Life on the edge — Living with a credit score of 0 (zero)

Forget skydiving…if you really want to live life on the edge, try living with a credit score of zero.

In March of 2009, I checked my credit score to make sure Kate and I were ready to apply for a home loan when the time was right. At the time, I had a decent credit score (718) and assumed all was well.

In June of 2009, I applied for a mortgage online. Our loan representative called me immediately and said something like this:

I’m looking at your credit history, and it’s excellent.
During the last few years, I can see that you made all of your payments on time, in full.
Your credit score is currently a 0 (zero).
That’s a problem.

My first thought was “You’ve got to be kidding me. You’ve got the wrong guy.”

Here’s what happened.

When I graduated from college in 2006, I paid off my student loans very quickly. Even though wonderfully generous loan companies give you money for your education, they expect you to repay the principal (fair enough) plus interest over a long period of time (not so fair). Since I took a few math courses in college, it seemed like a good idea to pay off the principal as soon as possible to avoid paying thousands of dollars in interest.

I guess I was wrong.

I later learned that my quick loan repayment meant that my credit score only had a 12 month window to benefit from my financial responsibility. By the time we applied for a mortgage, I hadn’t made any debt related payments in over 12 months and the credit bureaus “could not determine my ability to make payments on a loan.”

What a joke.

Other factors also brought my credit score to its proverbial knees:

  • We live within our means.
  • We only spend money we actually have.
  • We pay for everything in full.
  • We do not have a credit card.

Even though these credit bureaus had all of my credit history at their fingertips (college loans completely paid off in less than a year, no late utility payments, etc..) they still assigned me a credit score of 0 (zero).

The message: You must have debt to get a good credit score.

I was actually being punished for my financial stewardship. Because I did not adhere to the system (the same system that drives millions of Americans deeper into debt each year), I had to jump through hoops to get us approved for a home mortgage.

Good thing I enjoy jumping through hoops.

I spent the entire month of June contacting past utility vendors for “letters of alternative credit.” Most of them wouldn’t provide these letters, in spite of the fact that I paid them thousands of dollars over the course of my short adult life. I guess it’s unreasonable for the consumer to actually request something from the corporation.

Let me recap some of the ironies so you can learn or repeat my mistakes:

  • You should have lots of debt if you want a good credit score. Debt is good.
  • Don’t pay things off quickly. That would be unwise.
  • Get as many credit cards as you can. They will help you.

In retrospect, what I’ve really learned is that Fair Isaac Corporation (responsible for FICO scores) wields a dangerously powerful and highly illogical control over lending in this country. If you’re not willing to adhere to their system, you may end up with a credit score of 0 (zero).

Life on the edge.


Add yours
  1. 1

    It’s incredible that good stewardship would put you in such a bind. Our world’s system is so backwards. I hope your home-buying dream is a reality very soon. So exciting!

  2. 2

    What a coincidence! My wife and I had undergone a speech very similar when we made our first visit to a mortgage broker. Up until that point, we had never owned a credit card, for the same reasons you list in this post. However, after checking out a guest post by Ramit Sethi, author of “I Will Teach You To Be Rich” (don’t let the title fool you…it’s a GREAT book for folks in their 20s –, he explained on his blog (and book) the value in having a high credit score and also how to build it. Not that your blog is a sounding board for confession, but we have since gotten a Capital One card and have used to track how the $ spent on the card measures up to what is in the account. Kind of like a debit card that comes with reward points :). Anyways, I’m not saying that’s what you or any of your readers need to do, just offering up some perspective on the matter. Thanks for a great post Josh!

  3. 3

    I rented for a few years, saved my money with the intensity of a gazelle, and bought my first house with a 100% downpayment. No mortgage necessary.

  4. 4

    What Jeff said. You don’t have to play the credit game. Just delay the urge to own that house now and save for one. In doing so you save hundreds of thousands of dollars in interest payments.

