I have a lot of high-FICO friends. I know they're high-FICO friends because they tell me. They can't help themselves. They like to brag. Sigh. Funny thing about a lot of these guys, though. They don't actually apply for a lot of new credit (because they don't want to lose any points). So what do they do with those high scores? Turns out, not much. Which leads to this question: what's the point of a high score if you're not going to use it?
When I think of their scores, and what they're doing with those scores (nothing), I can't help but shake my head. It's difficult for me to reconcile. It's a score that's not being utilized. It's nothing more than a cocktail-party discussion topic. In a nutshell, it's a show score -- akin to a show car. It's like a Ferrari that never leaves the garage. Very cool to look at, I agree. But not much good for anything else if you're not even going to put the key in the ignition every now and then.
Before you start posting a bunch of comments -- saying that I'm crazy -- hold your keyboards for a moment. Given this credit environment, it's probably wise to (mostly) sit on the sidelines until the situation shakes out. But that's not what I'm talking about here. What I'm railing against is the practice of never applying for anything. Ever. Or very, very rarely (like once every five years). These are the people I wonder about. Wouldn't it be nice to use that score every now and then (for something other than qualifying for lower insurance rates)?
I worked diligently to get my scores as high as possible. By the middle of 2006, I had scores that were between 750 and 800. What did I do with those scores? I certainly didn't adore them (OK, yes, I did think they were kinda cute; but still). I didn't walk around bragging about them. They didn't sit idle. Instead, while the credit environment was favorable (and the gettin' was good), I amassed as much available credit as creditors would give me. I did all of this without sacrificing my scores.
Today, despite having all of this available credit, my scores are right around 750. Still good enough to qualify for the best rates. Still high enough to get high-limit cards if I need another one. Still good enough to not worry about being approved for a card (see my recent post on American Express).
To be sure, we're now living during a very difficult credit climate. I think it makes a lot of sense to sit this one out. It's not a bad idea to ease off the credit pedal -- for now. I'll still apply for a card every now and then (I went nearly 300 days between my last two applications), but I realize that 2006 and 2007 are long gone. Now is not the time to jump on the road and do a bunch of dangerous passes.
Still, when the credit environment loosens up again (and it eventually will), what are my high-FICO friends going to do? I'm going to venture a guess that these high-FICO friends are going to keep on doing what they've always done -- not much. They're never going to put a key in the ignition of that high-powered vehicle.
And I'll keep telling them this: it's a nice score. It's a pretty score. It's a score that you can be proud of. But until you guys do something with it, it's nothing more than a show score.
I'd love to get your feedback on this topic. Am I way off base here? Am I crazy for thinking that everyone should use their credit score every now and then? Feel free to leave a comment if you've got an opinion on this topic.