Your Credit: A Resume, Not A Rap Sheet
Feb. 19, 2011— -- As long as I can remember, most consumers have regarded credit as the destroyer of worlds—a scary black cloud hovering over us all—and the credit reporting agencies as the institutional manifestation of Darth Vader.
I must admit, the concept of busy little gnomes tracking every credit transaction, inscribing each in an individual's discrete financial book of life and then publishing, for good measure, a GPA-like number next to their name—which can determine whether, and at what cost, they will secure a loan for an automobile, a home, tuition and perhaps even a job (without the score)—seems a tad foreboding.
Listen up, people: Credit is not the Anti-Christ. It's not terribly surprising, however, that people have demonized credit in general, given the often unconscionable behavior of many people who sell credit products. Butit's important to differentiate between credit itself and those who use it for ill-gotten gains.
Credit can be a real asset, a vehicle for self-enhancement and a wealth-builder. Depending upon your level of financial literacy (which is ultimately the only thing that can protect you from the nefarious actors in the credit industry), credit can have all the positive benefits of a strong resume—or the negative ramifications of a rap sheet.
Too often consumers and creditors view credit as a "crime and punishment" issue. Indeed, it can be that—if you fail to pay your bills or shirk other financial obligations. That's when your credit report can brand you with a scarlet letter for all potential creditors to see.
However, credit can also be a financial resume—a document that reports positive and responsible behavior, just as a career profile highlights professional progress. This is about more than just a catchy metaphor (though I do love it). If Americans hope to have a healthier relationship with credit, then they've got to start owning it. It's not something any of us can afford to hide from or ignore.
