I don’t give a damn about my credit score

Posted on by in Credit Cards, Debt, Saving Money & Finances

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One thing that is apparent from reading blogs in the realm of finance is that your credit score is important. Keeping it high and cultivating it will greatly benefit you in life. Well, I have a confession to make, I don’t give a damn about my credit score. I also want to challenge the notion that it is important. I have not needed a good credit score for anything in the last 5 years.

A credit score is a rating determined by financial institutions to gauge how reliable you are when it comes to borrowing money and making payments on debt. Sometimes it’s thought it may even used to judge character. As a society that is encouraged to actively engage in debt credit score is very important.

I don't give a damn about my credit score

What if you have no plans to borrow a penny or get into debt?

Well if that is the case then you really don’t need a credit score now do you! I got into terrible debt in the first half of my 20s, I had 5 credit cards at one point. When I got all my debts under control I realised my credit score was ruined for some time. I made a pledge never to use credit again. I never plan on having a credit card again and never plan on having a mortgage. If I buy land or property I will be walking in with a suitcase of money.

Improving your credit score often involves purposely obtaining debt and paying it off in a timely fashion to create a history to contribute to your score. I see this as a dangerous slope towards getting more debt, even if you do keep up with minimum payments!

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So no credit cards, no debt, no mortgage, no car payments, no need for credit, right?

I know a lot of people are not convinced and I want to go through some worries people have.

You need a credit card for some things like booking hotels or renting cars

Most modern bank accounts now supply Visa debit cards. I have a Visa debit with my bank and a MasterCard debit with my PayPal account. These cards are directly attached to the money I have so there is no debt involved. In 5 years there has never been a situation where the Visa or MasterCard debit has not been accepted when asked for a credit card. This includes booking rental cards, hotels, buying online and setting up subscriptions. Also, as far as I can tell, I am protected from the same Fraud protection as a credit card is.

The only downside is I don’t get the CC perks, no air-miles or cash-back. Personally having the peace of mind of no debt outweighs any CC rewards.

What if my employer or a potential land lord wants to check my credit history?

The important part here is “credit history” a credit score is different. For me I want a blank credit history. Generally employers and landlords want to see that you pay your utility bills and rent on time and if you don’t own credit cards or have a mortgage that shouldn’t go against you.

I do have bad marks on my credit history but they are over 5 years old now and I have not had any trouble renting homes since. I don’t know if they have been looking up my history or not but they have always been given the details when asked and my record is clean in recent years, clean but not very active.

But what if you desperately need a loan

If I run out of money, i’m just going home to live with one of my parents. If you can’t pay for something then maybe it’s better you lose it.

What if you have a medical emergency

First off, you absolutely must try and be insured properly. This will take care of a large portion of medical bills. If you happen to end up with a large portion to pay then you won’t need to get a loan because the hospital will likely set up a payment plan regardless of your credit score.

How will you grow your business without access to loans

Business startup is becoming easier to set up, maintain and run on a low budget. Technology means that if you take it slowly most people can afford to start their business ideas on a modest startup alongside their regular job. Personally I think you should try and do this from your own money without loans unless you are going into a large scale business that you 100% know.

Other blogs take on the need for a credit score….

It’s important to supply some balance so here are a few articles from other sites talking about credit scores and history, some in opposition to my view.

What’s important to note is that in these articles they seem to agree it’s the history over the score that matters. I don’t think that history doesn’t have to include debt, it just needs to try and be clean which it will be if you don’t bother getting into debt or just get all your debt paid off and closed down.

Not giving a damn about credit isn’t for everyone but….

I don’t want to turn around and say that no one should care about their credit. I have made a decision that fits my minimal life. The less stress and things I can think about the cleaner and easier I find it to live my life. Not having debt and not worrying about credit scores and such things is a way to reduce another load on my life.

