I remember getting my first apartment and needing to turn on the gas and electric. When I showed up with my identification to turn it on I was told I needed a $450 deposit. The reason: Bad credit.
My credit score at the time was 528. I had no real credit history, a school loan that I paid inconsistently, and $200 that I owed for clothing purchased from a catalog. The whole ordeal created stress when there should have been none. The amount of money they demanded was enough to wipe out everything that was wrong on my credit report.
That was my first bad run-in with FICO. And I was determined to make sure it was my last.
Your credit or having a good credit score is more important today than any other time in history. I would go so far as to say the credit score is your other social security number.
I read an article explaining just how serious the credit score has become. The article said that if two people set out to get car insurance, a person with TWO DUIs would receive a better insurance rate than a person with poor credit (629 or below). Think about that.
Poor credit is frowned upon more than the deadly and highly illegal act of driving under the influence of alcohol and drugs. If you have poor credit, on average you are paying $1,300 more annually for your insurance than a person with a 720 score. That sucks!
The tentacles of your credit score have the ability to reach out and touch every area of your life. If you are in the market for a job, a new apartment, buying a house, a car or simply connecting utilities, your credit score is with you to act as an asset or an albatross.
Here are some credit facts to chew on: Sixty-four percent of whites have a credit score of 720 or better, 41% of Hispanics have a credit score of 720 or better. Thirty-three percent of blacks have a credit score of 720 or better.
These statistics tell me two things: 1. Blacks and Hispanics are paying more for everything. 2. Your credit score ultimately stands as a proxy for your race. The statistics play out with startling correlation to the real-world racial climate, as the global majority continues to be denied housing opportunities, loans with decent rates, and continue to have the highest rate of unemployment.
But you can do something about it. You can have Tier 1, A-plus, good credit by being proactive. Get your credit report. Go through it with a fine-tooth comb and fix all of the discrepancies (wrong addresses, different addresses on different reports, different names and misspelled names on the different reporting agencies), dispute the derogatory marks that aren’t yours, and pay off who you owe. The biggest hit on your credit next to foreclosures, bankruptcies, and judgments are having maxed out credit cards creating a poor income-to-debt ratio (spending just as much as you make every month in bills).
It won’t take long for you to master the skills you need to have great credit.
