Monday, January 5, 2009

Bad Credit Rating Score? It's a blessing in disguise.

"You've got to have good credit!"

As soon as your old enough to get a credit card, it's usually told to the average teenager that building credit is important. That's the conventional wisdom. Unfortunately it's also the reason so many teens and young adults are in debt. They use credit cards with the idea that it's important for them to do so because they "need to build credit". Many people put an enormous amount of stress into their own lives by worrying incessantly about the status of their credit score. They've been taught by society that credit is important.

Make sure you tithe to the credit gods.

You absolutely MUST make sure that you continue to be a good customer of those issuing credit, otherwise how could they make money? Also, unless they come up with an excuse, how can they charge you exorbitant interest rates? They can charge these enormous rates to people getting their first credit card, because they have marketed the idea that credit is extremely important for success in life, so you'd better get a credit card, and use it, otherwise you'll be missing out on the best that life has to offer.

The idea that a 'credit score' is so important has mislead many people into filling the pockets of companies who issue credit. Many people work both for their employer, themselves, and their credit card companies. They pay large monthly premiums on huge debt, in an endless cycle designed to entrap a person for as long as possible so as to extract as much of that persons income as possible.

Breathe. The sky isn't falling...

In reality, your credit rating score is really not as important as you might think. A good credit score isn't going to pay your bills and put food on your table. You can get a debit card instead of a credit card and enjoy all the same convenient. The only good reason you may need a high credit rating score is that some companies may not hire you because of extremely negative marks on your credit score. The companies who look at your credit score and base hiring decisions on it are few and far between however. It's usually only a factor in jobs that involve handling a lot of valuables, such as a jewelry store, a bank, certain federal jobs etc. The way I see it, if you are denied a job because of your credit score, it's probably a blessing in disguise. It's unlikely you would have a good experience working at a company that judges people based on their credit score.

A good credit score may actually be the undoing of many people. It empowers you mostly to do things which are self destructive. It gives you the power to buy lots of things you don't have. It gives you a false sense of security which leads to undisciplined financial management. It makes you think you are a master of personal finance simply because you have a "good score", meanwhile your hundreds of thousands in debt and your monthly expenses seem to always find a way of meeting or exceeding your income. In this way they are able to mold people into modern day debt slaves. The sad part is that some people actually feel they are getting ahead by engaging in this sort of volunteer slavery.

The silver lining

It may truly be a blessing in disguise to have a time period in your life when your credit score sinks so low that you are unable to open up lines of credit and make life altering financial decisions such as purchasing a home. Many people are in very dire straits financially simply because they really thought that there was no way banks would lend out money to them unless it wasn't risky. What they failed to realize is that as the one purchasing the home you really take all the risk. Credit card companies and banks are only too happy to lend out money to anyone they can. They stand to gain much more though by making the world of higher and higher debt an exclusive club of those who build their "Credit score". They've managed to actually make the ability to acquire greater sums of debt seem desirable. "It's amazing! I qualified for a million dollar line of credit! Isn't that great? Now I can go a million dollars into debt if I want to!" Read that sentence out loud. Does it seem at all ridiculous to you?

Seriously, breathe, relax your shoulders, it will be OK

So the moral of the story is - Do not have a heart attack if you happen to have a low credit score. It may have been just the wake up call and lesson you need to work toward true financial freedom. The tools you could use to harm yourself have been taken away. Now you can use real tools (your mind, self discipline, and determination) to build a bridge to debt freedom. When you manage to pay off your debts you may find that you've learned a valuable lesson of living within your means. You'll likely find that the time you spent simplifying your life in order to save money is the very thing which will your secure your prosperous future.
RSS Feeds Submission Directory