Does your FICO score really matter?
Is it that big a deal?
While some say it’s not a big deal, others say it’s huge.
What Is a FICO Score?
For some of you who may not know what a FICO score is, it’s a tool used by all three credit bureaus such as TransUnion, Experian and Equifax to be able to lend you more money. It consists of different areas of your debt history such as the length of time you’ve had debt, what type of debts you’ve incurred, your payment history, among others.
One of America’s trusted voices on money, Dave Ramsey, says that you shouldn’t really care about your FICO score. He talks often about how he has a zero credit score, and that it shouldn’t really matter to you what your credit score is.
We couldn’t disagree more with that stance. The fact of the matter is that we all need to be concerned and up to date on your current credit situation. You should consistently be acquiring your free credit report from AnnualCreditReport.com and you should use companies like Credit Sesame that allow you to track your credit score for free.
FICO Scores Aren’t Just for Loans
I’s even bigger than just buying a house or acquiring a car. They’re checking your credit for everything right about now. If you want a job, guess what? They check your credit. If you want to work at McDonald’s or if you want to join the military, guess what? They’re checking your credit! You can’t walk around with a low FICO score and expect anything positive to happen for you financially.
You’ve probably heard of people who had zero credit scores but were still able to underwrite different loans manually. That’s all great, but it is equally important that people build good credit in their names. The higher your credit score, the better your interest rates will be if you do decide to apply for a loan. Do you know that there are people who have been declined job opportunities not because they weren’t qualified to do the work, but because their credit was just plain awful?
Some of you might be thinking, “Why do they need to check my FICO score?” It is because companies feel that if you can’t handle your own household finances, why would they even let you around their business operations and/or put you in charge? For better or for worse, they use the FICO scores with which to judge you.
Given this reality, the FICO matter should be taken more seriously. Do you even know what your score is right now? Do you know what the FICO score range is and where you stand on that scale? Where you are determines a lot such as the type of interest rate you’re going to get. In addition, insurance companies look at your FICO score to judge the rate best suited for your profile.
Your FICO Score Really Does Matter
Your FICO score is of utmost importance. This is why you should heavily consider using credit monitoring sites such as Credit Sesame to help you monitor and understand your credit rating. Start doing the work yourself and make sure that you pay your bills on time. If you are in debt, get out of it. That’s probably the best thing you can do for your credit. How you use credit cards and not carrying a balance are other areas of importance. In short, there are various things you can do if you want to build your credit.
First and foremost, you have to wake up and see that your current FICO score may not be what it needs to be right now. But if you put in the work and effort, you can change it. Don’t sit there in a credit mess and feel sorry for yourself. Get up and get to work. Fix it, change it, and increase your FICO score today. Why? Because you are being judged based on that score.
You can ask for your credit report or score anytime your credit is pulled, and it’s practically free of charge. In the end, your credit should matter to you. I’s time to have that conversation with your spouse or your accountability partner. It’s time to figure out where you stand. What does your FICO score look like? Do you have bad credit? Your current situation doesn’t have to be your final situation. Get to work, take a look at your credit and figure out what you can do to improve it starting right now. You can win at this thing called personal finance.