidate that shouldn’t be hired.
The best ways to improve a personal credit score are usually controllable. They involve making debt payments in a timely manner or, even better, paying off debt completely. Multiple accounts should also be streamlined to the oldest, largest accounts, with a preference for collateralized debt versus open-ended revolving lines of credit (i.e. credit cards). This shows long-term stability and successful debt management, which scores better. Consumers should also regularly vet their credit history to find and remove any mistakes which can negatively score downward.
A credit score doesn't have to be a thing feared, but it does take work to maintain and monitor. A consumer who understands this fact gains an upper hand on the scoring system, understanding how to use it.