5 Reasons Why Your Credit Score Matters Less Than You Think It Does

When I was an 18-year-old, back in 2007, the only thing I knew about money besides the fact that I had very little of it, was that it was important to have solid credit.

I didn't have a large extended family or anyone to rely on to co-sign an apartment or loan agreement, so I was in a rush to get excellent credit as soon as possible.

Establishing credit early is important, but starting to save and invest for retirement is more important.

Shortly after I turned 18, I went out and applied for my first credit card. It was a Chase Freedom card, which at the time was targeted to young adults. My initial credit limit was $300, and I was elated. I remember holding it in my hands and hardly believing I had a credit card with my own name on it.

Growing up in poverty, I was afraid to use it because I didn’t want to owe someone money I couldn’t afford to repay. I used it sparingly for that reason.

Reflecting on my early days with a credit card, I now realize that I did everything perfectly to build phenomenal credit. I still have that original Chase Freedom account open and my credit limit is now $10,000. You can see the details below.

Even though I worked so hard to build solid credit and now boast a credit score over 800, I now realize I would have been better off by focusing on a few other things instead.

For example, as a 22-year-old recent college graduate, I had one of the strongest credit profiles of anyone I knew. Yet when I started working I didn't know what a 401(k) or an IRA was. Both would have been much more valuable to me now than a strong credit score. Unfortunately, it's hard to make up for lost time with retirement accounts like Roth IRAs.

Your Ability To Make Smart Purchases Is Critical

When I graduated from college I started paying for my own phone bill. I remember proudly calling ATandT to transfer my account to my own name and leaving my family plan.

I felt like I was being responsible by paying my own bill and being an independent adult. The problem was I didn't compare prices or find the best deal. I simply kept the same account out of convenience.

Today there are tons of alternatives so that you no longer need to pay for the most expensive phone plans. Companies like Mint Mobile make it easier than ever to get comparable service for less.

You should do this for all of your purchases, especially recurring charges. It's now easier than ever to compare prices using sites. For example, those that wear contact lenses can use ContactsCompare.com to find which online retailer has your brand for the lowest price. It's an easy way to pay less for contact lenses.

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