My credit score, or, as Dave Ramsey likes to put it, my "I Love Debt" score is encroaching upon 800. Banks love me. I've not really considered every facet of cutting up the cards, so that's what I'm dedicating this post to.
Dave Ramsey has a FICO score of 0. Nada, zilch. And he's gotten by very well without having it. In the past, I've run across people telling me why I need I high FICO score. Here are some of the reasons I've heard:
- You want good credit to be able to get the apartment/house you want.
- While I see some advantage to maintaining my credit score while I'm renting, I know there are lenders out there who do not use FICO as a qualifier for a home loan. I don't know that this, in itself, it a viable argument for keeping credit cards or destroying them.
- You get better insurance rates.
- I honestly don't know of an insurance company that doesn't take FICO into effect, but I also don't know how long it will take me to see a difference in my insurance rates based on an effected FICO.
I'm wondering if I should sign up for one of those deals over at MyFICO.com... Apparently they help organize debt (something I've pretty much already done), but they also have a simulator that will give you an approximation of what your FICO score will be if you do something like open a new account, or cancel one. Looks like I'd spend about $50 for it, but I don't know that its worthwhile.
So the big questions I still have to face are these:
- What are the ramifications of closing some of my unused credit accounts?
- Is a $50 investment a worthwhile price to pay for FICO forecasting?