Are You a Credit Score Wannabe?
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These days, it’s not about who has the flashier designer clothes or the faster car – it’s about who has the higher credit score! That’s because the better your score, the better position you’re in to manage your financial future.
Why? Believe it or not, have a strong credit score is one of best ways to save money, says financial lifestyle expert Denise Winston, founder of Money Start Here, which produces financial seminars and DVDs. “Your credit score can determine if you get your dream job, your auto insurance rates, the cost of future loans, if a landlord will rent you an apartment, and much more,” she says.
In order to become a “first class” credit user, start by adopting the strategies of these top-tier score holders.
Credit is No Laughing Matter: Jim Dailakis
Credit Score: 760
New York City-based actor/comedian Jim Dailakis may be a clown on stage, but when it comes to his financial status, he’s straight as an arrow. The Australian-born performer owns two homes and pays his bills on time without fail.
His strategy: “I see when the due date is and then put it on my electronic calendar on my computer,” Dailakis explains. Then, he says, he makes sure he has enough to pay the total amount, to the penny, every time.
Why you should try it: “It’s very liberating not to feel the ‘wolf’ pounding at my door,” says Dailakis. “I’ve definitely acquired financial discipline.”
Lesson learned: Keeping up with your credit can be a challenge, says credit consultant Wayne Sanford of YourCreditSpecialist.com. He suggests setting up an online auto-pay. “This way, you can have the amount you need transfer directly to your creditor and not pay any extra fees.”
Extra Credit: Anna del C. Dye
Credit Score: 804
Anna del C. Dye, a new-fantasy author from Salt Lake City, UT, is proud of her long-lasting marriage as well as her financial acumen over the years.
Her strategy: “When my husband got a raise 10 years ago, we opted to add it to the principal in our mortgage rather than our monthly expenses,” says Dye. “We lived on the same income as before and paid our house faster.”
Why you should try it: “Our house is ours and so is everything in it,” says Dye. “Now we can eat out more often, help others, go to the movies more often, and travel around the world. We get to play and have fun when we are still young.”
Lesson learned: “Our culture’s lenient attitude toward debt is harmful,” says Peter Dunn, personal finance expert and author of 60 Days to Change. “If you want great credit, you must develop an urgency to become debt-free.”
Divorced from Bad Credit: Tammie Aaron-Barrada
Credit Score: 789
Tammie Aaron-Barrada’s first husband essentially ruined her credit just by having his name on her cards, and running her into debt. After they broke it off, she was left to claim bankruptcy. The entrepreneur and inventor from Ruffs Dale, PA, has since made rebuilding her credit top priority.
Her strategy: Aaron-Barrada had to made wise decisions to reestablish her credit standing. She took out 90-day same-as-credit accounts to buy new furniture that she could afford, as well as made sure she put utilities in her name and paid those bills on time.
Why you should try it: Aaron-Barrada says having great credit gives her peace of mind, should an emergency ever arise. Building back up to a high credit limit means she won’t be left high and dry ever again, and has a better credit score to show for it.
Lesson learned: “When you make someone a joint-account holder or you co-sign a loan, you become fully responsible,” warns Denise Winston. She recommends checking your potential spouse’s credit report and finding out if he or she owes back taxes.
“Your credit score has the potential to determine the quality of your life,” says Winston. “It can potentially cost you thousands, if not hundreds of thousands, of dollars over your lifetime.”
Are You a Credit Score Wannabe is provided by Experian.com
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10 Comments so far
leave a commentI find it incredibly sad that the “quality” of our lives is partially determined by a number coming from some computer somewhere. If that’s the way its gotta be though, that’s the way its gotta be. I’ve got fine credit, by the way.
One thing that’s interesting…this article doesn’t mention that if you use cash, your credit score doesn’t matter. Another important resource to use is a manual underwrite if you do need a loan. They actually look at your assets and debts, financial records etc, instead of just typing in your social security number and letting the computer decide your credit worthiness.
Don’t be too sad Adam, a credit score can only determine quality of life if we choose to live on credit and buy things we don’t need and can’t pay for : )
Sage advice, thanks for sharing the practical side with real world examples too. We have posted a few articles of our own on understanding and managing your credit. This is information that never gets old and something we all need to be very active with.
Credit scores are worthless and misleading. All it does is reinforce the fact that you’ve been good at borrowing money! If you don’t have the money for something, you shouldn’t buy it. No one ever got in financial trouble living that way! A “real” bank and a “real” insurance company will treat you well as long as you live responsibly. Other than that, you have no argument why you need a credit score!
Credit scores are a useful means of turning all that collected data into a easy to read number. They aren’t worthless or misleading. They are used to gauge the risk of the borrower. If they didn’t have credit scores, their would be less lending, more loan loss for banks and very unhappy consumers.
But I disagree.. A credit score doesn’t determine anything, it only reflects the decisions made by a person based on a mathematical algorithm. If someone has bad credit, they made bad decisions and should learn from them. People want to eliminate credit scores, but they fail to realize the scrutiny that would take its place. If you want a good credit score, get a couple credit cards, put them in a filing cabinet and every year, take it out, buy a 5$ coffee, pay it off, and put it back in the cabinet. In 2-3 years, you will have good credit.
Great advice. I would agree many people are trying to hide behind their bad credit by masking their issues with other purchases. I will pass this along to a few clients who are struggling to land a house they can afford because of their credit situation.
I always see comments about “if you use cash, you don’t need credit.” This is a credit based world.. try getting electricity under your name, a cell phone or even att u-verse without credit history and see what happens. I know people who have had to put down deposits because all they use is cash and didn’t have any credit history built. It’s sad to see that people can’t accept the fact that you need some sort of credit just to get everyday products. I’m not saying you need to have credit debt, you just have to have credit.
Neil,
Credit can be useful to avoid initial deposits for utilities etc. But you said the key word…deposit, you usually get the money back. And even if you don’t, compare those rare situations to the amount of credit card interest that 99% of people pay because they want a “good” fico score and you’re still ahead by far. Ask any wealthy person how they accumulated their wealth. It will almost always have everything to do with living below your means and buying only what you can afford and nothing to do with a credit score. Although, I’m sure there are plenty of bank execs who owe their millions to credit card carriers who paid wonderfully for good fico scores.
I have good credit because i hate the stress of having debts. I think i would rather worry less about bills than have a new flat screen. Seeing a pile of bills on the table gives me an instant stomach ache. I don’t everyone feels the same
Interesting and informative. But will you write about this one more?