There's More to Finances Than Numbers
Sometimes numbers are a good thing. But too much of a good thing isnít always good-er, sometimes itís bad.
In sports numbers are very important. Iím a cyclist and increasing my average speed, getting up that hill faster, riding farther, or being able to do more while keeping my heart rate low are all statistics I use to gauge my performance and improvements. But there is a danger there too. Besides the possibility of crashing because Iím staring at my cyclometer rather than the road, I run the risk of becoming a slave to the numbers and ignoring other important indications like my energy levels.
The same holds true for finances. While you might not crash your bike counting your money, there are some numbers which are more important than others. Lately there has been a lot of attention paid to your credit or FICO score. This is certainly a very important number just as my heart rate is in cycling but should so much attention be paid to it?
While you should know and understand your FICO score, trying to manipulate it should be avoided. Iím not saying that you shouldnít want it to be as high as possible Iím just saying donít focus your attention on the number. Focus on the underlying reason why the number is low.
Watching the Suze Orman show you see people call in all the time asking what they should do to raise their credit scores and the answer should always be the same. Get your financial house in order and the number will take care of itself.
Do you have multiple credit cards with balances that you canít pay off? Then deal with that first. Have you been late with payments, either on credit cards or other types of debt such as mortgages or car loans or even missed some payments? Then deal with that first. Do you have enough saved? If not then youíre probably over-spending and need to deal with that before concentrating on your credit score.
The score is important but what really matters is the big picture. How are your finances and can you do better? If youíve taken care of that then fine, try to increase your credit score any way you can but there are more important things in your financial life than your credit score.