  5. 5

    What is the point of this? You can do all the same living within your means while still taking on “debt” in the form of a credit card. All you are doing is delaying payment for a month, and there is good reason to do so. Not only does it more succinctly show your ability to manage a budget, but it shows your ability to borrow and pay back consistently and in a timely manner, which is the WHOLE POINT of what a lender is looking for. In addition, it allows you to effectively defer payments for up to a month. Again, you don’t ever have to live beyond your means. Just have a credit card, spend only what you have in the bank, keep track of what you need to keep on hand, and just run a one month larger balance. So, you aren’t being penalized for “living within your means” or “spending money you actually have”. The idea that not taking on trivial debt is the only form of good stewardship is simply false. Also, while it might seem ridiculous for them to ignore good credit from a year previous, not all lenders do that, and again, it is extremely easy to prevent that.

  6. 6

    Hey Chris,

    Thanks for your comments.

    Though I understand what you’re trying to say (having a balance on a credit card and paying it each month isn’t really debt and/or a big deal), I’d like to respectfully disagree with you.

    Why should I be obligated to carry a “trivial debt?” Why do I need to have a credit card from one of the some financial behemoths that single-handedly derailed the American economy?

    I’m not saying living without a credit card is the only form of good stewardship. What I am saying is that I shouldn’t be penalized for living without one.

    Thanks again for joining the discussion.

  7. 7

    What steps did you take to get your credit score “viewable”? My wife is going through the same thing right now…. perfect loan history on several loans, but a score of zero. Nobody will lend to her or collectively to us, because of this. We are trying to figure out which direction would be best to take.


  8. 8

    Hey Ahren,

    Sorry to hear about your predicament. Not really fair, but then again, if our financial system was fair, the nation’s largest banks would be out of business.

    Nonetheless, the easiest solution is to get a credit card and start paying off the balance on a monthly basis. From what I understand, a better credit score should appear in 6 months to a year.

    Best of luck to both of you.


  9. 9

    We are closing our last credit card today and plan to have our house paid off by the end of the year… how long do you think until our score is zero? Is it really a numerical “zero” or just non-existent?

    Can’t wait to jump though those hoops! I love a good fight 🙂

    Yours in frugality,

  10. 10

    I found out today that it take 6 months for your score to drop to zero. We had excellent credit 6 months ago and are having a house built on land we own. Today the lender calls and says my husbands score is zero. We sold our house about 9 months ago and had no other debt. I opened a kohls card a few months ago for the discount so while I have zero debt, I hav an excellent score. Going to be interesting to see how this shakes out in the next couple of weeks.

  11. 11

    Hey Christina,

    The terminology is interchangeable, as far as I can tell. A non-existent credit score is essentially a zero.

    Congratulations on getting rid of those credit cards. As you take a simple stand against a complicated system, I hope you get that inner satisfaction of knowing that you’re willing to go against the tide.

    Yours in rebellion,

  12. 12


    Good luck with your situation. I had to jump through many hoops because of my score. Using your credit instead of your husband’s or finding a more flexible lender should help things go through.

    Wishing you and your family the best.


  13. 13

    Hey Jwal,

    Found out yesterday that I have a zero credit score. Paid off my house a year ago, no car debt for 5 years and paid off and closed my credit cards 2 years ago. Now, according to the lenders, I’m a financial risk. LOL! I actually prefer it this way but how frustrating! There I was doing my best to not be in debt and to do what I thought was the right thing. This system truly is backwards. Love your blog. Keeps me inspired :-).


  14. 14


    Pretty crazy, isn’t it?

    I doubt we’ll reverse the system, but it’s great knowing that wisdom and rebellion sometimes coincide.

    Now I just need to update my blog…


  15. 15

    I didn’t even know a zero credit score existed until tonight. After checking my credit score myself (685 … not excellent, but not bad either) I applied for a car loan today. To my surprise I also have a zero credit score, according to the lender. I have owned my car “payment free” for the past 10 years … and do not have any credit cards. Like you, I believed living within my means was a good thing! Boy was I badly mistaken! I’m a grown woman in my 40’s … earn a very good income … have no debt whatsoever … and cannot purchase a $15,000 car. The system is seriously screwed up! Thanks for your blog … at least I know I am not alone.

  16. 16


    Glad my story offered some encouragement. Find a car that you can pay for in full, and then ride off in the sunset, laughing all the way.

