Credit! Badmouth it all you like. Go ahead and cut up all your credit cards. Abstain from the credit economy for as long as you possibly can. Denial can be fun sometimes. But sooner or later, there is going to come a time when you need to buy something that costs more than what you have in your bank account. When that time comes, you are going to need to know something about your credit score. In a country like the US, this will likely happen many times over the course of a lifetime. We live in a consumer society.
At such times knowing your credit score is important. More to the point, what you need to know at such times is that your credit is good. If it is not, then you need to know your score in plenty of time to do some serious credit repair. Your credit score is there to inform you of the problem in time. There are times in your life when you simply cannot afford poor credit. Credit repair can also help clean up the damage left behind by identity theft.
As promised, here are five random situations when your credit score really matters:
Buying an automobile
One of the first encounters a person has with their credit score is when they go to a dealership to purchase their first automobile. Unless your credit score is at a certain level, many dealers will not even spend time with you. They have a series of innocent questions that help them pre-screen you for their best sales pitch. They want to make sure you are not just wasting their time with champagne dreams on a beer budget. Not every dealership will do business with just any person with a job and a signature. If you have your heart set on a new Honda, you might want to know your score. This is especially true if you want to lease. There is a reason why the commercials all mention “well-qualified applicants.”
The real challenge is not getting a serviceable automobile. People with poor credit drive cars all the time. The challenge is getting the car you want at terms you can live with. The lower your score, the worse your terms will be. A wealthy person walks in the showroom and drives off with the flagship vehicle with a lower monthly payment than you will in a 5 year old mid-range car. It seems wrong, and probably is. But that is the way the real world works. It all comes down to credit worthiness. You will have to pony up more for your used car than another person with better credit for her new one. It’s a harsh lesson.
Getting married
Debt is one of the first realities of married life. Money will be one of the first and most serious challenges to the new marriage. Fairytale weddings are not actually bought and paid for by fairies. For the most part, they are paid for by the new couple. Outside of story books, few brides come with a dowry. That Downton Abby style wedding you were wanting is going to cost someone a fortune, most likely you.
Here is the truth about those types of weddings: Even the doctors and lawyers of the world cannot afford them. You don’t have the money to really do it right. This is an unfortunate time in your life to discover that your credit is not all it was cracked up to be. This is one occasion where knowing the score will make all the difference in a beautiful wedding you can actually afford, and a magical wedding that will haunt you for the rest of your marriage.
Twins
Sure, it took a while. But you finally decided that now is the right time to start a family of your own. You have read all the books, watched all the videos, listened to all the advice, and most importantly, saved up all the money to do this right. The only thing you didn’t consider are the words coming out of the doctor’s mouth: twins!
This is not a simple matter of buying two cradles instead of one. This is an exponential increase in everything except income. The new mom is going to need more than twice as much help. Your new home might require an extra room that was not in the budget. That sensible car might not have quite enough room for two baby seats. The happiest moment of your life also happens to be the most expensive. …And nobody is ready for it.
At times like these, the love and support of friends and family are just not enough. What you need is crazy strong purchasing power. Like the stereo from your freshman year of college, you need a credit score that goes past 11; 1,100, that is. The last thing you need is to be surprised by a less than perfect score.
One way or the other, you are going to find out the truth: you need to know your score long before emergencies come knocking. It is not only critical that you know your score, but that you monitor it. That way, when things start going South, you will know it right away, and be in a position to take corrective actions before things get out of hand. Monitoring your credit score is a little like keeping fresh batteries in your smoke alarm.
