Why FICO Scores Are Important for Non-Borrowers
Everyone knows that having a high FICO score is key to getting low interest rates and can save you thousands of dollars. But what if you don’t need to borrow money? Financial guru Dave Ramsey calls the FICO score an “I love debt score,” and suggests manual underwriting for mortgages.
I maintain that there are at least five good reasons why you need to have a good FICO score, even if you never borrow money:
1. Renting an Apartment. Many landlords check credit reports now, and a low or nonexistant FICO score means you might be required to hand over a hefty deposit, pay a higher rent or get a cosigner, if you’re not flat denied.
2. Getting and Keeping a Job. Some industries now check applicants’ credit reports prior to offering them a position. This is especially true for financial, military and other government positions. Your credit score can also be checked regularly after you are hired as a basis for retaining employment.
3. Obtaining Low-Cost Auto and Home Insurance. Insurance companies typically use data from your credit report in determining your rates.
4. Getting a Cell Phone Plan. Yes, you can get a prepaid phone or a “deal” from one of those “we don’t check credit” places, but the main carriers check your credit and will deny you if they don’t like what they see.
5. Turning on Utilities. If your score is bad, you might have to pay a deposit, get a co-signer or even pay higher rates.
So, boys and girls, keep that score up!
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