5 reasons even millionaires need good credit scores

Being a millionaire certainly has its advantages, and those at a certain level of income don’t always have to worry about the same financial issues as their less affluent counterparts. Still, a credit score isn’t necessarily one of those issues, and many incredibly rich people have average credit; for example, billionaire investor Warren Buffett‘s FICO score is just 718, according to Fortune Magazine.

In fact, the extravagantly rich should absolutely worry about maintaining good credit habits and keeping their credit scores healthy. A perfect credit score can sometimes open doors that millions of dollars can’t.

Here are five reasons why even the rich should be trying to improve their credit.

1. Credit Cards

Credit cards are a common means of payment for the rich. They’re convenient and cause less hassle when traveling (which, admittedly, the rich can afford to do more than the rest of us). But credit card interest rates are calculated, in part, by credit score. If someone has a lot of money but also a lot of delinquencies, credit card issuers see that he’s not able to pay a bill on time. So, unless millionaires want to pay more in interest than they need to and have access to fewer rewards, they should be maintaining a healthy credit score.

2. Loans

Many millionaires are business owners, and the companies they started helped get them to a financially secure place. Existing businesses might need loans to cover a temporary dip in revenue, and new business ventures need loans to get off the ground. Most millionaires don’t have enough free capital to start a successful business debt-free. What commonly goes into calculating the interest rates on these loans? You guessed it: personal credit score.

The same concept applies to mortgages, car loans or any other forms of debt — the worse the credit score, the higher the interest rate.

3. Jobs

Unless they inherited their wealth or won the lottery, millionaires work for their money. If a millionaire is ever looking to change jobs, he should be concerned about his credit report. In many cases, prospective employers will conduct credit background checks on their potential candidates.

4. Insurance Rates

Just like with interest rates, insurance premiums are affected by credit score. Poor credit history will equal higher rates. What’s more, millionaires typically have more to insure, so higher rates can really add up.

5. Your Salary Isn’t in Your FICO Score

Millionaires have access to some opportunities that others simply don’t — but income does not equal credit. While lenders will consider income, a credit score does not include your salary, job, title or employer. What it does feature is your payment history, debt-to-credit utilization and the other factors that go into calculating a score.

Consumers who are not aware of their credit standing should visit CreditRepair.com, which offers consumers their free TransUnion score and report, helps them understand both and works with them to fix any inaccuracies.