Credit Scores Matter… Even for Non-Borrowers

Credit Scores MatterFinancial experts often refer to the importance of credit scores, and for many of us, credit is an important financial tool that impacts our day-to-day lives. It’s a commonly discussed topic financial blogs, TV and radio talk shows But what about the millions of Americans who no longer need, have never needed or haven’t reached a point in their life where credit is necessary? Well, the simple answer is, credit does matter even if you don’t plan on borrowing now – or in the near future.

Unexpected Life Changes

One reason non-borrowers boast that credit doesn’t matter is that they’re convinced that they don’t need it. “Who needs to borrow money? I’m completely self-sufficient!” But time has a funny way of altering one’s plans. The future often brings unexpected changes and good credit score may be required – marriage, a new business, kids, etc. Neglecting to establish one will mean that dreams for your future will be put on hold until you can prove your credit-worthiness. Credit impacts areas of life that you may not be aware of:

  • Mortgages, auto loans and other types of personal and business financing is
    dependent on good credit.
  • New employment or a job promotion may be tied to your credit rating.
  • Most insurance companies evaluate your credit to determine premiums.
  • Student loans from banks or private institutions use your credit history as a factor in determining eligibility.
  • Landlords review credit scores as qualifiers before agreeing to lease an apartment.

Don’t risk losing the opportunity to put your dreams into action, start building your credit history today. If you have a cell phone, lease an apartment or pay for utilities, you may be building your VantageScore. This relatively new scoring system tends to be favorable to consumers with limited credit, but it’s not used by most lenders. More traditional activity, like credit cards, loans and mortgages are needed to improve your FICO score. The easiest way to get started is to open a credit card account, either on your own or with a co-signer. Manage it well, and it will eventually help you get approved for a home mortgage or car loan, if you ever decide you want to pursue one in the future.

Retirement – A Settled Life

Perhaps you’re a non-borrower at the other end of life’s spectrum. You’ve lived life to the fullest, you don’t owe anything and are living on a pension with a nest egg tucked away for emergencies. Older Americans are not immune to crisis situations that require borrowing and a good credit rating. What makes their status particularly difficult is that being on a fixed income may make it more difficult to be approved for emergency credit. This is where an excellent credit score may tip the scale on your behalf.

Unlike new credit customers, many older Americans have built good credit
histories but need to maintain it for unexpected emergencies.
It won’t require additional loans or credit lines, but a conscious effort to keep your current accounts open and active. Inactive accounts may be closed by the issuer and lower your credit score. Using each of your credit cards for a small purchase from time-to-time will be sufficient activity to keep your accounts active. This way, the amount of available credit will remain high and balances will be kept low, demonstrating your continued ability to manage and repay your debts.

Credit Matters to Everyone

No matter what stage of life you’re in, credit does matter. Know and understand your credit score to improve your chances of getting approved for emergency financing – if and when you need it. Review your credit reports at least once each year and look for errors that may inadvertently lower your credit score. By federal law, you are entitled to a free credit report once a year from each of the three credit reporting bureaus: Equifax, Experian and TransUnion. To get a copy, go to or call 877-322-8228.

* More about credit? Visit our Credit Guide for additional information…


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