The best possible credit score is not 850 like some credit agencies calculate. With hard work and the right strategy you can achieve an even better score, zero. That’s right, having a credit score of zero is the best possible score you can ever achieve. The fact is that society makes you believe that you need a credit score to be able to survive. You’ve likely heard commercials and financial gurus talking about ways to improve your score or how important a good score is. Through their rhetoric, you have been lead to believe that having a high credit score is necessary to buy a car or a home. However, this is simply untrue.
You do not need credit to survive in society today. In fact, a good friend of mine has never borrowed a dime in his life other than when he purchased his first car over 10 years ago. He paid off this vehicle in half of the financing term and never borrowed money again. He’s disciplined with his money and has been able to achieve financial success at an early age. He will be able to fully retire in his 30’s.
When it comes to home ownership, paying with cash is not that difficult. In addition, you need to consider that there’s actually nothing wrong with renting a home instead of buying one. In many cases, it could actually be better for you to rent instead. When you don’t have a mortgage you don’t have to pay interest on borrowed money. I have personally met a well-paid major league baseball player who admitted that he has yet to purchase a home. You can save the money that you would have spent on costly repairs, property taxes, and insurance to use for saving, investing, and personal growth instead. The same philosophy holds true for making other major purchases such as a car or expensive furniture set.
Of course, the best method to earn a credit score of zero is to never have any credit to begin with. However, if you’re like most Americans (myself included) then you’ve already “improved” your score to a meaningless three digit number. In order to attain a score of zero, you have to be disciplined. You have to work hard to pay off every debt that you owe and to close every account that you have. With time, it will be like you dropped off the face of planet; creditors won’t even realize you exist anymore because you will have no credit score. You’ll also be less likely to have your identity stolen when you have a credit score of zero. For the rest of this article I will discuss some useful tips to help you conquer your credit and finally achieve the best score possible.
Pay Down Debt and Fire Your Creditors
If you want to have the best credit score in the world, you are going to have to eliminate all of your debt and close all of your accounts. This may seem like trying to climb an unconquerable mountain, however, success can come in time by following a debt elimination plan. Just like dieting to lose weight, there are a number of plans and methods available to help you get out of debt. In general, most plans will work however the key to success is being consistent and sticking to the plan.
Probably the most popular debt elimination plan is Dave Ramsey’s Debt Snowball as described in his revolutionary book, The Total Money Makeover. This life changing book is available on Amazon here (affiliate link). Getting out of debt and improving your credit score to zero will most definitely require a change in lifestyle. This means getting yourself onto a written budget, living below your means, and stop adding to your debt. Living a frugal lifestyle also helps but it’s not absolutely necessary.
Save Money, As Much As You Can
Saving money has got to be one of the most important things that you can do to build long-term financial security. Having a substantial savings will enable you to pay for emergencies, make a big purchase, invest in once-in-a-lifetime opportunities when then come up, and start businesses. All of this can be achieved without the use of credit or taking on any debt.
Having the right mindset with regards to saving money is paramount to long term success. You have to change the way you think about money. People who have piles of debt often don’t appreciate the value of a dollar. For every dollar that you save, you can save even more money in interest payments not made. In other words, saving money and avoiding debt can multiply the value of the money that you do have. For example, if you purchase a used car for $10,000 with cash then you’ve only had to pay $10,000. However, if you finance the same car for 5 years with a modest interest rate of 5%, then it will cost you $11,323. Imagine what you could have done with that extra $1,323 had you not paid that interest.
” Savings is the cure for debt and the antidote for credit.” – Unknown
Saving money is easier than you think. Start small and make a conscience effort to make your savings grow. If you continue in this effort, you could potentially have tens of thousands of dollars saved up in a matter of a few years. When you set aside money from each paycheck, you probably won’t miss it. In addition, the time is going to pass anyway so wouldn’t it be nice to have some money when the future arrives?
Live Frugally but Fully
Living a fulfilling life does not mean that you have to live extravagantly nor does it mean that you have to spend foolishly. Our society and culture has made the word “frugal” have a negative meaning. However, you don’t always have to go along with what culture and society says. Living frugally can be just as rewarding and fulfilling as living extravagantly. It simply requires a change in mindset.
Frugal people tend to be resourceful, innovative, efficient, and smart. In fact, it’s well known that a large percentage of self-made millionaires owe their riches to a frugal lifestyle. With frugal living strategies like buying pre-owned goods, learning to DIY everything, and working to never pay full price on anything, you can eventually get rid of your debt and building your savings. Eventually, you’ll be able to earn a zero credit score.
Earning the highly coveted credit score of zero is not necessarily an easy thing to accomplish in today’s society. However, with a plan and a disciplined mindset set, you can accomplish anything.
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