    Best of luck to you.


  17. 17

    @ deb im going through the same exact thing right now im in my 40’s have’nt had a car loan in 8 years and i need a new car found out my score is zero i thought living within my means was a good thing but now i feel like im screwed ;*(

  18. 18

    So after finding out that I have a credit score of 0 I went searching the internet for answers and found this little tidbit. I was denied a credit card, which I was applying for in hopes of paying for my cat’s serious injuries, and now I’m left with some questions. Unlike you I am still paying off my student loan (four years now), and lots of interest to go along with it. I also make regular on time payments for gas/electricity bills. If that isn’t credit then I don’t know what is. How am I supposed to build my credit if I am denied a credit card for not having credit? Stupidity!

  19. 19

    Hey Beth,

    The system isn’t as logical as its cracked up to be.

    When I purchased a house, I applied for a credit card at Lowes and was denied because of my non-existent credit score. I paid for all of my Lowes purchases in cash or debit, but I shook my head knowing that its sort of stupid to ask someone to fix the credit score with a credit card, even though their application is going to be denied because of their credit score.

    Good luck to you.

  20. 20

    Beth wrote: How am I supposed to build my credit if I am denied a credit card for not having credit?

    Being in the same situation recently I was advised to get a secured credit card. It’s the only option I am aware of that will in time do the same as a coventional credit card. Debit Cards will not work of course because you do not make payments. Utilities, phone, cable, etc, should be enough to show a good history of on-time payments but unfortunately are not reported when payments are made on time…. Secured Credit Cards from a bank report monthly to the credit bureaus and will reflect on your score. Its all just a twisted game. Put up money…borrow from yourself…at a higher than normal interest rate…and probally geat stuck with an annual fee…to get the card. yep….thank you…could I please have another??? Just an FYI the Banker did add to get the best reports try not charge over half the limit on card. Best of luck everyone!

  21. 21


    Thanks for adding to the conversation. I wasn’t aware that consumers going for the best credit scores should avoid charging over half the time on their card.

  22. 22

    We paid cash for both our cars, paid off the home mortgage 5 yrs ago, and have no other debt. We, however, continue to use 2 credit cards that have good rewards and pay off the balance each month. It’s a good way to simultaneously maintain your credit score (don’t plan on needing it, but just in case…) as well as stick it to Citi and Amex–we get approx. $1000 in cash back from them like clockwork every year. It seems to keep the score going-last time I checked it was a little over 800. I wish everyone the best in their efforts to kill debt for good.

  23. 23


    Congrats on your financial achievements. I’m sure it feels great to be free from unnecessary monthly payments.

    I still think it’s sad that you need to have credit cards to maintain your credit score, but I also understand that it may be worth playing the game and getting some of the perks that go with it, cash back being one of them.

    Thanks for your comments!

  24. 24

    This just happened to me! I had my credit pulled years ago and was in the 700s. It never occurred to me that all my previous good credit could disappear. I have zero credit cards, no debt, pay for everything with cash, even bought a house last year with cash. (We chose an inexpensive house, bought at the exact right time, and got a good deal.) I have a good job and lots of savings so was shocked to discover I have a zero credit rating. Now I have to take steps to get it back up there, but being thirty-something with zero credit is actually worse than being an 18-year-old kid with no credit. I hate this game and can’t believe I’m being punished for living modesty, saving all my money, and being responsible. Terrible.

  25. 25

    I’m not sure what “math classes” you took in college, but paying off your principal before accumulating any interest is not smart if the interest rate is low. For instance, I have a large student loan debt that I’m locked in at 3.9% and a mortgage at 3.75%. It would be idiotic of me to pay either of those off in one fell swoop when I can instead invest that money and get a much bigger return. Yes, I’m paying interest on the loan, but my net gain is in the thousands of dollars because over the years I’ll make much more than 3.9% on that money. The belief that all debt is bad is misguided; that’s why economists refer to good debt versus bad debt. Why do you think rich people who have the means to pay for things up front still take out loans? They make their money work. And why exactly is it “not so fair” for a loan company to charge interest over a long period? How else are they to remain in business? Perhaps an econ class at college would have been more beneficial.

