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Why Your Credit Score Still Matters

This piece was originally published at GenFKD.

You might be surprised why your credit score matters as you grow into an financially independent, fully-functioning adult.

In the recent past, the majority of Americans used credit cards on a daily basis. Today many young people are avoiding credit cards because of fears of accruing debt. Interest rates are also trending higher, which may turn off millions of millennials to the idea of opening a revolving credit account.

Still, not having an established credit history can come back to haunt you as you grow older. In the world of credit, each of us has a number attached to us, known as a credit score. The most commonly used score in the US is the FICO score. That number is used by many companies to determine your creditworthiness.

While many factors go into your credit score, the most important one is payment history: Did you pay your bills on time, or did you open a store credit card and forget about it? Avoiding your credit card bills for a few months can be a black eye on your credit score, and it can take up to seven years of stellar payment behavior to fix your credit.

You might be thinking: so what if my FICO score is garbage? In reality, having a low FICO score can seriously harm you in ways that you’ve never imagined.

Literally everyone uses your FICO score to size you up. This score is almost like a quantitative measure of your reputation. Imagine if you could know if a person was dependable through some sort of measurement. That’s exactly what lenders do with a FICO score.

If you plan on being a normal adult and doing thing like renting an apartment or buying a car, if you have a bad credit score, you’ll be seen as a credit risk and pay sky-high interest rates. Even potential employers often request credit reports before hiring you.

Credit scores fall in a range of 350-850, while anything above a 700 is considered good to excellent.There are also other two other major companies in the same business of issuing credit ratings, and those scores can differ.

If you’re young, be mindful that it takes a while to build credit. Open a credit card and pay on time. Don’t open too many at a time because that lowers your score as well. Build a solid credit history, it will save you a fortune in the long run in interest charges, and help you live life to the fullest.

GenFKD is equipping millennials with the skills and education necessary to create and lead the “new economy.” To learn more, head over to

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