A funny thing (actually, it’s quite sad) happens to some people when they check their credit score. They become beholden to it and start doing financially dumb things in an attempt to drive their score up a few points.
Others obsess over their credit score assuming that a credit score is like a personal finance grade. They think, “If I’ve got a good credit score, then I must be doing well financially.” That’s not necessarily true.
We tend to worship our scores and it’s completely unnecessary. Here’s why:
1. Your score stinks
If your credit can’t get much worse, don’t worry about harming it further – just get back on track with your finances as a whole. Spend within your means, delete your debt, clean up old accounts and pay on time from this moment forward, and your credit report will brighten up on its own.
2. Your score is incredible
You’ve done it – achieved perfect or near perfect credit! If your FICO score is over 750 and you’re debt-free, good for you. Just be happy with what you have and keep doing what works to maintain your healthy credit.
3. Good scores lead to bad debt
Your credit score may be the thing that got you into trouble in the first place. Maybe you qualified for a loan that you really didn’t need or bought too much house because the interest rate was low and now you’re paying dearly for it. Being preoccupied with raising your credit score will only enable you to take on more bad debt and land you back where you started.
4. It can become an idol
Reviewing your credit reports annually is wise (if only to ensure no fraud has taken place), but overdoing it can cause unnecessary anxiety. When you’re rebuilding your financial life, the last thing you need is added stress. In fact, worrying about minutia while your credit is already in the basement will unnecessarily fray your nerves and may even prevent you from taking the necessary steps to heal your financial situation. Just stay on track and your credit score will take care of itself.
Fixation can also result in splurging on extraneous services. “I was once obsessed with checking my credit score,” says R.J. Weiss, a financial blogger at Gen Y Wealth. “I was 19, I had a bill go to collections. Once I realized I couldn’t get a normal credit card, I started to monitor my credit rating heavily.” He began paying $15 a month for a monitoring service, but after about six months, he realized he was wasting his money. “The only thing I could really do at the time was to pay my bills on time,” he explains.
5. Your credit score isn’t eternal
When you get to heaven, your housing arrangements won’t be influenced by your FICO score. Seriously. Instead of worrying about what earthly banks and lenders think of you, obsess over your heavenly credit report. How many people have I influenced for Christ? How has my money helped send people to heaven? This shift in your thinking will lead to a more satisfying outlook on life and greater rewards when you leave this place.
6. It’s not a status number
Forget trying to reach the scoring heights if it’s because you’re competing with someone else, or you think it rates you as a human being. Both jerks and saints could do everything necessary to earn an 800 FICO.
What has happened that has caused people to become so obsessed and fixated in their credit scores? We’ve fallen victim to the myth that you need a good credit score to get through life financially. Here’s the reality: you can and should get through life without a credit score. As Christians, we are instructed to avoid debt at all costs, so why would we need to worry about a mechanism that helps us borrow?
What do you think? Do you worry about your credit score? Why? Leave us a comment below.