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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: iris lily on November 15, 2014, 11:23:11 AM

Title: Why should I care about my credit rating?
Post by: iris lily on November 15, 2014, 11:23:11 AM
My credit rating is, the last time I checked, around 750. I was surprised since I figured it would be in the 800's. But whatever, I don't really care.

Should I care?

I can't see how we will ever borrow money. We haven't borrowed money in, hmmmm, around 30 years ago for a mortgage when I was single.

I know that credit ratings affect insurance, but I'm not sure how much and in what capacity. Does it affect premium rates? What else does a credit rating affect that will be important to me? I won't be job hunting and I don't work in the financial industry, anyway. 

Comments? Again, should I care about having the highest rating possible?
Title: Re: Why should I care about my credit rating?
Post by: Paul der Krake on November 15, 2014, 11:48:18 AM
It doesn't matter. Anything above 730-750 automatically gives you the best rate on everything. Above that, you only get bragging rights.
Title: Re: Why should I care about my credit rating?
Post by: GizmoTX on November 15, 2014, 11:57:53 AM
Credit Karma says that we need more loan history other than credit cards to get into the 800s & we're not about to do that.

Title: Re: Why should I care about my credit rating?
Post by: forummm on November 15, 2014, 01:38:19 PM
I think a good credit rating is important to have just in case you need it. About 6 months ago I told my wife that it was weird to not care about my credit rating since I'd probably never need to borrow money again. Then a few months later I was able to borrow 5 figures at 0% for 6 years. Then I did that again a few months later. So it may not be necessary, but it can be nice (and profitable) to have.
Title: Re: Why should I care about my credit rating?
Post by: frugaliknowit on November 15, 2014, 03:49:20 PM
No, you shouldn't care, especially if you're not planning to apply for any loans.  A high credit score does come in handy for credit card rewards games and airline points hacks, but I doubt it needs to be above 750.
Title: Re: Why should I care about my credit rating?
Post by: MoneyCat on November 15, 2014, 04:31:16 PM
A good credit rating might be useful if you are planning to purchase a rental property with a loan.  I suppose that's about it.
Title: Re: Why should I care about my credit rating?
Post by: Frankies Girl on November 15, 2014, 04:56:37 PM
Another reason to care is if you discover it is seriously low and you have no idea why, as that could be a sign of identity theft. ;)
Title: Re: Why should I care about my credit rating?
Post by: chucklesmcgee on November 15, 2014, 08:47:03 PM
Not important. A merely adequate credit rating (SOME credit history, no late payments, bankruptcies, etc.) is going to be fine for any background checks, apartment rent approvals, etc. Only time an excellent credit rating is really critical is if you plan on applying for a mortgage or want to apply for a lot of credit cards in a short period (those signup bonuses can be worth it if you're into that).

Other than that, just check every 6 months or so to make sure nothing fraudulent is going on. Creditkarma.com is a fast way to check.
Title: Re: Why should I care about my credit rating?
Post by: arebelspy on November 15, 2014, 09:40:26 PM
Keep in mind that it matters which score to compare if it's "good enough" - some go to a max of 850, some to 900, etc. 

But once you hit a "good enough" (i.e. in the top tier range, whatever part of that range you fall in) you really shouldn't care.

There is nice benefits to it being good, but no extra benefits for being at the top of the top tier, rather than the bottom of the top tier.
Title: Re: Why should I care about my credit rating?
Post by: Dicey on November 16, 2014, 12:42:04 AM
Some time ago, I forgot to pay my AMEX bill. They sent me a very nasty letter, raising my interest rate to something approaching 30%, and threatening my credit rating. Seriously? I've been an AMEX customer for over 30 years and all this for a missed payment? I laughed as I shredded the letter. I don't carry a balance, so I don't care about the interest rate, and my credit score is sturdy enough that I won't lose any sleep over it. What continues to bug me about this while thing is: what would happen if I was really struggling to pay my bills and/or build my credit score? Since I'm FIRE, and all my stuff is paid for, I don't give a shit, but the system seems to be rigged so the struggling person hardly has a chance.
Title: Re: Why should I care about my credit rating?
Post by: LifestyleDeflation on November 16, 2014, 05:21:16 AM
Then a few months later I was able to borrow 5 figures at 0% for 6 years. Then I did that again a few months later. So it may not be necessary, but it can be nice (and profitable) to have.

Mind if I ask how you managed that? I've got great credit and may be looking to borrow a similar amount next year.
Title: Re: Why should I care about my credit rating?
Post by: forummm on November 16, 2014, 08:33:23 AM
Then a few months later I was able to borrow 5 figures at 0% for 6 years. Then I did that again a few months later. So it may not be necessary, but it can be nice (and profitable) to have.

Mind if I ask how you managed that? I've got great credit and may be looking to borrow a similar amount next year.

http://forum.mrmoneymustache.com/share-your-badassity/nissan-leaf-almost-paying-me-to-drive-it/
Title: Re: Why should I care about my credit rating?
Post by: Bob W on November 16, 2014, 09:03:27 AM
Because no one desires a low rating.
Title: Re: Why should I care about my credit rating?
Post by: chasesfish on November 16, 2014, 10:26:30 AM
Banker advice here:  Credit scores are bell curved.  It's not worth the effort to attempt to get more than a 720-730.  There's no added benefit to you