Quote:
Originally Posted by John 070
I agree, the only thing it does is to ensure you get a loan, and at the best rate.
Both my wife and I have 880+. Does it mean I can get a M3? Yes it does. Does it mean I have one? No, it does not. Does it mean I can afford one? Negatory.
The way I see it, one place you can overextend within reason and justify, is on your home. So having a high FICO will enable banks to overextend to you, at the lowest rate. Other than that, if you deal cash only, who cares about your credit...
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There's other benefits to having good credit.
How credit affects you:
1. Affects your car insurance rates, lower your credit, higher your premium.
2. Affects your ability to get a cell phone plan. People with poor credit will have to pay a high deposit just to qualify for a cell phone plan.
3. Renting a condo, home or apartment? Any landlord worth a damn will pull your credit prior to offering you a lease. Poor credit? Probably not going to be extended a lease.
4. Every job I've ever had has required a credit check. I was almost declined employment due to an error on my credit report. I never cared much about checking my credit until that happened. Got it fixed and got the job. For government workers and contractors, most positions require security clearances. Biggest reason to be denied a clearance? Poor or lack of credit.
But yeah after almost being denied a job because of an error on my credit report, I began paying attention to it much more closely.
Your credit score tells not just lenders, but potential employers, the government, and landlords a lot about you. Working with sensitive information? Poor credit score reflects irresponsibility and a habit of poor decision making and a probability that you may be inclined to sell sensitive information for money to competitors.
People with good credit scores tend to be smart enough to know that having good credit doesn't mean you should over leverage yourself....if they did...they'd end up with poor credit scores anyway. Besides, a lender isn't going to give someone who makes $50k/year and no other assets a loan for a BMW M6 Gran Coupe. Your credit score is merely an indicator of how well you manage debt, the overall amount of credit you receive is a function of your job, your income, and the your total net worth.
Example? My brother is 23 and bought a new car last year, a 2014 BMW 328i. His credit score is excellent and he was initially denied credit. Why? Because his credit history only reflected managing credit card debt well. They initially wanted him to either get a cosigner or put down $3,000 (which he didn't want to do since it's a lease). The dealer worked with BMWFS and got him approved though.