September 10, 2015 by Lisa Brammer
Last week, while out with some friends, the subject of credit scores came up. One of the younger members of the group had just bought a new house. She was excited about moving into their new home, but disappointed with the amount she and her husband had to pay for closing costs—over a $1000 more than they had anticipated—due to a recent drop in her credit scores. Now, some of the updates they wanted to make to the house were going to have to wait. Then, another older member of the group said she was glad she no longer needed to worry about her credit scores.
I guess the look on my face said it all, because she went on to explain why: She and her husband, Frank, already had a home—with a low interest rate—which would be paid off in a couple of years, her husband drove a company car and hers was paid off a while back, and they no longer used or even had credit cards any more since they paid all of their bills online and used their bank issued debit cards for groceries and other purchases. (Don’t even get me started on liability differences between credit cards and debit cards, but check out a blog I wrote about that here.)
She looked pretty smug when she finished with her list of reasons. And even though I was very happy for her—in two short years they would be living totally debt-free—I couldn’t help but feel concerned when she told us how liberating it was not to worry about due dates—she paid her bills whenever she got around to it.
The thing is, achieving and maintaining a high credit score is important. My friend may not need credit now, but what about in the future? Circumstances change, oftentimes without warning: What if they end up with a serious issue with their septic system—a home improvement loan might be in their future, or maybe Frank’s company will push for an early retirement—there goes his company car. They might even decide, down the road, that their house is too much for them; most apartment management companies require a credit check before renting.
Let’s say, for the sake of argument, none of these things happen and they never have to borrow money again, there are other compelling reasons to be careful with your credit scores: What if Frank decides to work for a different business (after his forced retirement)? Some businesses still check credit as a condition of employment. Car insurance companies are now known to use a person’s credit score when determining insurance rates. A drop in credit scores could cost you a lot in premiums. (Check out a blog about it here)
Obtaining and maintaining a high credit score is important whether you are starting out, or almost ready to retire. Keep it as a lifelong goal, believe me, one way or another, a high credit score is going to save you money as well as piece of mind.
Founded in 1950, United Credit Service, Inc. is a full service, licensed revenue cycle management and debt collection agency in Wisconsin providing effective, customized one on one management and recovery solutions for our business partners. Visit our website at http://www.unitedcreditservice.com, call 877-723-2902 or check out our YouTube video.