Ok, so you’ve been late on a couple of credit card payments and your Baja 35 Outlaw was repo’d last year. Naturally, you’re a little bummed that your credit score is circling the drain and you can’t get a loan for that cute little bungalow you and the missus have been dreaming of. Or maybe you can get financing, but at an interest rate that would make Tony Soprano blush. It kind of weighs on you, pretty much all the time.
Chris Peplinski is bummed about his credit score too. Not because his score is lower than a snake’s ankles. No, his FICO is 813 which would get him a loan for the bungalow, the Baja 35 Outlaw, and probably a Pagani Zonda F to park in the driveway. Chris wants his score to be a hypothetically perfect 850, and is willing to spend way too much time and effort chasing this particular white whale.
Apparently, he has a lot of company according to this recent article in Money Magazine.
People have all kind of hobbies, but this one seems particularly, um, nuts to me. First of all, once your credit score in the upper 700’s you are aces and will be able to access credit on the best terms available. There is really no practical reason to obsess over a few points one way or another. Secondly, Mr. Peplinski admits that he and his wife took out a car loan they didn’t need, paying about $100 in interest, just to fine tune his credit mix. And monitoring your score more or less continuously is going to costs $50 a year or more.
Hello? A good credit score is supposed to help you save money not spend more.
What mostly bothers me about this is a presumption by the obsessed that a good credit score makes you a good person, and so a better credit score makes you a better person. Look, it’s important to your financial health to use credit wisely and you should do everything in your power to maintain a good score. It’s crucial in everything from obtaining a low-rate mortgage to your eligibility for insurance or employment.
But really, beyond a certain point nobody cares. The math geniuses at Fair, Isaac and Company don’t care. And I guarantee your lender will not put a little gold star on your file if your credit score is 850 rather than, say, 798.
So maybe think about a new hobby.
[If you are struggling with debt or are curious about what goes into your credit score, myFico is a good place to start.]
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