Why Your Credit Score is a Joke OR How to Be Alive
It’s 1993 and Columbia House is sending me, a 14 year old boy, an offer to get 15 CDs for a penny. I’m young, but no fool, and I know that this is some type of scam. Surely there is some fine print in there that will have me paying $25 a CD every month for the next six years. I know it’s a scam, and I know it’s wrong. I also know it’s wrong to steal, but even then my conscience was fine with the idea of “sticking it to the man.” I gave them a fake name and low and behold, I was 15 CDs worth of Pavement, Nirvana and any other alternative band popular enough to make it onto their catalog richer. They tried to collect but the person they were trying to collect from didn’t exist.
I did this about three times while I was a teenager. They kept trying to pull one over on me, and I kept beating them at it. To be honest, I was surprised at how a poor teenage kid could so easily outwit something as large as the recording industry, but I liked music, didn’t have money to pay for it, and Napster wouldn’t be invented until the end of the decade.
I worked all through my late teens, living on my own by then in a dingy apartment in this small town or that, or crashing on friends or relatives couches, and I never had many bills. Rent, electricity and a phone bill, but nothing that could get me into trouble. Well, nothing except the phone bill. At one point I had a girlfriend who lived 15 minutes away by car. My mom and friends lived 30 minutes away, but they were in the same phone number block as me: 749, and she was in 748. I probably knew that it was long distance, but I was young, in love, and since she was still a normal teenager, the kind living with her parents and all, talking on the phone was how we could spend most of our time together, since I didn’t get off of my shift as a janitor at a local high school until 9pm, too late for her to come visit. After a month of this, I racked up an $800 long distance phone bill. I couldn’t understand how it was long distance when she lived 15 minutes away from me, and so I decided to make a stand against the injustice and just opt to have my phone shut off, which the phone company was all too happy to threaten to do. Turns out, since I lived in Section 8 housing, they weren’t allowed to shut it off anyway, but they did suspend my long distance privileges. Even if I’d wanted to pay the bill, though, I only made around $600 a month total, on a good month when there was plenty of teenage puke to clean up and the gymnasium floor needed to be repainted.
I worked through college, eventually getting a girlfriend pregnant, and she already had a child of her own, so I paid for a place for us all to stay while finishing school as well. That all got us into a lot more debt — well, got me into a lot more debt — until at some point I had a handful of collection agencies calling me about a couple of thousand dollars worth of unpaid gas and electricity, not to mention that old phone bill and all the while the overdraft charges were piling up at the bank.
Now, to paint a picture here, I’m waking up at 5am to take a train to sell coffee in the subway, downtown Pittsburgh. I finish that job at 9am or noon, depending on my class schedule that day, and then go to school until 9:45pm. I then take the train back home, spend a little time with my pregnant wife, and then try to get to sleep by 11 so that I can get at least 6 hours of sleep. On Fridays I don’t have class, so I work a 12 hour shift, which typically gives me 40 hours a week. I have class on Saturday and Sunday is the day to catch up on sleep. We live above a noisy redneck bar with hand-me-down furniture. I’m not exactly living the life of luxury here. I don’t have credit cards, I’m just in debt because I can’t afford the cost of living for four.
I eventually graduate from college and am incredibly lucky to get a job that pays enough for me to rent a decent little house for my wife and our two kids. I can afford to make the car payment on the “new” used car we just bought and pay all of our bills. No cell phones, no cable TV, just the basics, though I do splurge and get cheap Internet access so that I can take Web design jobs on the side as I’ve recently figured out HTML. It still doesn’t leave enough to pay off the old debt, and when the letters come in, I just throw them away. It’s a monthly ritual — rip open the letter, peruse the penny-specific numbers, read the threatening language followed by cordial signatures — it’s simultaneously soul-crushing and empowering. I’m deferring my student loans, since they’ll let me, and once in awhile I have enough money to buy a six pack for the two of us or take the family out to eat at Wendy’s. You can feed a family of four for less than $10 at Wendy’s. Now, you won’t be feeding them “food”, but that’s another story.
A year goes by and I get a pretty decent raise. My boss likes me and I’m apparently really good at my job, and my negotiation skills work. We want to get a house, something where the landlord won’t be peaking through the windows every day and the kids can call home. Something that we’ll be investing in, not throwing money at. To my utter surprise, the bank gives us a loan for $90,000 and we find a house for $1000 less. But before the loan will go through, I’ve got to pay off the $2400 in debt I have from my teen and early twenties. I round up as much freelance work as I can and manage to pay most of it off in a relatively short time, and so the loan goes through, we get the house. We’re set. I’m making $2000 / month and my bills are $1700 / month. That leaves more money left over every month than I have ever had in my entire life and I feel pretty good having $300 to spend on actually enjoying life once in awhile. It turns out $300 will get your whole family into an amusement park and feed them there for the day, it’s enough cash to visit your parents a couple of cities away once or twice a month, and that even leaves a few spare dollars to buy things like cable, afford a babysitter to take your lady out to eat on Valentine’s Day or a bike on a kids birthday.
