Many personal finance experts believe that your credit score is extremely important, while others (such as Dave Ramsey), say that credit scores are unnecessary.

Dave refers to your FICO score as an “I love debt” score because it’s based on your relationship with debt.  Lenders use your credit score to determine how risky it is to lend money to you.

*Disclosure: This post contains affiliate links. Read our full disclosure policy here.

Your FICO score is made up of five components:

35% payment history
30% debt level
15% length of history
10% new credit
10% type of credit

Why Your Credit Score Matters

As you can see, you’re rewarded with a higher credit score if you have debt. If you have never had any form of debt or only have minimal debt, your credit score might be low.

As a result, you may be denied a loan or mortgage because of your score or you could be charged a high interest rate if you are approved. Dave Ramsey’s solution to this problem is to pay cash for everything.

While I strongly encourage you to pay cash for everything if you can, most of us don’t have $200,000+ in cash to pay for a home.  Even when we plan to pay cash for things, sometimes life throws a curve ball at us.

My husband and I had never had a car loan until six months ago, and we had planned to always pay cash for cars.  You can read more about why we decided to take out a car loan here.

The bottom line: your credit score is irrelevant ONLY if you can afford to pay cash for everything (even a home).  Most of us can’t say that.

If you can’t afford to buy a home, car, etc. without a loan, then your credit score DEFINITELY matters.

Your credit score can affect:

  • Whether or not you are approved for a mortgage, car loan, or some other type of loan.
  • How high (or low) the interest rate will be on your loan.
  • How much you pay for home and car insurance
  • Whether you will be able to rent an apartment
  • If you’ll land a job you applied for (in some cases, employers run credit checks on job applicants – typically for jobs in the financial services industry)

How to Check Your Credit Score

There is a common misconception that checking your own credit score hurts your credit. This is incorrect – your credit is only damaged when a “hard pull” occurs.  This happens when someone, for example, runs a check to determine whether or not to approve you for a loan.

You can check your credit score yourself using Credit Sesame.  This service is 100% free and it only requires a “soft pull” – this not does impact your credit score.

credit score sesame

Note: Credit Sesame does not use the FICO score.  It uses the TransUnion (VantageScore), which is similar to FICO but will vary slightly.

All you need to do is answer a few questions to verify your identity, and then you’re done!  Credit Sesame will review your credit profile and give you recommendations for ways to improve your score.

credit sesame score FICO

They do NOT require a credit card to sign up, so there’s no way for them to charge you later on.  It’s truly free.  It’s also safe, legit, and quick.

Sign up today to check your credit score!

FAQ About Credit Sesame

Here are some commonly asked questions.

Is it really free?

Yes.  They do not request your credit card information, so there is no way for them to charge you later on.  You may be wondering how they make money.

They provide you with recommendations for ways to improve your score.  For example, they may suggest that you open a credit card.  If you do, they may earn a commission on the sale.

Does checking my credit hurt my score?

No.  Credit Sesame uses a “soft pull” to check your score. Only “hard pulls” damage your score.

Is this unsafe?

No.  Credit Sesame is a reputable company, and this is completely safe and legit.  No worries!

Do you know your credit score?  If not, check it for free with Credit Sesame today!

 

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