Many people are beginning to realize how important it is to keep tabs on their credit scores. There are many factors influencing your credit score and the more you know about them the better prepared you can be to deal with them. Today we are going to look at an aspect of your financial history that you may not have thought of when it comes to your credit scores and getting a loan or line of credit. Your job history can play an important role and can show you how credit scores affected by a job can come back to haunt you.
What is a Credit Score?
It is recommended that you perform a credit report check at least once a year. This is important because while it may seem like a random set of numbers, your credit score holds much of your financial future. The score is a snapshot of your credit history up to that current time. The score tells lenders how trustworthy, responsible, and wise you are when it comes to finances and debt management. The higher your score the better lenders will see you and the more likely it will be that you can get a loan. Lower scores are seen as bad because it shows you are not wise with your spending habits, you miss payments, have out of control debt, and are not very reliable. You can check your credit report at creditreport.com. It is important to know what your score is because it can help you know loans you may qualify for, what interest levels to expect with lines of credit, and will help you know where you stand in the eyes of the lenders.
What is Job Hopping?
While your job history might seem to be something that is limited to just your ability to get a job, it is one factor affecting credit scores that many people do not think of. Job hopping is the term used to describe the situation where you have bounced from one job to the next in rapid successions. Even if you were not fired, it can still look bad if you have held more than 2 jobs in the past year. Sometimes it is unavoidable and a job change must take place. Fortunately, there are a few cases where a rapid job change will not negatively impact your credit scores. If you leave a job to seek a better paying job, that usually will not affect your credit standing. Additionally, losing a job because the company goes out of business generally will not have too much impact either. The longer you can keep a job history going with the same company the more it will help your credit score.
How Does Job Hopping Affect Credit Scores?
Lenders see job hopping as a red flag because it shows you may have a level of instability when it comes to work. If they are going to lend you money, they want to make sure that they get their money back on time. When you have many jobs listed in a year or two's time span, it makes them wonder if your current job will last. Sure you have the money now to pay back the loan but will history repeat itself and have you without a job in a few month's time? Lenders are usually not willing to take that risk, and it shows on your credit score and in your credit reports. This can also affect getting a job when the credit report on a job application that you send in shows financial woes.
The importance of staying on top of credit reports is becoming more and more obvious as people continue to struggle through tough economic times.People who are just now checking their credit scores for the first time or the first time in a very long time may be surprised to see what they find. There are many factors influencing your credit score and your job history is just one of them.