What if I purposely wreck my credit?

A bit of a click-baity title, I know. But I want to go through a ‘thought-experiment.’ Imagine the ‘what if’ without having to ruin anything.

What is the purpose of your credit record?

  • Determine how ‘worthy’ you are to get a loan
  • Determine if you’ll pay your rent on time
  • One of the factors in determining how ‘employable’ you are
  • A factor in how likely you are to file an insurance claim
  • Verify your identity by asking questions about information on your record

Wow. A credit record affects key parts of our life –work, where we live, and the quality of our insurance. If you just want to blow up your life, trashing your credit is a solid part of that plan.

Could there be ways of removing the apparent tyranny of our credit record? Probably not entirely. But could we reduce it?

Don’t take on debt

Many of us can’t remove all debt from our lives. If you can purchase a place to live with cash, you are very fortunate and a minority. Where you live will likely be influenced by your credit (see rent discussion below).

But what about other debt? Credit cards, auto loans, medical credit, etc. You could avoid these with very disciplined financial management. Worthwhile goal?

Rent don’t mortgage

There could be scenarios where individual landlords don’t check credit or may not put as much value on a credit score. Maybe your buddy’s uncle has a place to rent. You stay there forever because you pay your rent on time despite a sketchy credit score. But then the uncle decides landlording is a pain and sells up. Out you go to look for a new place to live. How limiting is your credit score?

Become self-employed or start a business

If you don’t want a potential employer judging you based on your credit history, become the boss (or work in a state that outlaws the practice). Just make sure you don’t need a line of credit to run your new-fangled business.

Don’t carry insurance or pay more for insurance

It’s tough to avoid insurance carriers using your credit as a factor in determining your premiums (unless you live in a state that outlaws the practice). Self-insuring is only for the privileged few, and some states still require you to carry minimum auto liability coverage. If your credit is shitty, expect to pay more or have the pool of available insurers shrink.

This discussion is mostly academic since you have a credit record, whether you use credit or not. What would be the point of ruining your credit? Allow you to thumb your nose at a system that didn’t ask your consent to participate? Not sure that’s as fun as it sounds.

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