When you were younger, do you remember hearing countless people advise you to “build your credit”? Those same voices were buzzing around in my head until I got a clue in 2007!
“You’ve got to build your credit” they’d say, and the reason is usually based on the myth that says in order to be financially responsible you must build your score. I despise this myth most of all because from what I see, it has ruined more lives than it has helped.
Think about it.
18 year old after 18 year old has inserted themselves into the murky waters of worshiping their credit score in order to “have stuff”. You don’t have to be a genius to look around and figure out that this has not worked. Instead, what it HAS ACCOMPLISHED is put good people who meant well in debt. Don’t get me wrong I’m not removing the personal responsibility aspect of ones choices from this argument. What I am saying is that a system designed to judge your financial responsibility on the irresponsible decision to borrow money for anything and everything is the most ridiculous thing I’ve ever seen.
Nowadays, people borrow money for EVERYTHING, and do so because they believe that they HAVE TO in order to have a good credit score! It has literally changed how people manage their finances and that is NOT a good thing!
Instead of work hard and save, it has created the mentality to work hard and pay and pay and pay for the rest of your natural life UNTIL YOU DIE!! It has created an era of financial irresponsibility, has it not?
I’ve got news for you and it’s going to sound familiar to Tyler Durden’s advice in the hit classic movie Fight Club.
YOU ARE NOT YOUR CREDIT SCORE!
The last time I checked my credit score (last year), my report basically concluded that there wasn’t enough information to base a score. I check it every year for free to make sure there are no fraudulent discrepancies.
I finally got around to checking my information this year, and as you can see by the fact that we’re already half way through the year, it is not a priority of mine. My credit score can be zero or it can be a million — I truly don’t care! I haven’t borrowed a single penny since the end of 2007 and decided at that moment that I would no longer be making my financial decisions based on my STUPID credit score.
I make the best decision for me and my family when handling our money and no score is going to change that.
My TransUnion Credit Score is 701!
I have zero negative or unsatisfactory accounts, one satisfactory account shown below, and that’s it. There is nothing else to report or base a score on. Frankly I’m puzzled as to how my score could possibly be 701. The bottom line for me is that it doesn’t matter because I truly don’t care. I have no desire to borrow money ever again for anything which literally cancels out any need to do anything based on this score.
There are so many people out there that will literally want to FIGHT YOU if you express any disdain for the importance of a credit score. You’ll often hear things like:
- You can’t rent a car! Not true, but even if it was — so what. I have a paid for car and if I have to find other options I will. I refuse to get a credit card to build credit just so I can rent a stupid car.
- You can’t get certain jobs! There are much fewer jobs that base anything on your credit score than there are that don’t.
- You can’t rent an apartment! Sure there are some “commercial properties” out there that won’t but there are SO MANY more landlords that can view a savings account statement and determine someones ability to pay.
- You can’t buy a house! Whateveeeerr! There’s still something called manual underwriting. Also, if you think the only way you can own a home is by having a mortgage then you are sadly selling yourself short — in my humble opinion. 🙂
With some of the most common myths aside, my recent report seems to suggest that you don’t have to borrow money to even have a credit score. I certainly don’t know how this will change as the years go by, but again, it will not affect how me and my family make our financial decisions.
According to ZenDough, where I was directed to receive my free score (based on a 14 day trial I plan on cancelling tomorrow), if I master the six principles that will impact my VantageScore, I will “likely” achieve my goals.
Those principles are more likely to contribute to my staying in debt if I were to base my financial life on using them.
Here’s how I see it.
Your payment history will tell you how well you have done making someone else wealthy. Your credit balance will show you how depressed you should be. Your recent credit will only prove you still don’t get it. Your utilization will indicate your ability to open new credit cards or other lines of credit — because you can never have enough debt. (note sarcasm) The depth of credit will tell you how long you have hindered your ability to make better financial decisions. And your available credit will show you how much debt you’ll eventually be in if you continue borrowing money — because with your “credit score” mindset — if you experience a major financial emergency, you’ll likely utilize it all.
Those aren’t principles in my book — they’re pitfalls.
