Erasing your credit score and other life lessons on debt

Erasing your credit score and other life lessons on debtErasing your credit score and other life lessons on debtWhat is the biggest trap people fall into? Debt.Your credit score should really be called a sucker score because its a number that exists for only one reason to tell banks how much money theyre going to be able to make off of you. The higher it is, the more of your money goes to them.Thats not how theysell it, of course. They sell it as a metric for determining credit worthiness. But if you really break down what makes a credit score higher or lower, youll see that they arent being honest about what it actually is.For example, if youre the type of rolle who doesnt use credit all that much, but can make large purchases and pay them off in a matter of days or weeks, thatshouldbe an indicator that youre the fruchtwein credit worthy person on the planet. Right? Shouldnt the people who do that have the highest credit scores?Nope. Youre actually penalized for that, and your credi t score goes down. Banks hate you, because you dont carry debt long enough for them to make anything off of you.You know who banks like? The people who take a long time to pay things off. Thats why they tell you to carry a balance on your credit cards, to finance things you could easily pay cash for and take your time paying it off, to refinance your house and start the loan over for another 30 years instead of paying it down, and so on. And when you do these things, they reward you with a higher credit score so you can keep borrowing more, keep juggling as much as you can afford, and keep your money flowing to them.Thats why they give you bonuses like the ability to skip payments, reward points, airline miles, limit increases, and the like. Thats why they send you offers in the mail for retailers who give you discounts when you use their card. Want to trade up a car youre already upside down on? No problem, just roll the negative equity into the loan for the new one. Go pick out a boat while youre at it.Banks win when you stay in debt.And thats the trap people fall into perpetual debt. Most people dont even realize theyre being played, theyve been taught how to be good little customers and focus on their credit score. You purposely stay in debt when you dont need to, so you have theoptionof using debt when you want to. Eventually all of your money is going out the door to monthly payments, and then youneedto use a credit card at the grocery store just to manage your day to day cash flow. Today, most people couldnt even afford the car theyrecurrently drivingif they hadnt financed it. Thats sad.Whatsmoresad is that none of that stuff is even yours. Youre just renting it from the bank. All it takes is one little hiccup in your income for the house of cards to come crashing down, the bank takes it all back, and everything you paid along the way welches for nothing.And what happens when you figure the game out, and decide to opt out of it? When you actually pay offeverythingand have no more debt? Your credit score goes to zero.Yep, literally zero. Its not a myth.Hows that for irony? Actions that should have told banks Give this guy whatever amount of money he wants, you can trust him.instead became Screw that guy, he wont play the game and we arent going to make squat off him.But you know what? Im pretty happy about that. I decided a long time ago that if I couldnt pay cash, I couldnt afford it. I looked at my paycheck, then looked at how much of it was going out the door toward monthly payments, and imagined what my savings account would look like if it wasnt.Buying cars, taking trips, all of it gets really easy when your paycheck goes into your bank account and stays there instead of going right back out to bills.You can get out of the trap you just have to commit to staying out of debt. Pay off your credit cards and close them. Ignore the interest rates, just start with the one with the smallest balance, focus all of your extra cash on paying it off, then close it and work your way up to the next one.Pay off your car and keep driving it instead of running out and financing another one. You could write a check for your next car if your car payment was going into your savings account for a year or two.Break the cycle, live on what you make, and your credit score wont matter.This article originally appeared onQuora