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8 Reasons Your Credit Score Matters…and How to Improve It Quickly

credit score mattersYou’ve heard me say it many times here at – having zero debt is the absolute best way to live! Buuuut, having no credit score certainly isn’t. Believe it or not, your credit score matters – for many reasons actually. No matter how many times Dave Ramsey tells me otherwise, I doubt I’ll ever believe him…

8 Reasons Your Credit Score Matters…and How to Improve It Quickly

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Liz and I live a no-debt lifestyle. We have no credit card debt, car debt, or even house debt (we paid off our home in 2014). After living a no-debt lifestyle for almost four years now, we certainly wouldn’t have it any other way. However, even though we don’t plan to dive into debt again any time soon (or ever!), we’re still careful to build and maintain our credit scores.

“Why?” you might ask…

Well….for at least eight reasons!! …as if one isn’t enough!

Related: Top Bonus Rewards Credit Cards

Top 8 Reasons Your Credit Score Matters

Here’s the list. And I bet this will get you thinking a little bit more about your credit score!

1) Rent an Apartment

Dave Ramsey says this often:

“You know, I’m a multi-millionaire. But if I wanted to rent an apartment at the complex around the corner, they wouldn’t accept my application because I don’t have a credit score… I could buy the whole fricken complex, but they won’t allow me to rent there.”

His point is that credit scores are stupid and aren’t at all a real indicator of your wealth. I get that. But what if you did want to rent an apartment? Wouldn’t it be important to have a solid credit score? Ummm, yeah, most likely.

Without a good credit score, you’ll either:

  • have to pay more in rent each month, or
  • you’ll get denied and won’t even be allowed to rent there!

Hmmm…sounds like a credit score is pretty important to me…

2) Rent a Car

If your credit is lousy or if you have no credit at all, it can be difficult to rent a car.

Think about this. You head out on vacation, fly down to Florida to chase your winter blues away, and then you step up to the rental car desk. You politely ask for a rental car – whatever they have, you’re not picky. They ask for a credit card…you don’t have one because you either have terrible credit or no credit at all. They shake their head and tell you that they can’t give you a car without a solid credit score. It’s their policy.

Well that pretty much ruins your vacation!

If you happen to have money in your checking account, they might accept a debit card with a large deposit, but there’s no guarantee of that either. Yup…your credit score matters.

3) Car and Home Insurance

According to Lance Cothern at, there’s actually such a thing as an “insurance score“:

“Insurance scores are numerical scores created by insurers to predict the likelihood that you’ll have an accident or fill out a claim. The scores are calculated from information on your credit reports. Car insurers use auto insurance scores as one of many factors to determine how much you’ll pay for car insurance.”

So guess what? If you have bad credit, it is assumed that you’ll be more likely to file a claim or get into an accident, which of course means that you’ll be paying more for your car and home insurance.

Are you starting to understand that your credit score matters? Yeah…I hope so!

4) Signing Up For Utilities

Your utility company is just like any other business out there. They provide you with a product, and they’d really like to make sure they get paid for it so they can keep the lights on themselves!

To make sure they don’t get stuck with your unpaid utility bills, they’ll pull your credit report. If they see something that worries them, they’ll charge you an upfront deposit. It’s not a huge deal, but if I had the choice between having good credit and letting the utility company take a few hundred bucks from me for a year or more…I’d rather just have a solid credit score.

5) Signing Up for a Cell Phone Service

I actually had this experience when I was in college. I decided that I wanted a cell phone, so I simply walked into my local Sprint store, got signed up, picked out my phone, and then I was told that I would have to pay them an additional $250 for the first year of the contract. Either that, or I would need a co-signer (you know…someone that actually had credit).

It was an additional hassle and I was annoyed, but I really didn’t have much choice since I had absolutely no credit history – I paid the $250. Thankfully today I have a credit score in the low 800’s and I’ll never have to worry about this again.

credit score matters

6) Cable/Internet Service

I didn’t ever realize it, but quite a few TV and internet services will pull your credit before taking you on as a customer.

  • AT&T
  • Comcast
  • Cox Communications
  • Time Warner Cable
  • Verizon

All of these companies, in some form or fashion, will pull your credit to see how likely you are to pay your bills. If you have bad credit or no credit, you’ll probably get charged an additional fee to get started. Either that, or you might get denied entirely!

7) Getting Hired for a Job

It’s a common myth that an employer can check your credit score – this just simply isn’t true. However, they can check your credit report, which has much of the same information, just not your 3-digit credit score. So…if you have very little history, or if you have a bunch of unpaid bills that are showing up, then you might be less likely to get the job – especially if squeaky-clean little miss Suzy is going up against you with a shining report.

