I've been working with a personal finance coach as part of a magazine assignment. As a hand-to-mouth freelance writer (with two kids), my finances are pretty basic. I earn it, I pay my bills, I buy the groceries, put gas in my car...and hold my breath until the next paycheck.
But personal finance coaches, by definition, think big. And after telling me there's no reason I can't fund my "retirement," pay for my kids' college and/or buy a house if I invest wisely, she recommended I get my FICO score.
I didn't tell her that my "retirement" plans involve moving to a cheaper state when the kids are grown and putting my name on the list for low-income senior housing.
I played along and went to MyFico.com, where I bit the bullet, put $47 more on my credit card, and bought my credit report.
Turns out I have better credit than 90% of the country; in the 765-785 range.
Culling my credit reports from the Big Three credit reporting companies, Experian, Equifax and TransUnion, lenders see me as a good risk for all sorts of benefits, from the best rates on home loans to high credit card limits, just for the asking.
My personal finance coach was thrilled. Me, less so. This information doesn't change my situation a bit.
Who cares if I can get the best rates on a home loan when my income is too low to qualify for one? Houses in Southern California, where I live, are still hovering in the $500K arena, although prices are dropping every day. And with no parental help, no rich uncles to inherit from, and no doctor husband, the chances of me saving a 20% down-payment are pretty much nil.
Of course, in 2004 a mortgage broker told me I could get up to $400,000 in loans to finance a house. "If you don't get in today, you'll always be a renter." She said renter with all the disdain one might use for the word pedophile. But I was apparently one of three people in the country who didn't think it was such a good idea, considering my income, and declined. And today I may indeed still be a renter, but at least I'm not being foreclosed upon.
I will never be turned down for an auto loan either, according to my report. This could be handy one day down the road, when my paid-for 2004 Toyota stops running, in about 20 years. I'm hoping to be in a better cash-flow position then, which means I still won't need a loan.
In other words, I'm pleased I have such great credit. But despite all the talk about how direly important a good credit score is, I fail to see how my boffo numbers affect my life or my finances at all. I can easily borrow money, it tells me. But why would I start now? It's like the whole financial game is rigged toward leverage, so when a consumer fails to borrow, they're not in the game at all. And they don't know what to make of you.
Anyone else out there got their credit scores just to see?
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