Friday, December 27, 2013

Credit Scores are Designed to Get You in Debt and Keep You There

In order to have a good credit score, you need to have the following credentials:

  • Have a number of credit cards
  • Have balances on those cards
  • Have other consumer loans
  • Have a history of borrowing money and paying it back on time

The lender needs to see some kind of track record showing how good you are at paying back your loans.  Who wants to take a risk on an unknown, right?  But what really stands out to me is how the pressure to have a good credit score traps us into debt for a lifetime.

Here's how it works....

The only way to have a good credit score is to go into debt, stay in debt, and continually make your payments on time – without adding too much more debt or paying off too much debt.  In other words, stay in debt as long as you can.

If you want a better credit score you need to swim with the sharks more often.  If you don’t carry a balance the banks don’t like you.  It’s not because you are unsafe, it’s because you are NOT PROFITABLE to them.

A good credit score is not an indicator of winning financially.  All it tells you and the bank is how good you are at borrowing money and paying it back.  That’s it.

And you forfeit a fortune over a lifetime by paying interest.

It’s the ultimate paradox.  You believe your fiances are in good shape because you have a good credit score.  But the banks are are the ones who are profiting while you sink deeper and deeper.

Start dumping your debt, save money, and pay cash.  Do these simple things and you’ll be on your way to building wealth – not your credit score.  And what’s more important?

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