    Of course you need debt to have a good credit score. It’s not a “living within your means” score. It’s a credit score. Credit requires borrowing which means accumulating debt. If you’ve done that only in a limited capacity, it makes sense for a creditor to question your ability to do so in the future. You paid your college loan back immediately which is terrific and certainly not deserving of a ridiculous “0” score. However, a house costs thousand more and requires decades to pay off, so the loans are not equivalent. The percentage of people who pay off their student loan immediately compared to those who pay off their house is not even close. It’s impressive that you’ve lived within your means for so long and never had a credit card, but all that tells the creditors is that you have zero experience with a credit card. You have zero experience with managing the continued monthly responsibility of seeing to your debt. That’s a very different skill set from keeping your costs down and paying for everything up front. It’s certainly a laudable quality, but a different one nonetheless. You seem amazed that people who provide credit would care about your history of paying back debt over a long period of time. I agree that the numbering formula is deeply flawed, especially if someone who’s behind in their payments has a higher score than you, but the essential criteria for how credit is doled out makes perfect sense.

  26. 26

    I had 20 years of perfect credit then sold my house and cancelled credit cards I’m at zero now and looking to get a home loan. Will getting a credit card allow the credit bureaus to see my history and jump my score back up accordingly.

    It’s sad to have to ask this. Being debt-free is a great way of life, but not realistic in our backwards thinking lending institutions.

  27. 27

    Hey JJ,

    Thanks for the response.

    Call me a fool, but if you paid off your student loan debt in the next year or two instead of paying 3.9% interest every month for 15-30 years, wouldn’t that allow you to invest more money into other enterprises as I’m currently doing now?

    As you referenced in your comment, paying off a home loan in one fell swoop is not a reality for most people – myself included – but have you taken a look at your mortgage payment schedule? I’ve been paying on the same house for almost 5 years, and I’ve only taken a few thousand dollars off the principal off the loan. It would be stupid of me to keep trudging along in interest-laden misery so I can have a credit score that makes lenders feel better about me.

    If I can pay off student loan debt in two years, and pay all of my utilities on time for 10 years, that should be a fair indication of my ability to pay back debt.

    This post was written a few years back, and I currently have a credit card to keep everyone happy, but a system that tells me these are the rules and you have to follow them (in spite of the fact that the “rules” sink more Americans than they help), seems like a flawed system at best.

    In fairness, your comments indicate that you’re a responsible borrower, and I applaud you for that. But why should you have to be a responsible long term borrower?

  28. 28


    Though it doesn’t make sense, you should have a credit card that you pay off each month. It keeps the lenders happy and doesn’t give them any opportunities to derail your life or credit score.

    All lenders can see your past credit history, so if you’ve done well, and you’ve had a card for a few months, you shouldn’t run into any major problems.

    Backwards system though.

  29. 29

    Thank you… I went for a home loan today and my score was 0 for all three companies.

    It was hell getting approved for my car loan, my finance guy at my dealership actually went through all their lenders then back to the first one they asked and had to talk them into it. I was not surprised then, because I knew I had no credit being young. Tough not having a cosigner available…

    I was pretty confident when I went to the bank today to see how much I can be approved for, thinking I had perfect credit. I fully paid off my car (within a year), my student loans (a couple months after the car), and I got a best buy credit card to just help with the score. Have been done with all payments for over a year now. Thought it was going to be amazing and I would be approved right away… Now I am starting the process of getting them to recognize my financial responsibility since they are f***ing me with this system.

    I thank you for explaining that it goes off the past year; I figured it was something like that. The bank did not know the answer to why it was so. Way to get screwed for not being in debt.

    I’m off to get a credit card in hopes of bringing it back to life. Hell, maybe I’ll get two and just pay each one off with the other one.

  30. 30

    Hey Keith,

    In my conversation with an Experian employee, I was kindly told that “the system is designed to favor the lenders.” Guess we’re on the wrong side of the equation.

    Good luck to you.