Some people won’t be able to accept not having a mortgage, not having a credit card and some so-called “sensible” debt. I’m not saying they are wrong but I am trying to get people over to my side. There is nothing wrong with having a mortgage but I believe a house can be achieved without one.

Even up until fairly recently I thought credit scores mattered and you would probably even find credit score related posts in this blogs history.

So, do you really need debt for anything, do you need to worry about your credit score? The answer might be a big fat NO.

 

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I don't give a damn about my credit score, 4.8 out of 5 based on 15 ratings

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25 Responses to “I don’t give a damn about my credit score”

  1. Kevin@OutOfYourRut

    02. Aug, 2012

    Hi Forest–I have to agree with you, at least mostly. I’d rather have a good score than a bad one, but I won’t lose sleep over it. There are FAR more important things in life for sure.

    I think credit scores are part of the whole competition thing (mine’s better than yours, etc). Also, credit scores are a metric, like weight or cholestrol readings. We can keep score and declare that we’re “getting better”, and that kind of thing always generates a lot of interest. It’s also very popular on blogs because it relates to credit, and that can bring in the ad revenue.

    The most important aspect of credit scores though is that they enable you to borrow on favorable terms. That has value of course, but it seems to me that ultimate goal should be becoming debt free. If that’s the case the obsession with credit scores is way overblown even among the credit conscious crowd.
    Kevin@OutOfYourRut recently posted..What We Can and Cannot Predict About Stock Returns And WhyMy Profile

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  2. Brad Chaffee

    02. Aug, 2012

    This post ROCKS!!!

    I’m right there with you! Haven’t cared about my credit score since the end of 2007 and like you, I have not experienced any problem using our debit cards. We do earn perks on our Perkstreet debit card and have a PayPal debit card as well. We’re even working on paying cash for our next house. When I say we’re not borrowing a single penny from anyone for any reason for the rest of our life…we mean it. :)

    It has been the best financial decision we have ever made too!

    Plus what we have learned is that ordering your life around what your credit score will do almost always leads to financial disaster. The exception would be those few that pay their balances off each month but most people don’t do that.

    A credit score is really a debt score, and I refuse to play that game! I agree it’s not for everyone but I also say don’t knock it till you’ve tried it because it is THE BOMB! :)

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    • Forest

      03. Aug, 2012

      Wow thanks for the support Brad, I couldn’t agree more! I’m never borrowing another penny if I can help it. I understand other people’s choice to do so and others perspective on that so won’t say my (and your) way is the only way, just a choice I feel is liberating.

      I didn’t know about Perk Street. Sadly i’m UK based (at least financially although I tend to live all over the world). Maybe there is a reward debit here, at least air-miles would be nice :) .
      Forest recently posted..I don’t give a damn about my credit scoreMy Profile

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  3. Lance @ Money Life and More

    02. Aug, 2012

    I agree that if you truly never plan on ever borrowing money it doesn’t matter. I have a mortgage though and want to have the option should I ever need it so I keep my score good. I hope that you never need it and as long as you never need to tap it you’ll be fine :)
    Lance @ Money Life and More recently posted..August 2012 Monthly Goal UpdateMy Profile

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  4. Steve Stewart

    02. Aug, 2012

    AMEN Brother! Thank you for being out there!

    I would add this: Here is Visa’s Zero Liability policy http://usa.visa.com/personal/using_visa/personal_finance/debit.html

    I earn points/rewards with my PerkStreet DEBIT card. You may want to learn more about it from an interview with the CEO of Perkstreet: http://MoneyPlanSOS.com/57

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    • Forest

      03. Aug, 2012

      Hey Steve, thanks very much :) . I don’t know much about Perkstreet but going to read that interview. Sadly I am financially UK based so can’t get a US account. Will be looking for reward debits in the UK though.
      Forest recently posted..I don’t give a damn about my credit scoreMy Profile

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  5. Alex

    04. Aug, 2012

    Nice one Forest. Ive made dumb choices in the past….getting things on hp and overdrafts….but living debt free is definitely part of my plan. Hps….you give them back you still have to make the payments…..cc debt…..thankfully I’m out of that trap.