Another year goes by and my wife leaves me. The courts deem that even though I’m taking care of both children, one of whom isn’t even biologically my child, I have to pay her alimony. The alimony is $350 / month. Now, if you do the math above, you’ll notice that I’m now at -$50 / month. On top of that, my ex is now working late into the night tending bar, so she’s not showing up in the morning to get our 2 year old son so that I can make it to work on time. I take him with me a few times, for about a week, and he’s super adorable so no one mentions anything, but where I go is called work, not a daycare center, and so eventually I’ve got to put him in daycare or risk losing my job. Daycare costs $500 / month. You math whizzes out there will see where this is headed.
I’m now 25 years old, I’ve worked my way through high school, college and have a few years of working in my trade under my belt, and here I am applying at Pizza Hut to be a delivery driver. My fellow drivers spend all of their money souping-up there Honda Civics and still have zits between their four mustache hairs. They’re white kids from the suburbs of a very small city and they listen to Em & Em and call each other “nigga”. I hate the job, but at least the majority of it is spent in my car driving around by myself. Plenty of time to listen to music and smoke cigarettes and be alone. The pizza delivery job goes from 6 to midnight, and I still have my nine to five.
I eventually leave my house. At first I rent it out to my ex and her room mate, who live together with my kid, but as the rent falls behind and then is refused to be paid, I have to evict them. I try renting it out to other people, but at this point housing prices have already started to slide, and I would have to rent it for less than I owe on it every month. Then I find out, in my mortgage agreement, I’m not even allowed to rent the thing. I try to work with the bank on that, but they’re adamant.
I’ve been taking care of my credit since I paid all of those other past due bills off to initially get the house. If I default on my mortgage, that’s seven years where I can’t get a line of credit again, and I’ll probably never be able to buy a home again. It’s stressful. It seems so unfair and I’m angry and feel cheated. Then that little kid who stole CDs from Columbia House all those years ago started peaking out of the back of my mind.
I’d spent so many years trying to be the right person: get a house, pay your bills, buy a car, be the whole American dream. While I was doing it, I felt like I was making something of myself, something my parents could be proud, a contributing member of society. Now it all seemed so hilarious to me. The bank wasn’t going to throw me in jail for not paying my mortgage, they’d just take the house back. Great! I didn’t want it anyway, it was a pain, and the only thing I had in it of any value was memories. News flash, memories come with you wherever you go, and are in no way confined by location. I just quit paying on the thing, moved into a small apartment with my son and my new girlfriend, and life went on as planned. Actually, much better than what I’d planned.
Sure, my credit sucks, but you know what? Who needs it? You only need good credit if you buy into the whole sham of a system that is credit. It is not required to have credit to exist. You don’t need a car, I’ve lived for nearly 5 years now without one and am only healthier and richer for it. You don’t need to own a house, in fact, for someone like me, a traveler, an adventurer if you will, a house is a cage. Houses don’t have landlords who come over and fix things for free, they have you and a pipe wrench wasting your Saturday morning. And anything that you want, well believe me, it’s better to buy it with cash. These reasons are obvious, but I’ll list them out anyway:
- When you buy with cash, you need to first save up that cash, which takes time. Time gives you the ability to think things over. The 25 seconds it takes to pull out your credit card and pull up the Apple website is not enough time to consider whether or not this is something that’s really going to be valuable to you a month from now.
- Spend $100, not $220. The house I bought was $80,000. I got an amazing 4.5% interest rate somehow, and by the time I’d paid the whole thing off (in 30 years), it would have cost me $145,000. Your average credit card has somewhere between 16-20% interest, so every month you leave $1000 ride on there, the credit card company is basically taking $200 extra dollars out of your pocket.
- Be your own person, be independent. Americans are always so prideful of how we’re independent, how we make decisions for ourselves, how people can come up from nothing and become something. How is that feat astonishing if you need big corporations to do it for you? The same big corporations who are keeping you down all the while. Our grandfathers knew that when you want something, you work hard to get it. You don’t get it and then work hard to pay it off, that’s cheating. My grandfather would call that weak.
- And the single greatest part of not using credit is that I’m no longer part of the system. Which means I don’t have to play by their rules. Which means that when they decide they’re going to exert their power over me and try and crush me like a top hat, they have absolutely no power. If my cell phone company tries hitting me with a bunch of outlandish, unfair charges, I just quit them. There’s always another cell phone company out there, always. The worst AT&T can do to me is report me to the collection agencies, who can lower some meaningless credit score that means nothing to me, because I never need to use it.
It’s all pure genius and wonderful. I’ve robbed them of their power by simply not playing their game. It’s a lesson every school kid who’s got a bully learns, and if it sounds morally unjust to you, then that’s fine, I can understand where you’re coming from. I tried following that logic myself for so long. But realize that right now a trillion of our dollars are going to prop up financial institutions who have been basically stealing from us for the past 5 decades or longer, and now that they’re collapsing — precisely because they’ve been screwing over the people who support them — they’re asking us to prop them back up. And we’re doing it! That’s the really sad part. The President, Congress and everyone else tell us we have to do this because if AIG or some of these other institutions collapse, the whole system will collapse. So? So what? How will it collapse? Will your clothes suddenly not provide warmth anymore? Will electricity stop flowing to your house? Will all of the worlds livestock and farms suddenly die? No. Our imaginary world we’ve created, where we need to grow in order to survive, like the fat we’re growing around our guts we need to grow the fat around our economy and we’re all so afraid to just go on a diet, slim our asses up and get with the idea that life is not a matter of credit. Life has absolutely nothing to do with credit, default swaps or mortgage assets. And if you don’t realize that, you may not be alive anyway.