Crumbling Credit Score and my Family Life – The pressure is mounting!

April 27, 2010

Author: William M. Davis

Did you know that your bad credit can affect your family life in ways imaginable? Some people think that having bad credit can only have a negative affect if they apply for credit or from obtaining better loan deals and interest rates, but in an article written by Liz Pulliam Weston on MSN Money, shows that bad credit can also cost you a job.

According to Liz Pulliam, A fair chunk of employers want to examine your credit history before offering you a position or a promotion. Blotches there — repossessions, collections, high credit card balances — could cost you the job you want. For example, applicants for Transportation Security Administration airport screener jobs are rejected if they have more than $5,000 in overdue debt. Liz also stated that, many companies do use credit histories as a way to weed through job candidates. In the private sector, the people most likely to have their credit reviewed are those who will deal with cash or valuables, or who are financial executives, said Greenblatt, a labor attorney with more than 30 years’ experience in employee testing and screening.

“Bank tellers, CFOs (chief financial officers), controllers, people who work for brokerage institutions, financial institutions,” he said. “Jewelry manufacturers do credit checks. . . . When you’re dealing with diamonds, they’re easily concealed (and stolen).”

Keeping Your Credit Score High

The number one most damaging thing to your credit score is bankruptcy with the least damaging is a maxed-out credit card. Depending on your initial score, a late payment can lower your score by 60 to 110 points. If you have a foreclosure on your record this can drop your score by 85 to 160 points and debt settlement can cause a drop in your score of 45 to 125 points. Overall, any significant drop in your credit score is not good for obtaining credit because lenders use these scores to determine your credit worthiness and the higher your score the better off you will be in qualifying for a loan as well as getting a favorable interest rate and other terms and conditions on the loan.

Determining a Borrower’s Credit Worthiness

Lenders also use other factors in determining your credit worthiness, such as:

• The total amount of debt you have in comparison to your income.
• How long you’ve been employed at your current job.
• The amount of savings you have.

In-order to reestablish your good credit you will need to use credit, however use it wisely and only for emergency purposes and most importantly pay your bills on time and do not exceed the credit limit. By doing these simple things, you can regain your once flawless credit history and put your family life back on track to a better financial future.