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I see many postings from individuals who seem to be overly obsessed with their credit score. These people always talk about their crappy credit, their unpaid debts, their woes with creditors. They always sound like victims.

Whatever happened to paying cash, living within your means, saving money, having money before you spend it?

I see so many people spending money they don’t have to impress people they don’t like.

Your thoughts?

9 Thoughts on Why are people so obsessed with their Credit Score?
  1. Reply
    kindi78
    December 27, 2012 at 10:38 pm

    I think in part you are right. Some people don’t spend their money wisely, go into bankruptcy and then complain about their credit score.
    Others however get divorced for example and end up not having any money due to that. I’ve seen people lose everything. For those people that try to get back on their feet, it’s almost like a little progress meter.

  2. Reply
    spifiman1
    December 27, 2012 at 10:53 pm

    I know what you mean. It’s like people think score is everything in the world.

    In our society good credit is a must have if you want to be able to purchase a home, auto, boat or get a personal loan of any kind. You can’t even rent a car or book a hotel or plane reservation without a credit card.

    What people don’t understand is that a good mix of overall credit types is actually more important then score alone.

    Your right about living within your means, saving money and paying cash. Everyone should do this no matter how much money you make.

    If people would just act responsibly with their credit, use it only when you need it and pay as agreed, there would be no reason for anyone to worry about their score.

  3. Reply
    northstar40601
    December 27, 2012 at 11:51 pm

    (1) People are partly obsessed with credit score because financial guru Suze Orman constantly talks about how important it is on her television financial talk show. In her books she constantly harps on how extremely important it is.

    (2) People are also obsessed with the score because they frequently get turned down for loans because they keep trying to borrow/get more money and are told that a big reason for denial is their credit score is poor.

    (3) People are also obsessed with credit score because if they watch TV commercials, there are lots of companies that want to “Fix” their poor credit score.
    I personally follow a lot, but not all, of the advice of financial talk show host Dave Ramsey ((www.daveramsey.com)

  4. Reply
    JOHN R
    December 27, 2012 at 11:57 pm

    sometimes things happen and u have no choice but to go into debt.

    A thought about your future: Have u put money away for retirement? Bought a burial plot so your loved ones dont have to fork out 5-10 thousand dollars at the time of your demise. Do u have children, and an education fund set up for them.

  5. Reply
    Smoovy Loco
    December 28, 2012 at 12:12 am

    Everybody’s made excellent points which I don’t want to rehash again, so I’ll just say this: It’s human nature to be competitive, to “keep up with the Joneses” if you will. Unless you’re born into money, into sports, entertainment, or even illegal means, you won’t have that type of money to flat out get what you want. The “Average Joe” (like myself) that wakes up every morning to go to their respective 9-5 to survive, just doesn’t have it like that. So in essence credit is necessary. To me, it should be used as a tool to maintain, and in some cases improve the quality of life. What gives credit a bad rep is when people have “eyes that are bigger than their stomachs” and try to live outside their means. When I was an credit analyst and underwriter, I saw this time in and time out. It’s hard enough just living “C2C” (check to check), but throw a credit card or two, or a few, or even several in the mix, it begins a neverending perpetual cycle. With how you can get credit so easily sometimes it’s real easy to blur the lines and not be able to delineate between the two. Some even take it to the next level to use credit as a lifestyle substitute instead of a supplement, living off their credit cards for years, and once it gets out of hand wave the white flag of bankruptcy. Dave Ramsey has his views about not using credit, which I repsect fully, but I disagree, while Suze Orman has her view that you have to have excellent credit which I agree to an extent as well. I take points that both have made and incorporated it into my own lifestyle to maintain a sense of balance. So in closing I say this it’s really up to you if you want to save money and pay cash for everything, there’s nothing wrong with that, hey especially the fact that everything would be paid for free and clear, but in the same token, if I’m responsible and “know the game” and can stay “ahead of the game” with credit, I don’t see where there’s anything wrong with that.

