Do I Need To Worry About My Credit Reports if I’m Not Applying For A Loan?

You may have all the credit cards you need, including a mortgage and a car loan.  Why should you be concerned about your credit? You have no need for any additional credit right now.  The reason is that lenders aren’t the only companies that review your credit report; insurance companies and employers can also review your credit.

Insurance companies

Credit is a component of the insurance underwriting process, and can impact the rate you pay for your auto insurance.  There are statistical studies that show the correlation between filing an auto claim and how you handle credit. Poor credit correlates to a high insurance risk.


Current and potential employers can review your credit.  Most states permit employers to review your credit.  If you have bad credit, it could jeopardize current or future employment. It depends upon the responsibility of the position and the employer.

Card issuers

Credit card issuers monitor you credit periodically and review your credit prior to re-issuing your card.  If your credit has changed to a higher risk level, your credit limit could be lowered and your interest rate increased.

You may not need credit now, but you never know when you may need it.  For example, you could get in a car accident and need to obtain a loan to replace the car.  You may decide to refinance your home, apply for a home equity loan, or apply for a credit card that offers a lower interest rate and/or better rewards.  If your credit poor, your may not quality for the loan;  and if you do, you may pay more in interest.

If you have very good or excellent credit, you should try to maintain it.   If you have poor or fair credit, you should work toward improving it.  It takes years to build up credit and takes effort and patience.  The best advice is to pay your bills on time and in full.  If you can’t pay your credit card bills in full, you need to keep the balances low.  In addition, don’t apply for new accounts frequently or that you don’t need.

Also, read >  Consumers Unsure About Credit Score

JRU on 60 Mins SetCredit Reporting Expert, John Ulzheimer, is the President of Consumer Education at, the credit blogger for, and a Contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and, John is the only recognized credit expert who actually comes from the credit industry.  Follow him on Twitter here.