DAY 8 - Your Credit Score Matters More Than You Realize

If there’s one thing in life that can sneak up on you like a cat burglar in the night, it’s your credit score. You can go years without giving it much thought, treating it like an old acquaintance you nod to in passing but never invite over for dinner. Then, one day, you decide you want to buy a house, and suddenly, the bank wants to talk about this old friend of yours like it’s a matter of national security.

Many moons ago, I found myself in a peculiar predicament. I had once possessed good credit, then bad credit, and eventually clawed my way back to good credit again—only to wake up one day and realize I had no credit at all. Zero. Nada. Zilch.

Now, you might think that if you’ve got a pile of money in the bank and no debt to speak of, you’d be a lender’s dream. But no, my friend, you’d be about as welcome as a fox in a henhouse, because they know you know the game. When I went to apply for a mortgage, the banks looked at me like I was trying to pull off the greatest financial scam in history.

“How can you have zero credit?” they asked. “We’ve never seen this before.”

I might as well have told them I’d just stepped off a spaceship. No credit history meant I didn’t exist in the eyes of the financial world, and without a credit score, my stack of cash might as well have been Monopoly money. I had to work for two years just to build enough credit to qualify for a mortgage—despite being in a better financial position than most of the folks getting approved.

This experience taught me a lesson that most people only learn the hard way: Credit isn’t about how much money you have. It’s about how well you play the game.

Why Your Credit Score Is Important

A credit score is a measure of how reliably you manage debt. It’s used by lenders, landlords, insurance companies, and even some employers to determine your financial trustworthiness. A bad (or nonexistent) credit score can make life significantly harder in ways you might not expect:

Higher Loan Interest Rates – Even if you qualify for a loan, a low credit score means you’ll pay more in interest. A difference of just a few points can cost you thousands over time.
Difficulty Renting an Apartment – Many landlords check credit scores before approving tenants. A bad score could mean higher security deposits—or outright rejection.
Impact on Car Insurance Rates – Insurance companies in many states use credit-based insurance scores to determine your premiums. Lower credit scores often lead to higher costs.
Job Opportunities – Many employers check credit reports when hiring for positions involving financial responsibility. A poor or nonexistent credit history could be a red flag.
Dating – Yes, you are going to laugh, but I know ladies that do credit and background checks on their prospective bows. Just ask a good realtor, they have websites to do it with very little info.

How to Build and Maintain a Strong Credit Score

If I had to start over (which, let’s be honest, I did), here’s what I’d do differently:

Pay Your Bills on Time – Even one missed payment can lower your score significantly. Set up automatic payments to ensure you never forget.
Keep Credit Utilization Low – Don’t max out your credit cards. Keeping your balance below 30% of your total limit is key.
Avoid Unnecessary Debt – Only borrow what you can reasonably pay back.
Don’t Close Old Credit Accounts – The longer your credit history, the better. Keep old accounts open, even if you don’t use them.
Check Your Credit Report Regularly – You’re entitled to a free credit report from each major bureau (Equifax, Experian, and TransUnion) once a year at AnnualCreditReport.com.

Strategies to Improve Your Credit Score Quickly

If you need to build or repair credit fast, here’s how:

Make Multiple Small Payments – Instead of waiting until your statement is due, make multiple payments throughout the month to keep your credit utilization low.
Ask for a Credit Limit Increase – A higher limit improves your utilization ratio (just don’t spend more!).
Become an Authorized User – If a trusted friend or family member adds you as an authorized user on their credit card, their good history can boost your score.
Use a Secured Credit Card – If you have no credit, a secured card (backed by a deposit) can help you establish a positive history.
Negotiate to Remove Late Payments – Sometimes, lenders will remove a late payment if you’ve been a reliable customer.
Pay Off Collection Accounts – If you have debt in collections, negotiate a settlement and ask for a “pay-for-delete” agreement.

Tips for People with No Credit History (Or Those Stuck at Zero Like I Was)

If you’re in the same boat I was—no debt, plenty of cash, but no credit history—here’s how to get back in the game:

Apply for a Beginner Credit Card – Many banks offer credit cards for those new to credit.
Get a Credit Builder Loan – These are small loans designed to help establish credit.
Use a Co-Signer – If you can, have a trusted family member co-sign a loan or credit card.
Use Rent and Utility Payments to Build Credit – Some services, like Experian Boost, allow you to add rent and utility payments to your credit report.

The Credit Game and How to Win It

Mark Twain once said, “A banker is a fellow who lends you his umbrella when the sun is shining, but wants it back the minute it begins to rain.” Credit works much the same way. When you need it most, it can be the hardest to get. But if you start early, play the game wisely, and treat your credit like an investment in your future, you’ll never be caught out in the rain.

Whether you’re starting fresh, rebuilding from scratch, or safeguarding your financial standing, remember: Cash is king, but credit is the knight that protects the realm. The best time to build it is before you need it.

As a rule of thumb, save and invest your cash wisely, and use credit strategically—not recklessly. Leverage it to grow your investments, but only to the extent that a loss wouldn’t leave you in ruins. A well-managed balance between cash and credit is the key to long-term financial strength. We will talk about leverage in another post later.