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Honored Contributor
Posts: 25,929
Registered: ‎03-09-2010

FICO credit scores

There was a thread here recently about cancelling credit cards that are not used and does it effect your credit score. There were many - many - many opinions. I don't want to reopen that can of worms at all. What I wanted to address is the thought that , unless you are looking to get a loan your credit scores do not matter. OMG that is so incorrect. When you apply for a job they check your credit score and if it is low they will probably not even consider you. When you do go to buy something on credit or to apply for a credit card - the lower your score the higher your interest rate. And , when you apply for insurance they will jack up the price if you have a low credit score. I am certain there are probably other times i have not even thought of but I wanted to show that credit scores apply to a lot more than just getting a loan.

Respected Contributor
Posts: 2,614
Registered: ‎03-12-2010

Re: FICO credit scores

Yes, you are correct. Your FICO score is important because even if you charge very little, you need to keep your score high. Our auto insurance rates are directly affected as are our home insurance policy due to having a high or low score. It is so much more than just if you need to borrow money.

When you apply for a car loan, having good credit can often give you 0% interest rates and you can keep your money securely, earning some interest, in your bank account.

Honored Contributor
Posts: 26,274
Registered: ‎03-10-2010

Re: FICO credit scores

Out of that entire thread, I think 2 people made the comment about not being in the market to make a big purchase. Those same people may not be in the market for a new job or looking to change insurance companies either.

I've never had a potential employer pull my credit report but I know it happens.

Respected Contributor
Posts: 2,614
Registered: ‎03-12-2010

Re: FICO credit scores

On 1/5/2015 LipstickDiva said:

Out of that entire thread, I think 2 people made the comment about not being in the market to make a big purchase. Those same people may not be in the market for a new job or looking to change insurance companies either.

I've never had a potential employer pull my credit report but I know it happens.

I was told that each and every time you renew your auto or home policy, they check your credit. So even if you have the same policy, they still continue to want to see your FICO score.

Super Contributor
Posts: 2,234
Registered: ‎03-11-2010

Re: FICO credit scores

I'm not 100% up-to-date on absolutely all the in's and out's of credit importance or history or everything they use it for NOW in 2015.

I do know that some things changed with Dodd-Frank.

I do know that some things reverted back to previous method before Dodd-Frank.

I think it would also make a big difference IF one was a student, IF one was a recent high school or college graduate and under the age of 25 . . . vs someone in there 40's or 50's or higher.

Not everything is as it appears or sounds in all situations~! There are no absolute answers to all people in all situations.

Example: After Dodd-Frank, it affected SAHM's and SAHD's . . . you couldn't count "household income" . . . but they realized the error of their ways and changed it.

It is important to build a credit rating even IF you are still a student whether working part time or attending school on scholarships and incidentals and extras are primarily funded by your parents . . . have a credit card . . . pay it in full & on time . . . same for utilities IF you are in an apartment and not in the dorms.

So yes, the score matters . . . BUT it matters at varying degrees depending on your stage of life.

Just sayin'


whoops make that 2015

Respected Contributor
Posts: 2,026
Registered: ‎07-05-2012

Re: FICO credit scores

On 1/5/2015 SoftRaindrops said:
On 1/5/2015 LipstickDiva said:

Out of that entire thread, I think 2 people made the comment about not being in the market to make a big purchase. Those same people may not be in the market for a new job or looking to change insurance companies either.

I've never had a potential employer pull my credit report but I know it happens.

I was told that each and every time you renew your auto or home policy, they check your credit. So even if you have the same policy, they still continue to want to see your FICO score.


In most states that's not true. Most states have pretty strict regulations about use of credit scores for insurance rating purposes, and you're not re-rated based on credit at renewal unless certain conditions are met (usually one of those conditions is that it's to your benefit to re-rate you because your credit has improved). There are states where re-rating at renewal occurs though, and this also doesn't help you if you change companies.

Super Contributor
Posts: 1,050
Registered: ‎11-13-2014

Re: FICO credit scores

Yes, your car insurance will go up as your FICO score drops.
Honored Contributor
Posts: 25,929
Registered: ‎03-09-2010

Re: FICO credit scores

On 1/5/2015 WenGirl42 said:
On 1/5/2015 SoftRaindrops said:
On 1/5/2015 LipstickDiva said:

Out of that entire thread, I think 2 people made the comment about not being in the market to make a big purchase. Those same people may not be in the market for a new job or looking to change insurance companies either.

I've never had a potential employer pull my credit report but I know it happens.

I was told that each and every time you renew your auto or home policy, they check your credit. So even if you have the same policy, they still continue to want to see your FICO score.


In most states that's not true. Most states have pretty strict regulations about use of credit scores for insurance rating purposes, and you're not re-rated based on credit at renewal unless certain conditions are met (usually one of those conditions is that it's to your benefit to re-rate you because your credit has improved). There are states where re-rating at renewal occurs though, and this also doesn't help you if you change companies.

What is your source - we have lived in 2 states and in Pa our agent told us that rates depend upon credit scores and when we moved to Fl and went to AAA for insurance for our home and cars they told us they would need 24 hours to get our credit information before they could tell us the cost of the coverage, So it certainly does matter.

Honored Contributor
Posts: 25,929
Registered: ‎03-09-2010

Re: FICO credit scores

I have a friend whose DH owned an insurance agency and it went bankrupt. He had a very hard time finding another job - despite that he had an MBA. It was due to the hit his credit took when he bankrupted his company because he did not have it incorporated. He was unable , at all , to find a professional position and ended up working at a place that installed windows - in the office as a salesperson. And that job even was on a trial bases because when empolyers look at low FICO scores they feel you are not a trustworthy and honest person, so they don't want to hire you.

Respected Contributor
Posts: 2,026
Registered: ‎07-05-2012

Re: FICO credit scores

On 1/5/2015 happy housewife said:
On 1/5/2015 WenGirl42 said:
On 1/5/2015 SoftRaindrops said:
On 1/5/2015 LipstickDiva said:

Out of that entire thread, I think 2 people made the comment about not being in the market to make a big purchase. Those same people may not be in the market for a new job or looking to change insurance companies either.

I've never had a potential employer pull my credit report but I know it happens.

I was told that each and every time you renew your auto or home policy, they check your credit. So even if you have the same policy, they still continue to want to see your FICO score.


In most states that's not true. Most states have pretty strict regulations about use of credit scores for insurance rating purposes, and you're not re-rated based on credit at renewal unless certain conditions are met (usually one of those conditions is that it's to your benefit to re-rate you because your credit has improved). There are states where re-rating at renewal occurs though, and this also doesn't help you if you change companies.

What is your source - we have lived in 2 states and in Pa our agent told us that rates depend upon credit scores and when we moved to Fl and went to AAA for insurance for our home and cars they told us they would need 24 hours to get our credit information before they could tell us the cost of the coverage, So it certainly does matter.

Please read my post and the post I was responding to again (and also what I said in the earlier discussion you alluded to). Credit score most certainly matters in determining home and auto insurance rates. It can actually matter quite a lot. But in most states you are only allowed to be rated based on your credit score at policy inception. When your renewal rates are calculated, they are based on the existing credit information the company already has except in certain circumstances (one of which is usually that if your credit score has improved, they are allowed to lower your rates, but they can't increase your rates if your score has worsened.)