Credit scores are weird

On the one hand, the system is kind of corrupt.
On the other hand, ignoring it can cost you tens of thousands of dollars.

And when you look online for advice on the topic, you can get very different responses.

Someone like Dave Ramsey (Baby Steps) will tell you, “Who cares?!”

While Ramit Sethi (I will teach you to be rich) would say to be a “Credit Card Deadbeat.”

Now I’m not going to delve into credit cards here, but I wanted to outline three things:

1. Why you need to care about your credit score.

2. Why you don’t need to care about your credit score.

3. At what point does a higher score not matter?

And if at the end you want a free tool (they have a paid version as well) to help boost your credit score, I recommend Dovly.

Why you can’t ignore your credit score

As broken as the system is, a bad credit score will cost you.

Here’s where it actually matters:

Mortgage rates

The difference between a 580 credit score and a 740 credit score could be 1.5% on your interest rate.

Say you’re buying a $420,000 home with 10% down.

• 740 credit score → ~6% interest
  Monthly payment: ~$2,266
  Total interest over 30 years: ~$437,000

• 580 credit score → ~7.5% interest
  Monthly payment: ~$2,643
  Total interest over 30 years: ~$573,000

Bad credit costs you ~$136,000 more — just in interest.

Insurance premiums

Auto insurance uses credit-based pricing. A bad credit score can mean double the insurance payment in some cases.

• Good credit: $150/month auto insurance

• Poor credit: $300/month for the same coverage

Over 10 years?
$18,000 — for literally nothing extra.

Other places it quietly hurts you

• Renting → higher deposits or flat-out denials

• Utilities → deposits instead of free setup

• Employment → some roles see bad credit as “risk”

So while credit scores don’t define you, they do affect real outcomes.
Pretending otherwise is just financial cope.

Why You Don’t Need to Care Too Much

The credit score system doesn’t measure how financially healthy you are.
It measures how predictable you are as a borrower.

That’s why things like this happen:

• You pay off all your debt → your score drops

• You stop using credit → your score stagnates

• You don’t carry balances or open accounts → the system can’t “score” you

In other words, you’re punished for not playing the game.

Many behaviors that improve your credit score aren’t actually good for your life:

• Using debt regularly

• Keeping balances open “for utilization”

• Opening accounts you don’t really need

A high credit score often just means:

“This person is very good at borrowing money.”

Not that they’re wealthy.
Not that they’re financially free.
Not that they’re sleeping well at night.

That’s why I tell people: don’t obsess over your credit score.
It’s a tool — not a measure of success.

So… how much does a credit score actually matter?

Here’s the part most people miss.

There’s a point of diminishing returns.

In most cases:

• Below ~620 → you’re in trouble

• 620–680 → improving your score really matters

• 680–720 → big benefits still happen

• 720–760 → you’re getting most of the upside

• 760+ → almost no additional benefit

A perfect 850 doesn’t unlock secret doors.

Once you’re around 720–740, lenders already see you as “low risk.”
Beyond that, the rate differences are usually tiny or nonexistent.

In short, you might actually be hurting your financial goals trying to get from 720 to 800.

So no, you don’t need an 800.

You need “good enough” credit, not perfect credit.

The Takeaway

• Don’t worship your credit score

• Don’t ruin your life trying to optimize it

• But don’t ignore it either

Get it into a solid range.
Then shift your focus to what actually builds wealth:

• Saving

• Investing

• Owning assets

• Sleeping peacefully at night

You can also use free tools like Dovly to boost your credit score.

Credit is a tool.
Freedom is the goal.

That’s it for this week.

If you want to do me a solid, please go check out my YouTube channel

Dan the budget man!