I’m Working On My Debit Score

27 Jul I’m Working On My Debit Score

I have a motto: “Say NO to FICO, I’m working on my DEBIT SCORE”.

FICO is the company that collects consumer credit data.  They are in the business to sell this information to companies and offer to sell it to you with your “Credit Score”. Each of the components to creating a credit score have to do with borrowing money: credit cards, car payments, and other types of loans. How a credit score is evaluated:

The more you borrow and pay back on-time the better your score, that’s how it works. This type of financial measurement has nothing to do with how much you make or how much you have saved. You can make fifty-thousand dollars a year with no money saved and have an excellent credit score or you could be a millionaire and have a zero credit score.

My wife and I have been debt free (except for a reasonable mortgage) for over 5 years.  No car payments, no student loans, and have been Living Without Credit Cards for years. What’s my credit score?  I don’t know and I don’t care because without Leveraging our income for debt obligations we now are able to take all of our money home and do what we want with it. Consider the advantages of eliminating debt and neglecting to improve your credit score:

The advantages:

  • There is no chance of interest charges, late fees, and over the limit fees so we can keep more of our money.
  • Without all those credit cards and loan statements floating around we have less chance of someone stealing our identity.
  • Paying cash, or using a Debit Card, makes you think twice about purchases, which has greatly reduced the “buyer’s remorse” I used to get when buying something on a whim and regretting the purchase later. (Try to remember why you needed that item in the basement that is collecting dust, and might still be making payments on).
  • Paying bills (lights, water, internet, etc…) is MUCH simpler by using my bank’s BillPay system: 2 minutes and it’s done with no stamps, envelopes, or hitting keys on a phone keypad to make a payment.
  • I don’t have to scour a credit card statement for incorrect/fraudulent charges. Did you know that most people don’t even look at their statements and could be paying for charges they didn’t approve?

The disadvantages:

  • Certain insurance companies use credit scores to rate you, so car insurance could be higher. But what we make in our savings and investments will more than make up for this problem.
  • It would be harder to borrow money. Wait, that’s a GOOD THING!

Credit is all about borrowed money and debt, not wealth. I don’t want to improve my CREDIT SCORE, I’m going to say “NO” to FICO and work on my DEBIT SCORE!

Steve Stewart is a Personal Finance Architect and recently paid for a family beach vacation without credit cards. His short videos, “Vacation Saving Tips“, can be seen at his website: MoneyPlanSOS.com 

  • Matt Wegner
    Posted at 12:55h, 27 July

    Great post Steve!

  • Festival of Frugality 291th Edition | PLAN
    Posted at 05:21h, 09 August

    […] presents I’m Working on My Debit Score posted at Living in Financial […]

  • Derek - Freeat33
    Posted at 21:30h, 13 October

    But Steve – You are missing out on 1% cash back!
    Well you just have to know yourself. If you cannot handle the temptation of a credit card, then you shouldn’t use one. The credit industry will find someone else to work with.
    I’m what the credit industry calls a “Dead-Beat” as they haven’t earned a cent of interest off me, but have paid me with rewards!

    • Steve MoneyPlanSOS Stewart
      Posted at 09:43h, 15 October

      Derek, I’m not missing out on 1% cash back. I use PerkStreet’s Debit Card with cash back or “Perks” which allows me to pay for things (no debt) AND get rewards. It also carries with it the exact same protection as a credit card when used like a credit card – Visa says so. So I’m not losing out on anything. I can pay electronically like everyone else, have the same level of comfort as everyone else, and earn rewards like everyone else.

      I don’t have to worry about a 3-digit number that has absolutely no reflection on how I’m winning with money.

    • Matt Wegner
      Posted at 18:37h, 16 October

      I agree with the sentiment that if you can’t handle the temptation, you shouldn’t use the credit card. The sad truth is that far too many people think they’re handling the credit card responsibly when they’re really not managing their money well at all. I tend to agree with Steve on this one, but there are almost as many temptations with the debit card as there are with credit cards. One has to be careful either way, and without a written budget that holds you accountable for your behaviors, the chances of being financially successful are pretty slim.

  • health insurance brokers
    Posted at 08:04h, 02 December

    health insurance brokers…

    …you could be bit more detailed on Low Auto Insurance Rates-Free Auto Insurance Quotes-Compare … in terms of beat that quote car insurance….

  • JustHost vs IPage
    Posted at 20:38h, 10 January


    really good post…