Actually, You Need a Credit Score

Credit ScoreLast month, The Minimalists did a podcast on debt. That podcast led to a profusion of tweets about the drawbacks of credit scores. In fact, the underlying message–ripped out of Dave Ramsey’s playbook–was that no one should want a credit score.

The Minimalists by way of Ramsey tweeted out that a credit score is nothing more than an I-Love-Debt score. If you don’t love debt, you don’t want a credit score. At all. None. Nada. Zero. It sounds absurd–and it is–because a credit score in-and-of-itself doesn’t cause the debt problem. By their logic, I should throw away my mirror if I don’t like my hair. I should get rid of my scale if I don’t like my weight. And I should probably disregard those wellness screenings I get every year. Those warning lights on my car dash? Apparently, my car can’t have problems if warning lights don’t exist.

The reality of a low credit score is that it reflects a small slice of a vastly complex conundrum, just like a check engine light or a thyroid test result. It is one piece of someone’s overall financial health. It’s not the only piece, nor is it the most important piece. But it is a piece nonetheless. So let’s not ignore it, okay?

Instead of thinking of a credit score as an I-Love-Debt score, I think of it as a Make-Money-Work-For-Me score. Money is a tool. Learn to leverage it. A healthy credit score matters. Not convinced? If you ever plan on doing any of these things, someone is probably going to take a hard or soft look at your credit score:

  • Buy a home.
  • Rent an apartment.
  • Take out a loan.
  • Employer background checks.
  • Set up utilities, Internet, or cable.
  • Rent a car.
  • Open a bank account.

So credit scores do count for something. Of course, if you can pull a Dave Ramsey and pay cash for your mega mansion, you don’t need a credit score. But for the average person, having an understanding of credit is important because it plays a role in establishing a financial foothold. Saying it doesn’t either speaks from a position of ignorance or privilege. And if Ramsey is the financial guru he’s lauded as I’ll let you decide which camp he lands in. While it may be true that you can work around credit inquiries, why put someone in a position where they have to learn to do that?

Besides possibly needing a credit score when establishing yourself as a homeowner, renter, employee, or TV binge-watcher, a high credit score can open a lot of doors for people. If we’re going to teach financial fitness, let’s share all the possibilities. Let’s not limit people.

Here’s a short list of ways in which I’ve put my credit score to work:

  • Financed my Master’s degree and wedding with 0% cards – hello, bonus points!
  • Travel hacked my way to cheaper vacations
  • Qualified for a better mortgage loan rate to the tune of .50%
  • Financed a car for 0% – gasp, I know!

And I’m sure there are all sorts of other ways that my credit score works on my behalf that I haven’t even stopped to consider. The fact of the matter is debt is a problem, but credit scores are not. Like most things finance related, with a deeper understanding, this is one more tool that can put money to work for you.

So Tell Me…What do you think of credit scores? Have you ever put yours to work for you?

Actually, You Need a Credit Score

Frugally Awesome…Or Awkward: Part 4

Awkward 4There’s something about money: It brings out the best, the worst, and the most awkward side of people. Since I’ve dedicated a fair amount of time this summer to side hustling, I’ve had to do some explaining for how I’m spending my time. I get it. A lot of people think teachers have summers off and spend time eating bonbons ice cream straight out of the carton. But even fellow educators have had some really interesting things to say when they hear about my hustling. As usual, my interactions lean more towards awkward rather than awesome. Continue reading “Frugally Awesome…Or Awkward: Part 4”

Frugally Awesome…Or Awkward: Part 4

Financially Savvy Saturdays: One Hundred Sixth Edition

Happy weekend, frugal friends! I hope you’ll enjoy this special weekend post. 

Welcome to Financially Savvy Saturdays, the savviest personal finance blog hop on the planet, created specifically for personal finance writers! We welcome all things money here. Whether you’ve written anything from money saving green beauty products to budgeting tips, you’re invited to link-up.

If it ties into personal finance, we want to read it!

Financially Savvy Saturdays Blog Hop with Disease Called Debt and Broke Girl Rich

She Picks Up Pennies

This week we’re excited to welcome Penny from She Picks Up Pennies where she writes about getting her budget on track and finding the good life through simplicity!  Continue reading “Financially Savvy Saturdays: One Hundred Sixth Edition”

Financially Savvy Saturdays: One Hundred Sixth Edition

My $7 Breakfast Budget for the Month: An Ode to Oatmeal

$7 Monthly Breakfast BudgetSome say breakfast of champions. I say breakfast of cheapskates. Some people were surprised to hear that our grocery budget goal for this month is $200. It clocks in quite a bit lower than the national “thrifty” average of $387 for two people. I’ll let you in on a secret. Part of why our grocery budget currently clocks in at the fairly low total of $250 is my morning food game plan that only sets me back approximately twenty cents a day. Continue reading “My $7 Breakfast Budget for the Month: An Ode to Oatmeal”

My $7 Breakfast Budget for the Month: An Ode to Oatmeal