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What Is a Good Credit Score Rating? New Study Confuses Issue

By Nathaniel Hutchinson Business and Financial Expert


Most everyone knows that their credit score is often the fundamental key to securing mortgage loans, lines of credit, car and small business loans. Unfortunately, these days many Americans have seen their ratings decline, due to unexpected layoffs and reduced incomes that have forced them to prioritize spending. To acquire and maintain a good credit score rating, people need income; to get income, they need a job. Without the latter, the former simply cannot occur.

For years, people have worried that employers would begin to use credit scores to slim their list of potential candidates, and recent data confirms that approximately 60 percent of businesses do indeed scan credit ratings to learn more about applicants. Still, until now, no one really knew what if anything a person's credit history might indicate about them in respect to job performance. Now, a new study is confusing the issue of what it means to have a good credit score rating.

What researchers found

Though many have long believed that a personís credit score gave clues about his or her intelligence, personality and integrity, no one knew for sure. Now, the picture seems a little clearer.

According to a study performed by researchers at Louisiana State University, employees who have low credit ratings aren't more likely to be lazy, steal or demonstrate any sort of deviant work behavior; however, they do tend to be more easy-going and agreeable.

So what is a good credit score rating?

If further research yields results similar to the Louisiana State University study, many employers may either stop using credit scores to weed out potential candidates or start giving preference to candidates with relatively minor dings to the rating. Some have even suggested that employers are already doing this to promote consistency and reduce turnover, because they fear that those with spotless credit reports might be more prone to actively searching for better positions.

Still, because these theories are in fact only theories, it's probably a sound bet that a good score is better than a bad one, and most financial experts aagree that a strong credit score rating falls somewhere in the mid- to high-700s.

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