  31. 31

    jwal thank you for posting this!! I am in the same situtation and its soo frustrating!! Im trying to buy a house but because I live within my means and have no debt im denied? because my score is a 0? But when I go to Experian, Trans. and Equafax SURPISE! I have 3 SCORES? Im so confused on how one lender can tell me I have a 0.. but when I pull my scores THEY are not at a 0. The lenders answer to me..yep you guessed it! A credit card… I dont know what I should do..HELP!

  32. 32

    Hey Ashley,

    Sorry to hear about your situation. There might be a difference between getting 3 credit REPORTS and your actual credit SCORE. That might explain the discrepancy.

    Either way, its ridiculous to be penalized for living responsibility. The credit bureaus want you to have some type of open-ended debt payment (credit card, car payment, etc). Without having one of those accounts, your score will stay at zero.

    Wishing you luck,


  33. 33

    It seems kind of foolish to spend all that time to get out of debt and want to get back in for a car or house, IMO once out of debt I’m never going back. As said in previous posts you live within your means and know how to budget already they saving should be second nature it shouldn’t take very long (in the scheme of things) with no other payments to save and pay in full for the house, car, that big screen, etc, if you need to get a loan it means you can’t afford it. Thats how things used to work as I understand it, I’m only 26 so what do I know. If you can’t wait for a house I was told you can tell the bank to go through manual underwriting which is where you use other methods to determine that you can honor your commitments to pay rent, bills, etc. More work I guess but its better then being in debt. Look up Dave Ramsey he lays out a simlple plan and he seem to be doing well with a ZERO credit score. But this advice is worth what you paid for it. Haha

    Good Discussion

  34. 34

    My husband and I are trying to get a house. He checked his credit on the site and saw the score we needed and then while applying for the loan, the bank came back with one a few points higher. But the highest and middle scores were at zero. ?? It was within the same day. How could we go from having credit good enough to get a home loan to just zeros, nothing?? The only credit score that wasn’t at zero was the low score? What happened within the same day that would cause this? We have a credit card that we use often. We pay all of it off, most of the time, when my husband gets paid. Can anyone help?

  35. 35
    Brandon Muth

    We have our mortgage amortization schedule printed out and taped to our fridge. Above it, in huge all caps, reads BEAT THE BANKERS. Every month when we make a payment, we include the next month’s principle, effectively cutting the length of the note in half. We keep a running tab of the interest payment avoided/saved in the margin. Granted, this gets more difficult as the principle and interest amounts begin to flip but we like the approach and the visualization of the interest. Also, the slogan provides an object for my competitive juices to fight against. Stinking bankers.

  36. 36

    Oh my gosh – I am LITERALLY in the same boat!!! It is disgusting. Glad to know at least me having a zero mean my financial shit is together… guess I too have to go into debt 🙂

  37. 37

    @Hannah – It defies logic, but the financial sharks that run the system get to make the rules — and break them — at their convenience.

  38. 38

    glad I came across this post. I have the same mind set as you. I’m trying to refinance my student loans now to get a lower interest rate, I pay everything on time but I’ve never had a credit card. I also never want to be in debt again. People shouldn’t have to live always owing something. A score of 0 should be comparable to a score of 800. I don’t want to play their game I hope it doesn’t screw me too bad

  39. 39

    I have the same problem. I have not had a credit card or any dept in 10 years. Dispite having good credit when I paid off my credit cards back then my credit score is now 002. You do get punished for living within your means.

