Why the Focus on Credit Score?

Here is an excellent post on credit scoring by my blogging colleague, Gene Melchionne of Connecticut, on Money Heath Central.

How many times have you heard, “What is your credit score?”  Or someone talking about how to keep your credit score up?  Or keep it from going down?  Or read an article about what makes up your score?

Why do we care?

Americans like to reduce concepts to numbers. We do it in sports; number of games unbeaten; batting averages, etc.  We do it in the economy; stocks increasing on the Dow Jones , the unemployment rate.  We do it in cars, miles per gallon or horsepower.  We do it in health; blood pressure, body mass index.  It is easy to compare on number to another and decide which is better.

Somewhere, somehow, we were sold on the idea that a good credit score is important.  And then the idea was sold to others so employers think a good credit score is an indication of a good employee and insurance comanies think a good credit score is also somehow a good insurance risk.  Like somehow paying the minimum payments on your credit cards everymonth somehow makes you a good driver.

Now the credit score is taking on the important task of measuring self-worth.  If you don;t have enough debt and enough monthly payments to worry about, then you just aren’t a success.

The real truth is that you are better off without debt.  If you can pay off your bills, then you can’t get into financial trouble.  If you live within your means, you will have the means to live.  If you want something, pay cash and if you can’t pay cash then save up to buy the thing you want so bad.  It will feel even better when you do get it because you earned it.  That will feed your self-worht more than anything. If an employer can’t see your worth as an employee based on your character, then you don’t need them.  While you need insurance for some things, you can shop around.  There are many companies who will take your business.  Don’t be a number, be you first and don’t focus on your credit score as measure of your life.

February 16, 2011 By Gene Melchionne
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