Bret Nason, Platteville, Wisconsin bankruptcy attorney

More bankruptcy questions? Check our our FAQ page.

Credit scoreThis page contains general information. Contact a WBG attorney for specific advice.

Credit scores are big business. You’ve seen companies advertising “free” credit reports, with the hope that you’ll pay extra for the credit score. But here are four things these companies don’t want you to know:

1. A Credit Score is not a Life Score.

A credit score is not related to your worth as a human being. It’s simply a tool lenders use to determine how much they will lend you, and at what interest rate. The credit industry wants you to think your worth is tied to a mysterious number, between 300 and 850. The higher your number, the better person you are. That’s nonsense.

2. A Credit Score isn’t worth anything in real money.

I’ve had clients who are very proud of their 800 credit score. I tell them, “write that number on a piece of paper and take it to the grocery store. See how much they’ll give you for it.” A good credit score will let you borrow more money than a low score, but the score itself is worthless.

3. Your Credit Score may be artificially high.

Essentially, your credit score simply tells creditors whether you’ve been making payments on time. It doesn’t say whether you can continue doing so. If you’ve been making minimum payments for months, your credit score may be quite high. But if you went to a lender for a car loan, you probably wouldn’t get the money. The lender would see that you can’t continue servicing the debt, and that eventually you’ll default on something. And that lender doesn’t want the default to happen on HIS debt.

4. “Credit” is just another word for “debt.”

Bankruptcy attorneys try to help people who have more debt than they can handle. After bankruptcy, most clients have little-to-no debt. Why would anyone jump right back into the debt/credit quicksand? It’s disheartening to hear a client ask when he can get another credit card.

If you want to get a credit report, don’t pay for one with a credit score. Go to annualcreditreport and get a free report. Don’t let the credit industry talk you into putting more importance on an arbitrary number than it deserves.

More bankruptcy questions? Check our our FAQ page.

This page contains general information. Contact a WBG attorney for specific advice.
Wisconsin Bankruptcy Guide is provided by law firms designated as Debt Relief Agencies by the federal government because we help people file for relief under the Bankruptcy Code. We also provide other types of debt relief options.

Image Credit: GotCredit, flickr

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