You know it's important having and maintaining great credit scores, but there are times when concentrating on something else just makes more sense.
Here are eight occasions when worrying about your credit scores should be the last thing on your mind:
If your credit can't get much worse, don't worry about harming it further -- just get back on track with your finances as a whole. Spend within your means, delete your debt, clean up old accounts and pay on time from this moment forward, and your credit reports will brighten up on their own.
In fact, says Bruce McClary, Seattle spokesman for Clearpoint Credit Counseling Solutions, fretting about "minutiae while your credit is already in the basement will unnecessarily fray your nerves and may even prevent you from taking important steps necessary for healing your credit."
2. They're already great.
"Just be happy with what you have and keep doing what works to maintain your healthy credit," says McClary.
3. When they become an obsession.
Reviewing your credit reports at least annually is wise, but overdoing it can cause unnecessary anxiety. "It's like checking your weight on a daily basis -- it can be counterproductive," says June Walbert, a financial planner in San Antonio who works for USAA, a financial-services company serving the military.
Fixation can also result in splurging on extraneous services. "I was once obsessed with checking my credit score," says R.J. Weiss, a financial blogger at Gen Y Wealth from Chicago. "I was 19; I had a bill go to collections. Once I realized I couldn't get a normal credit card, I started to monitor my credit rating heavily."
Weiss began paying $15 a month for a monitoring service, but after about six months, he realized he was wasting his money. "The only thing I could really do at the time was to pay my bills on time."
4. You won't need them.
"How much does your credit score matter when you are getting a mortgage, financing a car, applying for a job or opening a line of credit? It's the main event," McClary says. "But how much does it matter when you have a steady job, you aren't planning on moving, you won't be refinancing your mortgage or you don't plan on opening any new lines of credit? It's virtually invisible."
In short, good credit is inconsequential if you really won't be using it in the foreseeable future.
5. You're bankrupt.
File for bankruptcy, and your scores will plummet from wherever they are down to the very bottom. Bite your nails about the effect? Don't bother. You're filing because you need to (right?), so accept the consequences. It won't be long before you can rebuild. When you're ready, apply for low-limit credit cards and charge responsibly.
Though the notation will remain on your credit reports for 10 years, most people who file can increase their scores dramatically in just two years.
6. You've got more-pressing problems to deal with.
What takes precedence over your credit reports? Your health and that of your family, putting food on the table and keeping the lights on in your home, to name a few. In times of crisis, expending the effort to drive up scores may not be the best way to use your energy, says Walbert. "It's a hierarchy of needs. You as a person -- as a parent -- need to do whatever you need to do to survive, and sometimes that means making 'bad' financial decisions."
7. You're using them as status numbers.
"While a FICO score is a measure of how one has managed their debt, it should not be the equivalent of the scarlet letter or the golden ticket. Both a jerk and a saint could each do everything necessary to earn an 800 FICO," says McClary.
8. You're skipping the country -- for good.
Relocating to Tahiti? Pack your sunscreen, but leave your credit behind. "The FICO model accepted in the USA is not a factor if you're moving to a foreign country," McClary says. However, Walbert issues a warning to expats: There might be a time when you choose to live in America again. "Maybe your kids need you, or you marry a U.S. citizen who wants to move home. Preserve your score so you can pick up again." How? Just keep charging with your U.S.-issued cards, since they're generally widely accepted abroad.
In general, developing a great credit history and high scores is advisable. With them, you have a better chance of securing premium financing, and you'll keep employment and tenancy opportunities open, too. Equally important, though, is to know when to direct your attention to other areas of your life instead.
This article was reported by Erica Sandberg for CreditCards.com.
Published Aug. 12, 2010