Wednesday, April 7, 2010

Perfect Credit Score...

This article is making my head spin!  DH and I have been working to pay off our debt - completely.  We follow Dave Ramsey's Financial Peace University.  Dave calls the FICO score an "I love debt" score because it measures debt.
Consequently, focusing on scores is only natural. "People are drawn to this subject because it allows them to measure something that they equate to financial health," says Jose Rivas, national education manager for Consumer Credit Counseling Service of San Francisco.
 I don't consider debt to be financially healthy.
Dan Nainan, a professional comedian who constantly travels between New York and Los Angeles, has carefully built an 830 FICO score. Doing so enabled him to negotiate preferential terms with his premium reward card. "I was able to drop the annual fee for my $450 per year American Express card to $150!" 
Wow!  I save $450 per year by not having the card!
Want the very best vehicle loan available? Let your numbers do the talking. When Brenda Avadian, founder, out of Pearblossom, Calif., was applying for a car loan, her 849 score helped her secure top financing. "Saving thousands on interest charges is a tremendous motivator," says Avadian, who locked in 0 percent interest for five years. A loan with a 4 percent rate would have cost her an extra $3,200 on the same vehicle.
Pay cash for the car.  Cars drop like a rock in value (all cars drop).  Think of all of that interest saved.  (Zero percent interest still has a finance charge built in).
At last check, marketing company president Paul Entin, from Bloomsbury N.J., holds a 990 VantageScore. For him, it's a matter of honor and integrity. "A high credit score indicates your name and your signature on a contract have meaning. It's an indicator of certainty ... of character. It would be difficult to trust someone with a poor credit rating to the same extent you can trust someone with a higher credit rating."
This statement makes me mad and sad at the same time.  He's essentially saying that your character is tied to your credit score.  Seriously?  Dave Ramsey has no credit score.  I guess that means he has no character according to this guy's world view.
"Every time someone runs my credit they say, 'Wow, I almost never see someone with credit that high,'" says Carrie Rocha, founder of in Minneapolis. She keeps it first-rate to preserve her autonomy. "As someone who got out of $50,000 in debt in less than three years, I take a lot of personal pride in my financial freedom." Though Rocha has no plans to borrow money again, "I have no barriers when it comes to employment, insurance or other areas of life where my credit score is used to assess the kind of risk I am."
To keep her score high, she must have some sort of debt - even if it is a card she pays off monthly.  Remember, a credit score measures debt.  If she no longer had debt, her score would eventually drop to zero.  As far as employment, a simple explanation about your score (and your plan to remain debt-free) should suffice.  And I get insurance without a great score.  We have health, auto, life and home insurance.

I'm going to stick to my plan - no more debt.  I don't want to worry about whether or not I missed a deadline.  I don't want to worry if something happens to our income and we get stuck with bills we can't pay.  The borrower is slave to the lender.  My personal experience bears this out.  I'm tired of being a slave.  I want my freedom!!!

1 comment:

  1. Amen! From someone who has been credit card debt free (and working on the other debts) for over a year, I can assure you, it is worth it. We have been redeemed at a high price. It would not be right to be a slave to another master but our Lord.