Why Your Credit Score Matters

It can massively affect your financial – and real – life

Back in 2017, a company called Equifax announced it had been hacked. And this wasn’t any old data breach: the details of 147 million people – almost half the population of the US – were exposed. All those people’s names, addresses, birthdates, and social security numbers were, just like that, in someone’s nefarious mitts 🤲

Hackers were able to get all this because Equifax isn’t just any old company: it’s a credit bureau. Which means even if you’d never signed up for its services yourself, it still has a ton of information about you and your financial life. Why? So it can assign you the number that controls your financial future: your credit score.

Equifax, along with Experian and TransUnion, makes its money by collecting data on you. They get that data from all sorts of sources – credit card accounts, loan payments, even your phone bill – and they use it to paint a picture of your “creditworthiness”. In other words, how safe a borrower of money you are.

You can access that information whenever you want, but so can third-party providers when you apply for a financial product with them. They then use it to decide if your application gets rubber stamped – or if you’re too toxic to touch ☠️

That means your credit score and credit report (two different things!) are hugely important to your life. If you’re marked out as risky or unprofitable, you might not be able to get a credit card, secure a mortgage, or even rent an apartment. In some places, a higher credit score can even save you money, offering access to cheaper insurance and better credit card rates.

In this Pack, we’ll demystify the world of credit scores, explaining exactly how they’re calculated and how you can improve yours. Stick with us: we’ll get you looking spiffy.

The takeaway: Lenders use your credit score to assess whether you’re a trustworthy borrower.