  40. 40

    My CU has a “0 score” plan that you open a special acct, deposit a sum (I think $200 min), they loan that back to you, and then you pay yourself back with a pittance fee/interest (they said like $6 over the year), and they report every month. My plan is I deposited $500, and once they finalize the paperwork, I will open a separate savings account to put the “loaned money” into and setup an automatic payment from the “loaned money” back onto the loan. That way it is always on time and I never have to mess with it/accidentally miss making the payment. We shall see what this does to the 0 score I have now PROUDLY held for the last 8 years: Lowes bought my property to build a new store, which paid off the mortgage and I bought the current property with cash (yes, it was a windfall!); Im driving a 16 year old Dodge Ram and am looking to get a newer one for reliability (hence why I even looked at getting a loan in the first place, of course through my CU) –will keep the old one for hauling rocks/brush/etc (I am the only ‘mechanic’ to ever work on it, saving TONS!); paid off and closed all ‘my’ credit cards many years ago after the divorce of a very fiscally irresponsible spouse (she would get a card, run it up, only pay the minimum, get another, rinse & repeat, until the dreaded 300’s score & ionospheric interest rates on anything–in the divorce it was written “all debt is the responsibility of the person who initiated the account” which I sent to her creditors/credit bureaus and cleared me off her crap); living on cash/savings (yes, people, it is doable! all major purchases like the 70″ LCD and new washer/fridge was done with what was SAVED or when a good 1040 return came in–3 kids and (2nd) wife make for nice deductions! 🙂 ). Id try and get a store CC, but personally, a store CC is silly because that locks you into one store, when they may not have what I want, then Id have to use cash/debit anyway. Buying things on those cards with the 1(+)-year-deferred is downright scary to me because I dont know what my employment will be a year down the road (nothing is ever guaranteed these days!). When the dryer went out a couple months ago, I broke out the soldering iron and fixed the timer. Clutch slipping? Grab the wrenches and dive under and get filthy, for around $250 ($1K+ for a mechanic to do it). I just remember the days with the ex, buried in debt, and its just so refreshing not having that crap hanging over your head (except the monthly utilities/insurance/taxes). I have avoided debt like the plague, and I bet the monstrosity banking industry hates me, because they dont make a dime off me (free checking/savings accounts at a local credit union–why pay someone to hold your own hard-earned money?? ridiculous!). They should have never bailed out the fiscally irresponsible greedy banks, let them fail on their own merit, then maybe we might have had a better system evolve (I dont see how it would have gotten much worse, except their adding to the unemployment). Ill reply back (if I remember) on how the new score-building account does a year from now.

  41. 42
    Patrick Lilley

    Same thing. Had a credit score of 775 and was fearful that I hadn’t been in debt in ten years,..BAMM , credit score fell from 775 to 0 overnight. Makes me wonder if signing up for credit Kerma had anything to do with it. Just to show activity, I applied for a credit card, was approved and then opted not to get it…. I guess they got even with me… Thanks Capital One…. Your the best…guess what’s not in my wallet ?

  42. 43

    Honestly if you are as good at math as your post states and as good at budgeting as you claim you are a fool for not taking advantage of the credit card system… The banks job is to fool you into taking on more debt than you can repay, they do this by offering points and cash back incentives etc. “Spend money and we will give you “FREE” money”. but they are relying on people overspending. Simply don’t overspend and reap the rewards. I have two credit cards and the bank pays me around $2300 minus (Yearly Fee) a year to have them and I certainly don’t live outside my means, in the last 5 years my credit cards have earned me $10863 after fees by simply putting my normal bills through them and paying them off immediately. However I know most people cannot manage to do this and for those types of people just have a Credit Card with a $500 limit and no yearly fee. that way it cannot get out of hand but builds your credit.

  43. 44


    I appreciate your thoughts. This post was first published back in 2009. At that time, the US was still dealing with the permeating consequences of a financial meltdown caused by the carelessness of the financial industry itself, so the tone and tenor of my thoughts reflect the incredible irony that my situation highlighted. The same institutions that we’re bailed to the tune of millions and millions of dollars “could not determine my ability to make payments on a loan.” I don’t know how any lender could say that to me with a straight face.

    There have been plenty of posts that reference the same principles that you do … basically don’t get played by lenders but use their incentives to your advantage. It’s a valid point, assuming you have no problem participating in the system that traps hundreds of thousands of consumers who don’t have the basic discipline to avoid overspending. My point is that if I choose not to participate in the system at all, why should I be penalized for that?

    The system is manageable and can even be used to someone’s advantage (your point), but it shouldn’t be the only field a consumer is allowed to play in (my point).

