A lot has been written about the importance of your credit score, but how important is it really?
It all depends on what you’re doing in your life at any given time. For example, if you’re thinking of buying a home in the next few months, then your credit score is extremely important because it will be a major factor in how much it will cost you to borrow the money for a mortgage. Likewise if you’re looking to buy a new car.
But if you aren’t applying for a new loan or credit card soon, is it really important?
It could also be important if you’re looking for a new job or shopping around for car or homeowner’s insurance. Prospective employers and insurance companies have been known to use credit scores as one of the criteria for judging new hires and new customers.
So, clearly having a good credit score is important, but sometimes people just get too carried away with monitoring it. It’s important, but is it worth the money to check it unless you’re applying for a loan?
I don’t think so. In fact, I don’t even think it’s important to check your credit score even if you’re applying for a loan. Here’s why:
- Your credit score is based on the information in your credit report.
- You can get a basic idea of your credit score for free.
- You can’t really do anything about your credit score that you wouldn’t do about your credit report.
You can get your free credit report from AnnualCreditReport.com and see if your financial history is good, bad or just plain ugly. You can use BankRate.com’s FICO® Score Estimator to get a general idea of how you rate. But consider this – If you paid to find out your credit score was low, you’d have to get your credit report anyway to find out why, and refute any erroneous information. Why not just check your credit report and leave it at that?
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