Screw The Credit Score

“Brad, you have to have good credit to be successful with money.” I can still hear my mom’s words echo in my memory.

Don’t hate me mom but, you were wrong.

Like most other people I was always raised to believe that you needed that almighty credit score and you should do everything you can to build it and protect it. I believed this lie for a very long time.

A credit score and how it is calculated can be confusing to most people. We won’t go into all of the details because we don’t need to. The truth and the point of this post are to tell you that your credit score is a score of how much you play with debt products.

The entire score has to do with debt. That’s it.

Here is how the almighty FICO score is calculated.

35% Payment History.
30% Debt Level.
15% Length of History.
10% New Credit.
10% Type of Credit.

If you got a new job yesterday and you suddenly doubled your income, your credit score doesn’t change.

If you worked hard this past year and you built up a good emergency fund savings, your credit score doesn’t change.

For many years you have been saving for retirement, and you have a good amount of cash stashed away, your credit score doesn’t change.

If you inherit 10 million dollars because your wealthy uncle passed away, you guessed it. YOUR CREDIT SCORE DOES NOT CHANGE.

You are being sold that you need a good credit score by the same people that sell debt products like banks and credit card companies and the like. That credit score helps them determine if you are a good customer and how likely you are to pay the money back that they lend you.

They sell you that a good credit score means you are winning financially. But, that is far from the truth. You could have a great credit score and not own anything because you owe on everything and not have a single cent to your name. And those people that have no debt and pay cash for anything they want or need could have a terrible score or no score at all.

I don’t care what my credit score is because I never use debt. When you don’t use debt, the credit score is useless. I only monitor my credit report for fraud.

That's why I say screw the credit score. Instead, I want you to put your efforts into what I did. I suggest you build an emergency fund. Then I want you to get out of debt FAST, so you aren't spending your entire paycheck paying everyone else, leaving you empty handed. Once your debt is paid off, you can take all that extra cash you were using to make payments, and you can now begin to save for your future and pay cash for the things you want.  That’s how you win with money. That’s the truth!