  6. Reply
    iceman
    December 28, 2012 at 12:52 am

    Mainly because lenders have become obssesed with it…

  7. Reply
    Navy Sailor - GAI
    December 28, 2012 at 1:27 am

    Exactly, I agree with you. I think it would be ok to be sort of obsessed to make sure your credit score stays good by making sure nobody is using your identity, but that doesn’t seem to be the case here. Crazy credit people want more and more credit so they can get in deeper and deeper over their head in debt. The rest of us would just like to maintain the 800+ score to buy houses and large ticket items that appreciate in value instead of the new pair of shoes at the mall or dinner at Outback. We only use our credit card to earn money towards our twins 529 college plans and they get paid off every time we charge. Not even at the end of the month, at the end of the day. If the credit card company is dumb enough to still give us rewards even though they never make a cent off of us that is their problem not ours. Too bad Americans are swamped by debt. Life was better when cash was king.

  8. Reply
    heybulldog
    December 28, 2012 at 2:23 am

    Dave Ramsey calls it “Worshiping at the alter of the almighty FICO score. It’s crazy. You have to stay in debt to keep a good fico score. So you can borrow money and stay in debt.

  9. Reply
    Beetle Becca
    December 28, 2012 at 3:15 am

    My thoughts, Steve P?

    The reason so many people are “obsessed with credit” is because in this day and age, credit means a LOT. Your credit score determines if a landlord will rent an apartment to you, what your car insurance rates will be, and sometimes even whether or not you will get hired for that nice job position you applied for! So for people that have bad credit, it can sometimes be hard to qualify for things that are vital for everyday life, e.g. a place to live or affordable insurance. True, these corporates/creditors are “people we don’t like” or even know for that matter, but they DO control things like where we can live or (unless you have the full amount in cash) what kind of car we can drive!

    Welcome to the 21st century, the age of computers…this makes it easier and quicker for lenders and other people to obtain credit information. It isn’t as hard to obtain credit reports these days. So now a lot more people check credit, sometimes even individual people who rent out very small properties(such as a house converted into 3 apartments). It’s not just the big corporations that make lease offers contingent on one’s credit.

    So if these people have bad credit and they want to fix it, that shows responsibility and motivation on their part. It also shows that they are ambitious and eager to work towards being able to borrow money for nice things such as a mortgage, car loan, or simply to qualify for a humble apartment. Being constantly reminded that they have “D” credit, or that their credit is “inferior” to the average US credit score of 675, or being hounded by bill collectors, is going to just make them feel more upset, insecure, and exasperated about their credit.

    The reason these people sound like victims? Some of these people ARE victims…victims of identity theft, a medical illness/accident that resulted in $ 1,000s of uncovered medical debt that is now being sent to collections, or being a nice naive person that got financially taken advantage of(e.g., cosigning a car loan for a girlfriend, then the girlfriend quietly defaults on the loan and ruins your credit). Some of these people made stupid credit mistakes due to naivety, lack of knowledge, or being too trust of others that financially took advantage of them…so even though it was their fault(although not their intention), they still want to feel like the poor victim. Even people who’ve legitimately mucked up their own credit sometimes feel like helpless victims if say, they cannot obtain an apartment lease to save their life and they are worried about where they will end up living!

    Whatever happened to paying with cash, you ask?? It’s still around. But these days, it’s not good to only rely on cash. For one, it’s much easier for cash to get stolen, since stolen cash is generally forever gone, whereas you are not responsible for paying charges incurred on a stolen credit card. Also, it’s important to establish credit history so that you can qualify for apartment leases, a mortgage, affordable car insurance rates, etc. Sometimes having “no credit” looks just as bad as having “bad credit.”

    Another theory about why people are obsessed with credit scores, relates to the whole letter grade system that creditors often use. It varies from lender to lender, but lenders assign grades from “A” to “E” to rate a person’s credit worthiness. Letter grades just like the ones that were used in school! As a child, did you ever have any memories of being whipped, grounded, or humiliated because you got a bad grade in school? Do you want to remember these things?…Of course not! That “grade” mentality can make a person feel very insecure if he/she was always pressed to get good grades in school, and then later gets a “credit grade” of a “D”. My belief is that the letter grade system is psychologically imposed on consumers to scare them into paying their bills.

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