  44. 45

    Update 5 months later: I opened a CapOne Quicksilver card back in July, $30ish annual fee, $300 limit (easily upgraded to $400 since) along with the credit union “personal loan” for $500 that I setup a special savings acct that the loan went into, and autopays itself back 2 days before due date. I use the QS card once a month, for gas or something silly, maybe $100 a month max, and then pay it off the day before or day of due date. Having the CapOne acct, it comes with CreditWise so you can watch your score. CapOne uses the Vantage score, versus FICO. Paying both on time in full (the loan amount is only $45/month), I have gone from a ZERO (0) on both Vantage and FICO to a 708 Vantage/658 TransUnion New Account model. Both in the GOOD/Average range. Im not pushing any particular brand/service, just saying its not that hard to go from nothing to something OK in a short period of time. Ill check back on the 1 year and let y’all know how it is going, but so far is promising, but no new truck yet.

  45. 46

    fair enough I knew it was an old post but saw recent comments so figured id add my 2c ;), I honestly have no issue taking advantage of a system that preys on the weak.. don’t be so weak… I was one of the in over my head people(aka the weak) paying $200/month on a $8,000 credit card bill… ridiculous now that I look back on it… cut out a few odds and ends here and there and before you know it your can save $1000/month+. once I buckled down and didn’t eat out anymore, got rid of my cell phone, biked to work(15mi one way) and rented a super crappy basement suite, I payed off all my debt in 6 months and within a year saved enough for a down payment($20,000) on a house.. yes I suffered compared to those around me but when I was close to drowning in debt I figured I can suffer for a year cut back as much as humanly possible and put myself 10+yrs ahead(which when it comes to retirement savings means I now will have over double what I would have had possibly close to triple). and when it comes time to retire instead of barely keeping afloat I will now have more money to spend than I do now. also when you start making the banking system work for you instead of the other way around its insane how much you keep getting further ahead.. as they say the rich keep getting richer.(not that im anyplace close to rich.) I know im babbling on I just cant stress enough how easy it is to get ahead if you are committed.. as I said a year of suffering for me was well worth it to be infinitely further ahead and stress free… Most people pay $250/month to Debt if you put that same $250 towards an RRSP over 30 years it will have grown to $400,000(your actual contribution would be $90,000 so $310,000 in interest) which would put you about $450,000 ahead vs having that credit card debt

  46. 47

    Ryan – thanks for sharing. It sounds like you understood the weight of your situation and went above and beyond to resolve it. Not everyone’s as smart as you though 🙂

  47. 48

    Hello! I was just informed that my credit score doesn’t exist, lol! I’m 32 years old and, together with my husband, we have paid off several mortgages (we were in real estate, buying older homes, renting them and paying off the mortgages as quickly as possible, or selling them to pay off the mortgages). We also bought our car and our camper (which we live in) with cash. We also own 3 rental properties right now free and clear. We have used credit cards in the past, but we don’t have any right now and we have zero debt right now. But my credit score has fallen off the map and my husband’s is on it’s way, in the low 600s. So crazy, because he is so frugal and responsible with his money. We discovered this because we were looking to buy a new house and were denied due to our scores, but my husband told me not to worry… we will save up the money and buy a house with cash. We have bought a house with cash before, but it was an $11,000 house… I think I want a better one this time!!! HA! I think it’s pretty stupid that we are punished for not playing their little credit card game.

  48. 49

    Summer – it’s a crazy system. One mistake and you can be penalized for years, but if you wheel and deal intelligently like you and your husband, that information only influences your credit score for a few months.

  49. 50
    Mike Ryan


    You are right. Living within your means on cash is a slap in the face to credit bureaus.

    My credit score has gone from over 825 to roughly 700 since we now live totally on cash.

    Will never get another loan because my credit score is rapidly heading to 0.

    Living on cash, with no debt, and a decent emergency fund is the way to go. No stress and i could lose my

    job for six months and still be living off cash.

    It’s kind of fun to listen to my broke neighbors, who are up to their necks in debt and struggling just to pay

    their bills: on credit of course. However, they drive big cars, live in big houses, with big mortgages to impress

    people they don’t like, with money they don’t have.

    So glad we stayed disciplined and buy only what we can afford. Glad we are not living the American nightmare of debt.

    Mike Ryan

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