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Is a Credit Score Really That Important?

Credit Scores are talked about by everyone these days. Parents give credit cards to their children so they can “build their credit” and qualify for  loans later in life. It seems that everyone’s financial actions are based on this 3-digit number! But does that credit score really matter?

My wife and I are striving to live a life with no debt. We go grocery shopping and pay with cash. We purchase Christmas presents and pay with cash. Furniture — Cash. High-end electronics — Cash. Vehicles — Cash. You get the picture. We just don’t use our credit cards anymore (in fact, we cut them up!).

So, by living a life without the need for credit cards, I wonder, “Why should I care about my credit score?”

I wish I could say that I don’t have to, but I can’t.

Credit scores are obviously used for obtaining a home loan. If your scores are low, you may not be able to qualify for the loan that you need. My wife and I aren’t overly concerned about this one because we plan on paying a large downpayment on our next house. Plus, we won’t be living larger than what is necessary – a quaint home will do, and therefore, we shouldn’t need that much money from the bank.

Here’s the one that scares me a little. If I ever apply for a job with another company, chances are that they will run my credit history and use it to get an idea of my moral and ethical standards. If my credit is low, this tells them that I don’t respect those that lend me money (it’s assumed that I’ve missed payments) and I’m most likely not responsible enough for the open position.

For this reason, I might consider using credit cards again, but only after we are out of debt and have gained control of our finances. I think by using, we’ll be able to track our expenses more easily, and will be less prone to overspend. Time will only tell.

So is Your Credit Score Important?

Unfortunately, I have to say, “yes”. This does not mean that I’m going to use credit cards any time soon though. If you are digging yourself out of debt you should still cut up your credit cards. And don’t try to use the excuse that you need your cards to build your credit – by paying your debts, you are already improving your credit!

Also, if you are nervous about your credit score, take a look at an article that I recently wrote, “What Happens to Your Credit if You Cut Up Your Credit Cards?

So, budget your expenses, cut up your cards, and pay for everything with cash. Once you are completely debt-free, then you can consider using that card again.

Credit Cards Money


My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.


  1. First, I applaud your resolve. I know you will get rid of the debt sooner rather than later! My mom has no need for credit as her home is paid off, she’s not looking for a job or to finance anything. Her credit score is irrelevant. But for all others-you made the point!

    • Thank you Barb! Yes, your mom certainly does not need to worry about her credit score, but for the rest of us that currently work, it’s a good idea to keep an eye on it. Once our debts are paid off, we’ll focus on building our credit again.

  2. Yea, even if you have no need for credit, it is still important to maintain a high credit score.

    Here are two examples I can think of:
    1. New Cell Phone – they check you credit to make sure you don’t need to have a deposit
    2. Renting an Apartment – Many landlords use your credit score to judge your payment ability and history

    • You are right on Robert. I really wish we didn’t have to worry about credit, but that’s just how it is these days.

  3. Same thing with car insurance. Makes no sense but your credit score factors in there too. I don’t get charging someone a higher insurance rate because their score isn’t high. How does that reflect their driving habits?!

    • Yeah, it’s crazy. Your ability to get into debt, but still make the payments means that you are a safe driver? The importance of the credit score has really escalated beyond belief.

  4. We don’t have any debt either (but will soon have – shopping for home!) and I never checked my credit score till my bank started providing this for free.

    But now that I *am* in the market for a home, I do end up checking the credit score. Hopefully this habit will die down once I purchase a home! 🙂

    • MoneyCone, you are making me jealous! 😉

      I would love to be house shopping, but we’re not quite ready financially. By the time we are ready though, my credit score should only drop slightly. No biggie.

  5. Take your time – you have plenty of time to live your life and make a home purchase. You are so young Derek. you have lots and lots of time! keep saving and paying down bad debt – keep the good stuff – will help when you go to get the mortgage. As well – the mortgage industry has changed so much check with a broker now to see what is the best way to go about it – I do know the more $$ put down can be better in the long run – sometimes – sometimes better to go with a lower down payment, and keep the cash to make changes on the home that will suit you and your wife. Then with the extra income – start paying extra on the mortgage when you can – therefore you have the option to or not to pay extra! emergencies come along all the time!

    • Yep yep. We’re just exploring some options. You never know when you’re going to find that great deal! 🙂

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