Get A Free Credit Report and Score: But Does it Even Matter?

Last week I did something I’ve never done before.  I used Credit Karma to get a free credit score and report.  That was the first time in my life that I’ve ever checked my credit report or even had an interest in checking it. Why? I’m becoming more and more convinced that your credit score matters.

To know how applying for multiple credit cards impacts a credit score

For several years I’ve enjoyed the game (yes, I know it’s a game) of getting credit card rewards bonuses for signing up for new credit cards.  Despite what many think, I personally think there is actually a financial value in doing so.  At the very least, it’s a fun hobby.  Over the last four years, our family has enjoyed around 25 free hotel nights from signing up for seven rewards credit cards.

Most recently, I signed up for a credit card that will give me 75,000 bonus American Airlines AAdvantage points.  That’s more than enough for a free trip from North America to Europe.

I never considered my credit score because I’ve always heard Dave Ramsey say it doesn’t matter.

I was recently reading an article about how applying for credit cards impacts your credit score.  In the article, the author suggested you not try and get new credit cards within two years of buying a home (assuming you plan to borrow money).  I wondered what I was really doing to my credit by signing up for 1-3 credit cards each year.  I decided the only way to know was to check and monitor my credit score.

To make sure credit stays intact before a credit purchase

There is a possibility that within 2-3 years we may get a home mortgage, and I thought that no credit card bonus would be worth jeopardizing my ability to get the best available rate on a home mortgage.

By ignoring my credit score I thought that I may be financially penalizing myself.

I tend to think of credit scores like I do college professors.  Every teacher graded according to certain preferences.  When I wrote a term paper, I’d write according to that grading standard (even if I didn’t like it).  I feel the same way about my credit score.  Since so many companies use a credit score as a type of grade or standard, I figure I may as well do what they ask to maintain a good credit score.

Reasons to pay attention to your credit score

Your credit score is a popular way to measure your level of responsibility.  As such, people will decide how to professionally interact with you based on your credit score.  They could be a landlord, a cell phone company, or an auto insurance company.  By monitoring your credit report you can repair any credit report errors.

The statement, “your credit score doesn’t matter” is only true assuming you fully (without exception) operate without debt.  In addition, you will need to be willing to pay more for certain items and deal with some additional hassle.

How can a poor credit score be more expensive? You will find that some auto insurance companies determine your rates based on your credit report.  Sure, one could boycott any such companies, but if they have the lowest rate, you do need to realize that you are paying more because you’re ignoring your credit score.

How can a poor credit score be more hassle? You will need to find companies or individuals within the company who are willing to manually review your application.  That does add an extra level of hassle.

It’s free.  At you can get a good idea of your credit score for free.

Reasons to ignore your credit score

A funny thing (actually, it’s quite sad) happens to some people when they check their credit score.  They start doing financially dumb things so they can try to increase their credit score.

Others obsess over their credit score assuming that a credit score is like a personal finance grade.  They think, “If I’ve got a good credit score, then I must be doing well financially.” But, that is not true.

The Final Verdict

In many cases, I think there is little danger in paying attention to your credit score and making wise decisions when it first helps improve your financial situation and your credit score.

What do you think?  Have you checked your credit report and score recently? Are there other reasons to either pay attention to or ignore your credit score?

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  1. Mike D.

    I use Credit Karma, but just for amusement really. My wife and I don’t borrow money so I’m waiting for my score to get to a point where it doesn’t exist anymore.

    I check my credit report every four months. If you look at a different company each time (Experian, EquiFax, Transunion) you can get a report every four months only using your free anual check. I find it helpful and the first time I did it a little over a year ago I found a few errors.

  2. Minda

    I found out quickly upon moving away for college that having no credit history at all is a bad thing. One bank wouldn’t even let me open a checking account. So I got a credit card from the bank I’ve used since I was 13. I several more month I hope to get a rewards card and use that instead. Since they like to see at least 2 credit accounts.

  3. Briana @ GBR

    I’m signed up with CreditNotify, which gives me a free report every year (detailed with score). I don’t want to obsess over my score, but what I like about the program is that every 30 days they send me an e-mail about whether or not they found an activity. Of course, they alert me right away if they do see some suspicious activity and ask me to confirm it, which I love. I think it came with my Citi Forward credit card. $14.95/month but it definitely comes in handy, especially since I’ll be looking for a house next year.

  4. Rob Ward

    I definitely try to check my report at least once a year to make sure there are no errors. As for my credit score I am not as concerned about it because we already own a home and do not plan on opening any more credit in the near future (hopefully never again!). As long as you are paying your bills on time, and paying off your credit card each month, your credit score should be just fine.

    One other factor to take into consideration is how much credit you are using vs. how much you actually have (I forget the official name). That is, even if you aren’t using a credit card, you shouldn’t close it as it will probably lower your credit score.

  5. Kris

    It’s easy to think that your credit doesn’t matter if you don’t rely on credit cards. But what if you lose your job or need a loan – then it matters. And better to be a step ahead, and check it before you need it, just in case there are any errors.

  6. Karen B.

    I am a firm believer in keeping tabs on your credit score. We own several properties and had it not been for our Identity Theft Protection through Pre-paid Legal, we would have never known that Bank of America had posted several 30 and 60 day late notices on our credit score – when we had never missed a payment! (Although we contacted BofA immediately after the first posting, they continued to post late notices for MONTHS. But that’s another story.) The point being, had we not been pro-active in watching our credit score, we would never had known. And Craig is absolutely correct when he stated that insurance companies, as well as banks, etc, check your credit score. They want to know what risk they are taking on when they ask you to pay a monthly premium – and that goes for all lines of insurance, not just auto.

    Identity Theft Protection with Pre-Paid Legal is only $9.95/month, and covers not only your credit score (financial: credit card, loans, etc), but ID theft regarding your driver’s license, medical records, social security number, address, and more. I highly recommend it.

  7. Robert

    Sure it matters. With a free credit report, you can spot inaccuracies and old credit marks that haven’t fallen off your record. Removing these errors is a fantastic way to raise your credit score, saving you money in the long-run.

  8. George

    “But does it even matter?”

    If you are not going into debt – then you don’t need a credit score aka “I love debt score”

    Pr 22″The borrower is slave to the lender”
    Pr 6;1-5 “free yourself like a gazelle…”

  9. Minda

    I have to disagree with you there George. Employers, insurance companies, and landlords check that score too. If I hadn’t realized I needed to establish credit history I probably would be forced to live on campus this year. A decent credit history opens up options. I’m not going to jump through hoops for mine, but by simply using a credit card and paying it off each month I can establish credit without it costing me any extra.

  10. Mike

    How important is your credit score? I don’t think it’s very important at all. having a good credit record is important, and by keeping your financial house in order you will have a good credit history and therefore a good credit score. I think too many people focus on the score when they should worry more about what the score is meant to reflect.

  11. crashdamage1957

    I just created an account, literally took less than 3 mins. pretty cool. I esp. like the Credit Report Card module, very interesting info that would have taken me some time to assemble manually, and i found the ability to drill down to the underlying details rather fascinating.

  12. Sherri

    Lots of people don’t know that everytime someone checks your credit, your score drops (even up to 50 points). So if you go to a car lot and they get your info to check you out and you don’t buy the car, your credit score drops once they’ ve checked you. Found out that the banks here in WV do not use the same kind of scores and languages found on Credit Karma. I’ve not been on there so I don’t know for sure – just asked a local mortage person about some of the terms my daughter gave me.