Aug 032013

Is that how it works?  That’s pretty much what I came away with after reading this little blurb on Yahoo:

A 737 Credit Rating and Still Turned Down for a Loan

Let’s forget the whole “buying a new car” aspect of this and look at the larger picture here.  The person in this article had a high credit score and no debt.  Good income, obviously not a bad risk.  And still got turned down by several banks for a car loan that was under $10,000.   All because the person had not incurred any debt since 2001.  It seems credit histories only go back 7 years, so no matter how good or bad you may have been in the 20th century about paying off your loans, it doesn’t matter now.  So it would seem that you are better off to be in debt, so you can get more debt, because you can’t get into debt, unless you are already in debt.

Um, yeah, how about bullshit on this one.

For all the hype we hear about our inability to save money, and how important it is to save money over our lifetime so we have enough to support our fat asses when we can’t produce for the corporate warlords anymore, it seems there is an even more emphasis put on keeping a strong credit score and favorable credit history.  After all, if you want to buy stuff, the best way is to borrow.  You know, no down payment, easy monthly installments.  After all, nobody buys a car, or a house, or a new television for cash.  It’s all about financing large purchases, and for many, small purchases as well.  That’s what credit cards are for.

Corporations live for credit.  There is a lot of money to made in loaning out money.  Try to go and buy a new car for cash.  You will get a lot of static, stalling, and pleading from the finance dept. to take out a loan for said car instead of paying for the whole thing up front.  A car dealer makes big bucks on the finance fees, and they get to mark up the loan rate so they pull in a few extra bucks every month that you make a payment.  Markups on the car itself are not that high and in some cases, a dealer can actually sell a car at their cost and still make more profit just through the financing.  Stores who promote their in store credit cards are the same way.  They all hate cash sales.  Sure it moves some merchandise, but the profit margins are way more lower.

The trouble is, credit scores and credit histories are also used in other ways.  It’s a common practice now among corporations to run credit checks on prospective worker bees.  A bad credit score or history, or apparently even worse, no credit, may prevent you from getting that dream job of sitting in the cubicle of floor 4, row 7, number 12, and banging out those important reports every, long, dreary, day.

Medical facilities may also run credit checks to see if you can pay for the life saving procedures they provide, or just let you die in agony.

Credit is a horrendous concept that has way too much importance in our complicated society.  But nevertheless:

I refuse to go back into debt again.  Not going to happen.

I paid off my last credit card nearly 4 years ago.  And closed that account when I did.  I have not had a loan, mortgage, car, motorcycle, whatever, since 2002.  And I have no intention of ever borrowing money again, for any reason.  So that means in about 3 years I won’t have any kind of credit history, which means I won’t exist as a living entity in the corporate world.  But, there is one minor loophole I do have.

Everytime I get a new cell phone contract they run a credit check.  I am currently in the first year of a 2 year Sprint contract, so if you wanted to split hairs I do have debt, but I can also buy my way out of said contract at anytime.  Officially, the Sprint deal is the only corporate payment I make every month.  My rent goes to individuals, electric is not enough to claim on anything, subscriptions are nothing, so my only real contact to the corporate world is my iPhone bill.  And that is probably the only thing that will show up on my credit history, if I still have one.

So, if I continue with my minimalist ways, by the time I am eligible for Social Security, if it still exists, I won’t have any credit history.  I will be off the grid financially speaking.  Will I be allowed to collect Social Security?  Will I qualify for Medicare, Obamacare, and the senior citizens discount at Denny’s?  The whole system is rigged.  You are hooked in from the beginning, student loans, credit cards, car loans, mortgage.  We are taught that we cannot exist in society without debt.  It’s the only way to get the stuff you want and need.  To exist without debt, to go without a new car every four years, to not own a house with a mortgage, to not run up a credit card bill, well, that’s just un-‘merican.  What is wrong with you?

Nothing, that is what is wrong with you.  If you have eliminated debt from your life.  If you use little or no credit to get the things you want and need.  If you only have and use the minimum of what you need to get around in life.  Then you are doing it right.  And trust the Captain, life will be a whole lot more enjoyable without debt.

Capt. Fritter

  One Response to “So, You Need Debt, So You Can Get More Debt?…”

  1. Our solution is to use a credit card regularly to purchase groceries. Then we pay the bill every month so as to not accrue a balance or interest. That gives us a payment history without having any debt. Yes, it’s a game, but one we choose to play so we have a credit record just in case. We might not have been allowed to rent this apartment without that.