I’ve always had good credit by most peoples’ standards (maybe not yours, considering where we are.) But as our wealth has grown over the years, our actual credit score never seemed to change a lot, always ranging from … almost guessing here … the mid 700s to the upper-middle 700s. The numbers are vague because I never paid a whole lot of attention, but only “checked in” to our scores maybe once or twice a year at most.
Recently I’ve been considering paying off 100% of our debt. We didn’t owe much, but we had a small loan on one of our 4 cars (don’t even remember why that came to be, but it involved buying a car we had leased for 3 yrs) and a low-6-figure balance on our home mortgage with an interest rate of only 3-1/8%. I could not determine whether paying off all debt would raise or lower our credit score! Our accountant said he would have to go through enough details that the cost wouldn’t be worth getting the answer. Personally, I think he should have found out anyway, but I’m easy …
But a guy gets tired of various companies having all the keys to one’s checking account. At least I did. Everyone wants us to sign up for whatever they call their brand of “AutoPay” so they can grab their payments directly from checking. It is handy, I have to admit, and usually pretty much trouble-free. But it’s kind of scary and rubs me the wrong way, that we no longer have the right to define a payment amount, or refuse a payment, when something goes “wrong” or someone doesn’t do what they were supposed to, in order for us to pay their invoices. On the other hand, I seldom have to actually sit down and “pay bills” either. That’s handy.
So for the last 3-4 years, I’ve tracked our payments closely, and our credit scores on creditkarma (also known as Intuit, masters of QuickBooks and Quicken.) It’s pretty frightening to me, that my credit, or lack thereof, depends on a company that has such crappy financial software that barely, sorta, sometimes, kinda works if you’re patient and lucky. Then came the current market plunge, oh my! You folks probably don’t know there is one, since blue chip stocks don’t get their feathers ruffled near as much as “my” companies do, as they’ve lost roughly 60% (not a typo) of their value YTD. Of course, they will rise again one of these days, or years–hopefully before I kick the bucket, but whatever happens, it will be what it will be.
Until the last 6 months or so, our investing returns far outweighed any interest we were paying, so it was difficult to justify paying off any debt, let alone all debt. Financially, we were considerably better off to invest any funds which could otherwise have been used to pay off debt.
A couple months ago, the scale shifted ever so slightly. I decided, “Screw it, enough pondering.” Maybe the simple peace of mind from knowing we owed no one, would become worth even more than the (previous) investing gains. First, I paid off the car (easy), paid off the mortgage (not too hard) and even paid off my son’s student loans, which hurt only because he would maybe lose the lessons I wanted him to learn from the experience of owing for his education (and now he’s shooting for a PhD–should I feel very disappointed? Not.) I considered not telling him about the payoff, but Discover said for their part, they had to disclose to OOS (OneAndOnlySon), and of course that’s more honest. Hopefully, he’ll be grateful when he finds out, but that’s not the real point, is it.
But our credit score didn’t change! Well, to qualify that statement, it eventually began to creep upward ever so slowly, 1, 2 or maybe a few, points at a time until today, when I found our Equifax score reads 801. Hold off on the Champaign, Fools, the Transunion score sits at a miserly 794, the tightwads. Now, other than by winning the lottery or using cash instead of credit cards for our daily purchases (paid off monthly, of course, but the balances often become substantial during a month) I have no idea how I would further raise our credit score.
The best part of this experience though, is this: They can assign me any number they want for a credit score. I no longer give a shlt!
Another cool effect of this experience is that our first would-have-been-a-mortgage payment, was instead donated to Ukrainian refugees. Hey! I could get used to this debt-free stuff! Why didn’t you folks tell me? < Really, you did? > Oh. Darn. My bad.
Meanwhile, like so many goals and plateaus in life, 800 is so very anticlimactic, and means less than knowing the number of grains of sand in the Gobi *. But the journey … my friends, methinks it’s the journey that makes up our very lives. Oh, what a fantastic journey that can be.
- As of this instant, there are 864,971,461,387,372 grains in, or over, the boundaries of the Gobi, and 627,138,246,594 more from the Gobi, currently blowing over the Pacific, 82.17% of which will be carried to the Amazon rain forest, which is precisely what makes the rain in the Amazon. Seriously, it’s 100% true. Look it up. Well, except for the numbers, which are utter fiction. Or heck, maybe not, I mean, who knows?