For the last decade the media has pounded into the heads of American consumers that having a high credit score is the key to financial success. It should come as no surprise that the funding for all those commercials and PSA’s came from lenders, both mortgage companies and credit card providers. Of course lenders want people to pay their debts, and by creating a false pride in the “scores,” those debts have a better chance of getting paid. 

When faced with overwhelming debt, a person faces a moral choice about how far to go in trying to pay creditors. Many agree that people should pay their debts, but not if payment means not having food on the table or a roof overhead. Creditors know that many borrowers will default, and the losses are figured into the cost of doing business as a creditor.

To be sure, scores were very important in the last decade as creditors would lend to anyone with a high score, whether or not that person had the ability to repay. However, to obtain a loan now, the two most important things a borrower must prove are stable income and sufficient assets. Thus, a “good borrower” is someone with a job and assets. The score is no longer the most important qualifying factor.

Creditors make money by loaning money. If they refuse to loan money to people with jobs and assets just because those people have low scores, they will not be providing many loans. What is important is the reason a score is low. If due to a one-time foreclosure, a lender may be more willing to lend to someone with a job and assets. Likewise, landlords will rent to someone with a job and assets over someone without a job and assets, no matter what the score. Scores are important, but just not that important.