I don’t care what the score means, I just don’t want to have to hire a lawyer, and a watchdog, and a monitoring agency, to keep someone from stealing my identity on a network I have no control over.
You probably should because it determines the rates you’ll pay when you get a loan (mortgage, auto, etc).
But I agree, security is absolutely the bigger concern, especially if you won’t need a loan anytime soon. That said, those monitoring agencies are worthless, just get an app like Credit Karma or Experian (free, don’t pay for anything they offer) so you get alerts when anything changes in your credit file. If you get a new account alert and you didn’t open one, congrats, you’ve been hacked! You’ll get a lot of spammy notifications, so maybe check it every month or two and disable notifications.
Monitoring is only a tiny fraction of the problem. I’ve had ongoing identity theft problems for decades now. Which means I have to hire lawyers, and call the FBI, and deal with multiple fraud departments. All to prove I didn’t have a damn thing to do with random companies reporting debts that I’ve never had, on accounts I never opened.
Woot, that’s awful. Is your social like a super memorable one or something? Surely at this point you could just get a new one. I know they don’t like that, but if you’re getting the FBI involved, surely he’s cheaper to do some paperwork.
35% - Payment History - on time payments, late payments, and public records (e.g. bankruptcy)
30% - Amount Owed - in other words, credit utilization; the absolute amount doesn’t matter, just the percentage of your available credit; keep under 30%, lower is better (per account also matters, so spread it around)
15% - Length of Credit History - average age of accounts and age of oldest account
10% - New Credit - hard inquiries (i.e. credit card applications)
10% - Types of Credit Accounts - “credit mix,” ideally have multiple credit cards, mortgage or auto loan, etc
And some notes:
things like collections stay on your credit for up to 7 years from the date of first delinquency, and reduce in impact as they age
closed accounts help your credit (under most scoring models) for 10 years
credit utilization has no memory, so you only need to care if you’re going to be applying for credit in the next couple months
generally speaking, 2+ years is pretty good per card, and 5+ years is fantastic; so if you’re going to apply for a major loan, hold off on new credit cards until the loan goes through (i.e. you have the title in your name)
Hopefully this makes sense. Credit scores are kind of mysterious, but they are relatively easy to understand if you do a little reading. Pay your credit cards on time, keep cards open longer, and don’t apply for a ton of new cards (unless you’re careful about average age) and you’ll have a solid score.
Edit: Here’s an idea of what FICO score ranges mean (make sure you’re getting a FICO score, many banks display VantageScore scores, which are rarely used in credit decisions):
<600 - bad, you probably won’t get any decent credit card or loan terms
600-650 - poor, you can probably get “easier” credit cards like Discover or no-rewards cards; loan terms will suck
650-700 - decent; can get most average credit cards, mediocre loan terms
700+ - good; can get most credit cards, pretty good loan terms
750+ - top tier loan terms, you’re probably more limited for credit cards by income and total credit, not score
The max is 850, but anything >750 is essentially ideal, you’re really not going to see much difference with a higher score.
