Personal Finance: Ask the Experts

Get advice on money matters from The Bee's Claudia Buck and a panel of local experts

May 2, 2013
Should I care about my credit rating?

Q: Should I care about my credit rating? I don't owe anything, I have a pension that takes care of all of my needs, and I have $300,000 in savings. I use a Costco Amex card and pay it off monthly. I have no plans to move or buy a house.

Sacramento, CA

A: That is a great question. While there are many areas that your credit ratings are not a factor (as outlined above) there are other areas where credit ratings may be a factor, so it is important to not only maintain a solid credit score, but to understand your score and have confirmation that your rating is good.

There is a difference between your credit score and your credit report. Your credit score is a three-digit number, typically from 300 to 850. It is based on your credit reports, which are a history of your credit card use, loan payments and other bill-paying habits. By Federal law, you are entitled to a free credit report once a year from each of the three credit reporting bureaus (Equifax, Experian and TransUnion). To get a copy of your free reports: or call (877) 322-8228.

There are times when a credit score can come into play; some are outlined below. These might not impact your specific situation, but it is important for all of us to realize how far our credit scores can go in impacting our lives.

1. Getting a job: While an employer must obtain your permission to pull your credit report, declining to authorize it can create question in the employer's eye. A job position where a person would handle financial transactions for a company, or a position where confidential or proprietary information is handled, are two instances when credit reports may be considered. There are restrictions with this of course, for example, here is new legislation passed in California in 2012.

2. Student loans: Your credit score is an issue when qualifying for a student loan if you are borrowing money from a private institution or bank. The lender is required to do a credit check to see if you have bad credit history. It helps them determine your overall credit worthiness to reduce the risk of a loan default. The better your credit score and history, the better chance you have to get the loan and repay it.

3. Renting an apartment: Fair or not, your credit score affects your ability to rent a home or apartment. Landlords may look at your credit score, past rental history payments, current income (among other factors) when determining if you may be a viable candidate to rent or lease. Landlords may or may not check credit histories, but it's probably wise to be prepared just in case they do.

A credit score does matter, and with each passing year, if we are being mindful, some things we would like to go down (like our weight) and some things we would like to go up (like our credit score).

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Meet Our Financial Experts

Claudia Buck

Claudia Buck is The Sacramento Bee's personal finance columnist. Read all her columns here. Contact her at

Terri Carpenter

Terri Carpenter offers advice on job hunting, retraining and career counseling. Carpenter works at Sacramento Works Inc., the career and job training arm of the Sacramento Employment and Training Agency (SETA). With 15 years in the field, she has hands-on experience with everyone from first-time job seekers to career professionals seeking advice after a layoff or looking for a mid-career change. Ask her a question.

Carlena Tapella

Carlena Tapella is a partner in the law firm of Webb & Tapella Law Corp. in Sacramento. The firm specializes in estate planning and probate, such as estates, trusts, conservatorships and litigation. She is a past president of the Sacramento County Bar Association's Estate Planning & Probate Section. Ask her a question.

Kimberly Foss

Kimberly Foss, certified financial planner, is the founder of Empyrion Wealth Management in Roseville. With nearly 30 years in the financial industry, her clients include women in transition, small business owners, retirees and "pre-retirees." Ask her a question.

Jesse Weller

Gregory Burke, a CPA and tax expert with John Waddell & Co. in Sacramento since 1984, worked as an IRS tax auditor for six years. He’s a past chairman of the California Society of CPAs. Ask him a question.

Daniel Tahara

Daniel Tahara takes your questions about California taxes. Tahara, a spokesman for the state Franchise Tax Board, has 10 years of experience as a tax auditor. Ask him a question.

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