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  6. Macinac Harper

    04. Aug, 2012

    “credit”? What on earth is that?

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  7. Maria

    05. Aug, 2012

    Greatest post ever – very relieving and liberating! I’m sure I’m far from the only one with such feelings!;-) Thanks, Forest.
    Maria recently posted.."Hey! What’s your business about?!" AND Free Gifts from Me;-)My Profile

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    • Forest

      05. Aug, 2012

      Wow thanks a million Maria! I am glad this post got so much support, I thought there would be a backlash when I hit publish.

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  8. Melody

    09. Aug, 2012

    I just paid off my credit card and I am so relieved..:))) Thanks for a great article.

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  9. Harry @ PF Pro

    19. Aug, 2012

    The only thing I think you should go into debt for is real estate. But that being said, I sign up for a lot of credit cards for the sign-up bonuses and have gotten thousands of dollars in cash and flights so my good credit score has definitely helped me there.
    Harry @ PF Pro recently posted..Why Borrowing From Your 401k is a Bad IdeaMy Profile

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    • Forest

      21. Aug, 2012

      Thanks Harry, I myself don’t think you should get a mortgage when there is potential to save up the cash alongside renting although it’s more of a personal choice rather than telling people what to do.

      Credit cards are good if you truly have the discipline not to get into debt with the,m. It’ seems proven most people don’t have such will power!
      Forest recently posted..Keeping budget whilst travelingMy Profile

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  10. Glen Craig

    22. Aug, 2012

    I totally understand why people don’t want to use and be dependent on credit. And they shouldn’t have to.

    But I think you should make sure there aren’t any black marks against you. Many people have mistakes on their reports. Your report is free to check once a year so it doesn’t even cost you to make sure it’s all correct (even if it says you have have no credit used).

    You don’t want to have a mistake costing you in something like insurance when it doesn’t have to.

    I agree that you shouldn’t lose sleep over your credit score, especially if you have no need to borrow.

    Thanks for the balanced look.
    Glen Craig recently posted..Five Habits That Keep You From Achieving Your GoalsMy Profile

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    • Forest

      22. Aug, 2012

      I certainly think this is sound advice if you have had credit Glen. If you have never had credit it’s not likely you’ll even really be in the system but you are right because it’s quite a decent way to find fraud. Someone I know found a credit card a family member had fraudulently opened up through a credit report, as the address for the card was not hers she may have never found out about it!
      Forest recently posted..Keeping budget whilst travelingMy Profile

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    • Andy

      12. Dec, 2012

      It would really dneepd on the intrest rate. How much Debt can you actually pay off before the baby? cause If you can get rid of at least one or two bills a month, then do that, if you can only pay DOWN debt, save you want to try to make your cost of living WAY below your income, we live by the 10-10-80 rule which is, Tithe 10%, Save 10% , and Live on 80% of you income.References :

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  11. Brad Chaffee

    21. Sep, 2012

    Forest, you may have missed this latest article of mine that was used in a debate about credit scores. You know what my stance is and I think I made a pretty good case for myself and those who choose to live their financial lives a little different than the status quo.

    blog.readyforzero.com/why-i-refuse-play-credit-score-game/
    Brad Chaffee recently posted..I Love You Like a Blogger Roundup 9/21My Profile

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  12. Mika

    12. Dec, 2012

    I am actually flniig bankruptcy AND saving for baby. I know people think bankruptcy is SOOO bad but it’s not as terrible as people think and in my situation it’s the best thing. After my divorce I was left with ALL the debt that we accrued since EVERYTHING (credit cards, loans etc. were all in my name) Then not long after I was put in the hopital for kidney failure and had no insurance (that’s a nice little bill let me tell you what!! ) Bankruptcy is not cheap but it works for me AND allows me to save for me new baby! GOOD LUCK HUN! References :

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