My advice to you would be to do the right thing with your money regardless of whether or not your score will rise or fall. If you have to go into debt in order to keep the credit score ball rolling then it might be time to re-evaluate the real purpose of that score.
Is it intended to help you financially, or is it more accurately a way for you to make someone else very, very wealthy? Do you really want payments for the rest of your life — all for a stupid score?
You decide. I already have. 😀
I really don’t give a damn about it to be honest. I know this sounds silly but if I ever buy another property I plan to do it in cash so I am not going to need my credit score for that reason!
Great article.
Not silly at all my friend! We are headed down that route now. no debt for us means no debt for us, and that includes a future mortgage. Some people say, well why would you want to rent for the rest of your life? I simply reply by saying if you can pay off a 15 year mortgage early which does include paying interest then you could certainly save up enough money to buy a house in much less time. Great comment!
I love the line, “do the right thing with your money regardless of whether or not your score will rise or fall.” Sometimes, not having a great credit score but having cash in the bank can be a hassle – I ran into this situation getting my Godmother set up in an apartment, she had never had any debt of any kind her entire life so she had no “credit score” for her apartment complex to check (but plenty of cash in the bank). It required some extra paperwork and hassle, but it was still totally doable. I’d rather have to jump through those extra hoops than be in debt.
Great read.
Awesome job Megan and I must say, I am a huge fan of your Godmother. It sounds like she is a very smart woman. You’re right, it sometimes requires a little hassle or extra paperwork but end the end, would you rather be loaded with debt or debt free. I’ve lived with debt and it didn’t work all that well so I am convinced that the way we are currently handling our financial future is much brighter than those days when we were running alongside a credit score to keep up. I kind of think that’s more of a hassle really! Thanks for weighing in and sharing your story with us! 😀
I have no idea what my credit score is…nor do I care. I only care what is on the report and request the free report about twice a year.
Same here man. The only reason I care to see that is to make sure everything is as it should be.
But Brad, what about helping the economy by using your credit card? 😉
A new article just posted: http://www.usatoday.com/money/perfi/credit/2011-06-16-credit-card-use-economy_n.htm?csp=managingmoney. Reading it made me cringe…
Haha! Yeah okay. My own economy is much more important. LOL I’m definitely going to read that article later when I get home. Don’t be surprised if you see a follow up article because of it. 🙂
Dear affordanything.org,
I noticed your comment in my spam folder and and only got to read the first sentence. I marked it “not spam” and was going to finish reading it after deleting the other spam comments. Unfortunately, for some reason it didn’t make it to the other side and I didn’t get a chance to read the whole comment.
BUT…
I will comment on what I did read. You said that you disagree (no problem btw) with my post because if someone is disciplined (which you went on to say most people are), that “THEY SHOULD” buy something on credit cards then pay it off and be done. I definitely disagree with the premise that someone “should” use a credit card as well as the part about you saying most people have the discipline. If most people as you say, had that discipline then most people wouldn’t be in debt, but I also believe that it has more to do with just being disciplined.
The problem people face in this country is not only do they have debt but they have no savings. Having “the discipline” to use credit cards responsibly is great if that’s what you CHOOSE to do, but it isn’t something someone should do just because someone else says you should. I do not use credit cards and my life is pretty awesome but I know some people who do use them and pay them off every month. Which is totally fine by me.
I personally think that the credit score and everything built up around it, is possibly one of the worst things to happen to people and their money. It’s a flawed system that suggests that there is only one way (as you did) to prove that you are financially responsible. I consider myself to be very financially responsible I just don’t buy into the “I love debt scoring system” to prove that I am.
I wish I would have been able to read the rest of your comment, nonetheless, I still stick by the basic premise of my article which is that people shouldn’t base their financial decisions on what their score is or isn’t going to be. They should make the right decision regardless of how it affects their score. I’m personally proud to be among a new generation of financial naysayers when it comes to the status quo.
I am proof. You don’t have to worry about the stupid credit score to have a great life, financially or not. I appreciate your comment and your opinion, but I think your way has been used for long enough and has proven to be more dangerous than helpful to families everywhere.
😀