Should You Go Off the Credit Grid?
These days, it seems everyone wants to go “off the grid.” Whether it’s off the power grid, off the debt grid, or off the credit grid… Yesterday, I actually read an article advising individuals to pay off all debt and strive for a credit score of ZERO. That’s right, ZERO.
What exactly would a credit score of zero really mean?
To be honest, I don’t believe that a credit score of zero is something that’s even remotely possible in this day and age, but let’s just say that it was. What would that really mean?
While it would mean that you have absolutely no debt, and would have had to have absolutely no debt for at least seven years at a minimum, a credit score of zero would mean that you have absolutely no borrowing power whatsoever. That’s right. NO CREDIT AT ALL. So, in the event that you actually needed credit, you would have no way to borrow any money.
No credit cards. No car payments. No mortgage. No credit history.
Does that even make any financial sense in this day and age? Not really. What makes more financial sense is to have no debt, but still have a great credit score, and enough credit available to you so that, if you need to borrow money, it’s there.
That’s why it’s more important to strive to maintain a good to excellent credit score rather than to strive to have no credit. And the best way to maintain your credit score is to monitor your credit carefully. Check your credit report, look for inaccuracies, and protect yourself against identity theft.
And, as much as you might like to go “off the credit grid,” it’s still very important to keep at least one, or even two, good credit cards and USE them occasionally to keep your credit lines open.