Why Your Credit Score Matters (Even If You Don’t Use Credit)

I can’t tell you how many times I’ve heard people tell me that monitoring their credit score isn’t important. I’ve heard everything from, “I don’t use credit anyway” to “mine is already bad, so whatever”. Folks don’t realize that though we usually think of credit cards when we think of credit, our credit scores are used to dictate many areas of our lives.

Utility deposits – many utility companies will want to run your credit score in order to turn your services on. You may be asked to provide a deposit if your credit score isn’t up to snuff. We all need electricity, water, gas, etc. Keeping your credit score up lowers your total moving costs by not requiring deposits.

Jobs – employers have been known to run your credit and conduct a background search. More and more often that stack of papers in your application packet will include a request you pull your credit scores. Employers think that if you have a low score you might be tempted to steal or might be distracted from working. Having education and experience is great, but in this day and age it might not be enough to land a great job.

Loans – the interest rate that you will be offered on car loans, home loans, credit cards, etc. is based, in part, on your credit score. The higher the score the lower the interest rate. The lower the interest rate, the more money you save.

It’s important to monitor your 3 credit reports. Make sure that your reports are error free and that you’re taking proactive steps to keep your scores as high as possible. The only site that will offer you free access to your credit reports (not your scores) is Annual Credit Report. Don’t be fooled by sites that pretend to offer you a free credit report when they are really selling you a monthly credit monitoring service and providing the credit report to lure you in and get your credit card number. Read more about how to maintain stellar credit scores in Money Matters: The Get It Done in 1 Minute Workbook.

About the Author: Shay Olivarria is a professional speaker and the author of 10 Things College Students Need to Know About Money and Money Matters: The Get It Done in 1 Minute Workbook. She is currently writing a book on personal finance for foster and transitioning youth while teaching a personal finance class at Riverside Community College. For more information about Shay Oliarria and her work visit http://www.BiggerThanYourBlock.com.

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