Why Credit is for Dummies

“Debt is modern day slavery in America. Credit is simply the slave ship that got you there” – unknown

Lets knock out a few false myths shall we?

1. “You need credit to be financially successful in America.” <<No, you need credit to get into debt. And you need debt to work for the rest of your life at dead end jobs just to pay for it.

2. “Using credit cards responsibly can be beneficial.” << No, the term “using credit cards responsibly” is an oxymoron. Credit cards were set up from jump to get and keep you in debt. To use credit cards the way they were meant to be used, you would need to never pay cash for anything, keep a maxed out revolving balance, send in your payments late EACH month and take advantage of those awesome cash advances charging you tons of interest ontop of the interest you’re already paying. Don’t believe me? Google why the credit card industry refers to the few who pay off their credit cards each month as “dead beats”. Sooner or later you will fall into the trap because thats how it was designed. And even if you don’t, the risk reward is so small -40 years of paying interest to get some reward points? For real? Comeonson.

3. “If I dont carry a credit card and a balance on that credit card then I wont be able to build my credit score.” << And the reason you’re trying to build your credit score again is…? You need to understand that wealthy people don’t rely on credit. They use the CASH they have access to and live within their means. No, im not talking about the folks runnin around L.A. in beamers who you THINK are wealthy. I’m talking about the truly wealthy – the Warren Buffetts and Carlos Slims of the world.

Next, you need to understand that the only reason someone would build up a credit score is to potentially use it. You should NEVER voluntarily become someones slave and thats what comes from the use of credit –> debt. There is nothing on earth you need to get into debt to buy and definitely nothing thats beneficial to you. All you have to do is focus on living within your means. Its really not complicated at all.

4. “I need to build my credit score because without it I cant get a job, rent an apartment or rent a car.”<<FALSE. #1, Employers look at your credit REPORT not SCORE. Read this directly from the employee privacy rights org:

An employment background check often includes a copy of your credit report. The three major credit reporting agencies (Experian, TransUnion, and Equifax) provide a modified version of the credit report called an “employment report.” An “employment report” includes information about your credit-payment history and other credit habits from which current or potential employers might draw conclusions about you.

An employment report provides everything a standard credit report would provide. However it doesn’t include your credit score or date of birth. Nor does it place an “inquiry” on your credit file that may be seen by a company looking to issue you credit.

http://www.privacyrights.org/fs/fs16-bck.htm#7

So in other words, each of you should be attempting to create a CLEAN credit report and not stressing out, opening accounts and taking on debt to build a meaningless credit score.

Next, in regard to renting apartments, the majority of locations you will attempt to rent will look at your credit REPORT for residential type delinquencies vs your actual credit score. The luxury apartments in places you’re most likely not supposed to be in givin your present financial situation, are the ones that may check credit scores. And if your  goal is to own property, why are you in those places? You should be living within your means and on a hardcore savings plan so you can purchase said property in CASH.

Renting cars- about 80% of car rental agencies accept debit cards. Thats an OVERWHELMING number. Yes, they will place a hold on the funds in whatever account is connected to the debit card but once you start living within your means like I have, you start noticing a very surprising trend – you have WAY more extra money than you did before. A $500 hold on a $10k balance is nothing compared to someone who is living off maxed out credit cards and has a $900 balance waiting for their carnote and other bills to come out.

So lets get this straight. So far we know credit was meant to be kept clean and credit scores have no affect on employment, traveling/renting a car, renting apartments, happiness, or anything else worthy of having in your life. So then someone asks “well I will never be a home owner or a car owner without a loan and they check your credit score for that dont they?!” Well allow me to wake you ALL the way up and yank that chord out of your neck:

• How To Buy a House Without the Use of Credit –> http://wp.me/pUlp7-4a
• How to Buy a Car Without Using Credit/ The Truth About Financing vs. Leasing –> http://wp.me/pUlp7-4c