What's the big fuss about credit?

Question

I just became an adult like two years ago and I'm still in college and not in "the real world" yet, so I never really cared. How does this whole credit score thing work and what's the big deal about it? What is it and why the hell does it matter? And what will I need a good credit score for anyways, I mean, I don't plan on taking out any loans in my lifetime, I plan on moving into a city and living without a car, I have a prepaid cellphone bill, I don't plan on ever getting a credit card (I have a debit card from my bank), I don't plan on getting married. So what am I ever going to need a good credit score for? The only thing I can think of is for when I get my own apartment, but still, I'll just put a security deposit down, I don't mind.

Answer 1

You are always judged in this financial world by your credit score. It shows the world that you are responsible, if nothing else. You may someday want to buy a house. The better your credit score, the lower your interest rate will be. A BAD credit score, say below 600, will cost you a LOT of money whenever you become a borrower and it just makes good sense to keep your score as high as possible. Everything you do financially in your life, another 50 years or so, will be reflected on your credit score. Pay your bills on time, don't be late, don't have anything reposessed. Don't be so confident that you will never need to borrow money. Bad assumption !

Answer 2

You might change your mind on this someday.

Do you want furniture in your apartment? You might need credit before the furniture store will open an account for you. Unless you plan to shop at garage sales!

Do you ever plan to rent a car? A lot of places won't do it with just a debit card unless you pay a massive deposit. Sometimes $500 even. Ok so it's just a deposit.. but you might not want that money placed on hold status right before you go on vacation.

Other things can use your credit too like the cable company, the phone company. Even people who rent apartments run your credit!!

You might have credit and not know it. You can get 3 *FREE* credit reports a year. I don't do mine at the same time I do one every 4 months. You will want to do this in case someone ELSE is using your credit. The link below is a site that the GOVERNMENT made the credit companies put into place! This isn't one of those tricks like you see all the banner ads for.

Answer 3

Chances are that you don't think the same way now as you did when you were 10 years old, or 15 years old. The things you wanted then are probably a little different from what you want now, and that process is just going to continue as you get older. You may (or may not) change your mind about a lot of things. Good credit may not mean anything in normal times, but it can come in very handy in an emergency... or when you need to rent a car.

Good credit, or what translates out to a good credit score is built up by establishing a small amount of debt that is routinely paid off. Creditors thrive on financially enslaving folks and getting them into a position where they can only pay minimum payments.
This is to their advantage because you end up paying a lot more on your debt because of interest charges.

But the upside of playing the game, is that if you pay off your debts immediately, "they" don't get any extra money and your credit rating goes up. What that means is that if you ever wanted to take out a loan for anything, or have to carry a balance on your card because of sickness or an accident, you would be paying the least amount of interest possible because the lowest rates are offered only to good credit risks.

We've built great credit over 30 years and get the best service and deals on any major purchase because of our financial track record. If we ever really needed it, we could tap into a huge line of credit. We won't probably, but it's a good feeling.

Answer 4

You may not NEED credit now but there will come a day when you wish you had it, at least as a reference. Go to your bank, take out a small personal loan, ($500.00). Deposit that money into a savings account and simply pay back the money. Later, use your bank as a reference for good credit.

Answer 5

Unfortunately, most people now days before they hire you does a credit check, and if you want to rent or lease a place they do a credit check. Most nice places want let you rent without credit even if you have a security deposit.

Answer 6

It would be wise to develop a good credit rating even if you don't intend to use a credit card. For countless reasons, it will help you in today's economic environment.

Answer 7

I love it! A man with a plan!

But what if......

People don't ever plan on having an accident, but the get insurance just in case.