Want to get hired for that perfect job? You might want to start caring about your credit score.

8) Buying a House

This is the biggie. Yes, as Dave Ramsey says, you technically can go through Churchill mortgage and get a loan if you have no credit score. But, you know what? Even if you stop using all your credit cards, pay off your car, and get completely out of debt, there’s no guarantee that your credit score goes away (as Dave sometimes claims). So, if you currently have a terrible score and simply try to get rid of it…you might just be stuck with that terrible score for years…

If your credit score is under 620, chances are that you won’t be buying a house any time soon. Instead of simply trying to make your credit score go away (which may never happen), I would suggest that you do everything in your power to improve it.

Related: Best Credit Cards for Good or Excellent Credit

Your Credit Score Matters – It’s Time to Improve It

So your credit score matters…I think we’ve proven that. But what can you do to improve it?

  • Buy a brand new car?
  • Purchase furniture on credit even if you have the cash?
  • Go out and rack up credit card debt on random clothes and electronics?

Ummm…nope. These would be really stupid ways to build your credit actually… Why? Because you’re essentially buying something you don’t need that’s going to tank in value like a rock after you buy them.

There are much better ways to improve your credit score.

According to, there are five different categories that will impact your credit:

  1. Payment history: 35%
  2. The amount you owe: 30%
  3. Length of credit history: 15%
  4. New lines of credit (some is okay, too much is bad): 10%
  5. Types of credit used: 10%

So which of these categories can you actually impact in the short term?

  • Definitely not payment history, and
  • Not the length of credit history

What you can impact is the amount you owe, new credit, and types of credit used – so roughly 50% of your score can be impacted in the near-short term. Not bad! So since we’ve established that your credit score matters, what are some of the best things you can do to improve it?

1) Get Current

One of the worst things for your credit is to have overdue, unpaid balances. I mean think about it, if you were considering loaning money to a friend and two people approached you, telling you that they also loaned money to that friend and he still hasn’t paid them back…It would make you think twice about loaning him money, wouldn’t it? That’s why your credit score drops so much when you have late payments.

If you want to improve your credit score, start by paying past due bills and debts to get current.

2) Pay Down Your Balances

After you get current with your debts, the next major step is to start paying those balances down, and FAST!

It’s important to have some debt payments on your record to build up some credit, but you don’t want to borrow too much (in my experience, a simple low-limit credit card is an effective way to build credit). Everything else can be paid down and paid off!

Want to make the biggest impact in the shortest amount of time? Use this free debt snowball tool. You can list out all your debts smallest to largest, enter your likely payment amounts, and see exactly how long it will take you to pay them all off!

3) Correct Inaccuracies on Your Report

While you’re paying off your debts, head to Credit Karma to get a free look at your credit report and what’s on it. If you notice that there are debts listed that you don’t owe, call the company and get the error straightened out! Inaccuracies can lead to huge reductions of your credit score.

4) Get Some Guidance

It’s always hard to manage something like this on your own. ScoreShuttle is a cool service I discovered recently that can help you manage all your credit score objectives. They want to help you improve your creditworthiness, and do it by helping you stay connected to your goals.

They’re not going to con you into a consolidation loan or screw you over by lying to credit card companies about your debt (like some debt “fix-it” companies out there…). They just want to give you a road-map for your future credit success. It’s a pretty cool idea – I kind of wish I had thought of it…

Your Credit Score Matters – It’s Time to Take Control

No more pointing fingers.

No more burying your head in the sand.

It’s time to look at your credit score straight on and come up with a way to fix it!

  • Get current on your debts
  • Pay down your balances
  • Get inaccuracies straightened out
  • Get a buddy to guide you through the process

So how about you? Do you finally realize that your credit score matters? Are you ready to improve your credit?

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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. I think the same thing when I hear DR talk about no or zero credit score. I know it is a necessary stance on his part per his teachings and it’s not “bad advice” just completely impractical. Even if you were to close all your accounts, get your credit score to zero, and be approved for manual underwriting on a mortgage, you are going to have a credit score again as soon as you get the mortgage loan. Additionally even if you could find an apartment complex or landlord that would rent to you with proof of funds vs running credit score, you can’t prevent them from reporting your good or bad pay history to the bureaus and thus getting a credit score again. Good credit is a necessary evil in today’s society and I wish DR would implement a responsible credit management tool into his baby step system.

    • Hear hear! Well said Craig!

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