Credit Score Meaning – Why Your “Adult Report Card” Matters!
I’d always loved school, but…
I always had mixed feelings about report card day. There were times that I was stoked to show my folks what a brilliant little
jackass person they’d raised. There were other times that I was sure my parents would disown me for not bringing home what they thought were appropriate grades (in hindsight, they were right to be upset). I graduated high school in spite of myself, and went off to college where the grades were very much on me; no Mom and Dad to push me along. And when I was finished with college, I was stoked to not have to deal with another establishment where I was to be graded.
Today’s topic is all about your credit report and credit score meaning. And while some might think that this is a dry topic, maintaining a good credit score is the single greatest cost reducing tool you have. Tweet This!
What Is A Credit Report/Score?
Your credit report is a document that contains lots of information by which several people will judge you. They will use this information to exclude you from social gatherings, including but not limited to shindigs, hootenanny’s, cocktail formals, sexy parties, and your Uncle Bubba’s famous 4th of July BBQ. They will use it to make fun of you behind your back, to talk about how their credit score is higher than yours, and to explain how their Dad can totally beat up your Dad.
K, not quite.
But your credit score is a way for you to be judged? “Judged by whom?” you might ask. Well, very simply put, the information contained in your credit report is going to give lenders lots of insight into how reliable a borrower you are. This information is then taken and put into a special formula (the secrecy of which is somewhere between the formula for Coke and the blue meth from Breaking Bad), and a number is spit out. This number is your credit score.
When Will You Use Your Credit Score?
There are going to be multiple times throughout your life that your credit score is going to be used, none of which will be at a bar picking up a chick. However, if you’re trying to pick a bank for a home loan or business loan, a high credit score will get them more randy than a sailor at a strip joint. Check out the following infographic for more, well, information. Duh.
What Is A Good/Bad Score?
In the spirit of making sure this sticks in your brain, let’s list these scores a little more creatively, shall we? Keep in mind, the Fair Isaac Corporation (the guys who spend their days calculating and changing your score) have score ranges from 300 – 850. I’ll describe the scores as the bank would see them if your bank/lender were trying to pick you up at a bar.
Excellent Credit 750+ – This is the hottest of the hot. If you’re at a 750+, the bank would be buying you drinks all. Night. Long. A 750+ has got legs that go on for days, an ass that won’t quit, and a supple yet refined bosom. Their face has all the right proportions, and leaves the banks convinced that they have to be a model (for the feminist twist, a 750+ is Channing Tatum’s abs, a running back’s ass, Ryan Gosling’s gaze, and Nicholas Sparks’ literary prowess). If you’re a 750+, banks will be coming after you like Robin Thicke in a music video.
Good Credit 700-749 – These babes/dudes are smokin’, but they’re not quite where the 750+’s are. Banks would be stoked to take you home, but they’re not going to talk about that night for the rest of their life. Don’t get me wrong, the “Good Credits” still come from great families, probably went to UVA, Northwestern, or UCLA. You clearly take care of your body, but maybe are carrying a little bit of post-college weight, or are a little too focused on your career. But banks still think your great, and are willing to send a couple drinks your way to see what the rest of the night might have in store.
Fair Credit 650-699 – You know what? In the right dress/suit, “Fair Credits” can do pretty well for themselves. Are they going to turn heads when they hit da club? Nah, bruh. But they can still have kickass personalities, and be a good time. They’re not chiseled Greek gods, but more of a Michael Cera/Melissa Rauch thing. They’re cute, but there are definitely prettier fish in the see. Banks will ask you to Netflix and chill if you’re around, but they won’t be breaking down your door to see you.
Poor Credit 600-649 – Yikes. If a bank see’s a “Poor Credit” at the bar, they’re definitely avoiding eye contact. “Poor Credits” are wearing a sweater, black tights, flats, and 20-50 extra pounds. Their nose is a little bent, eyes are kinda small. They were the third child out of four, so they didn’t get the orthadontia they so desperately needed. At this point, a “Poor Credit” is buying the banks drinks, and they’re going to need more than a few to get the banks between the sheets.
Bad Credit 600 or less – “Bad Credits” are the chicks/dudes that banks bring home and talk about. In a terrible way. As in ” I didn’t think any amount of tequila could make that happen” way. As in ” I feel just by looking at a 600 or less I’m bringing my family great shame” way. If a “Bad Credit” is trying to get picked up, they’re going to have a rough go. Banks straight up leave the bar if a “Bad Credit” walks in. Like, even the owner doesn’t want them around. Think Quasimodo after an acid bath, then thrown in front of a snow plow. Sorry, but you’ve got to take some steps to make sure you get that score up.
Was that a little shallow? Yep. Was that the point to make sure you understand what I’m talking about? You’re damn right.
How Do I Find Out What My Score Is?
So, all that begs the question “How do I figure out my score?” Will the banks find me attractive and want to take me home. Well, there are a couple things you can do to find your credit score.
CreditKarma.com – Definitely the one I use the most as it provides not only your score but a breakdown of why your score is the way it is, and a credit simulator to see how certain actions affect your credit. Best of all, it’s FREE!
Freecreditreport.com – Great to see what exactly is being reported to those who are pulling your credit. Also super important to check at least once a year to make sure that the information listed on it is accurate. Remember, in this day and age with everything being digital, you never really know who has access to your information and who has been trying to change it. Be on top of your shit, and make sure you verify the information on this report.
Your Credit Cards – Credit cards are starting to offer a service where you can check your credit score for free on their website, as you’re checking you’re account. This works as a great reminder to keep yourself in check when it comes to your credit.
Your Credit Score Meaning – Wrap Up
Here’s what you need to know
- Your credit score is a way for lenders to judge you. Not to judge you as a person, but to judge you as a borrower.
- You’ll have your credit score referenced every time you need a major loan.
- The higher the score, the better. Banks get all hot and heavy for high scoring borrowers.
- Don’t every pay to find out your score; there are lots of places to find it for free.
Next post will be all about the factors that go into your credit score, and I’ll explain what you can do to keep it up as high as possible.
Remember, maintaining a good credit score is the single greatest cost reducing tool you have. Tweet This!
For more tips and tricks on how to achieve your version of financial freedom, check out:
- The Seven Steps to Avoid Being a Money Moron
- The 7 Vegetarian Meals That Are Saving My Budget
- How Much Is Half A Million Dollars?
- The 10 Best Finance Books Money Can Buy
- 9 Credit Score Hacks You Must Know
- Why I Never Want To Retire
- The Laziest Way to Riches – Investing In Index Funds
- Budgeting Basics – Allocating $$$ Like A Boss
- Fuck You, Frugality
- Why A Million Budgeting Tips Will Never Be Enough
Keep trying to crack the code,
Paul AndrewsFollow me on social media!