Debt-Free Living

Credit Scores Explained

The Credit Score! There are so many conversations around this topic, so I thought it would be a good idea to break down how it’s calculated and whether or not you even need one!


  • No, I don’t think you’re crazy. In fact, for the audience you and Dave address, those who have proven to be irresponsible with debt, I think you are both 100% correct. An alcoholic really can’t go back to social drinking, the only way is to quit cold turkey and never go back.

    For the rest of us, there are some impractical aspects to not using a credit card. Airline tickets, Hotel, and Car rentals, for example. I know these can be done with no card, but it’s not so simple.

    Renting an apartment – I worked for a realtor who rented multiple apartments, and we used a background/credit check. Those who had no credit score were not approved. We may very well have lost people who would have been great tenants, but it was tough to judge who had no score due to their superior money management vs those who were simply ‘off the grid’ and trying to hide their cash flow. No credit, aside from new school graduates (which we approved) was viewed as a red flag.

    Last, aside from any ‘cash back’ (which I know Dave hates) cards offer purchase protection. My wife and friend ordered custom furniture and before delivery, the store closed up. We got a credit back on the card. The friend lost her money. Custom pieces were ‘pay in full’ when ordered.