Living without credit: a new kind of freedom

I am that most unusual of Americans, a person who lives entirely without credit. My cars--which are serviceable but quite old--are paid for in full.  I don't have any credit cards whatsoever. I live in a rental apartment and have no desire to get a mortgage.  We're not interested in department store cards, no "no-money-down" furniture deals, no "no payments until 2008" car loans---no credit lines whatsoever. Honestly, most of it sounds crazy to me at this point.

Sometimes I feel like a pariah,  particularly when I need to reserve a rental car or hotel room and get the sense they're nervous about me. But much of the time I feel independent, in control and free from the slavery of credit card interest rate hikes, upside-down car loans and jerk-you-around adjustable rate mortgages.

Now, don't confuse me with those rare human beings who are thrifty, skilled at managing their budgets and loaded with personal savings.  I'm none of the above, honestly.  I live without credit because my family went through a series of nuclear financial events (disabling pregnancy, sickness of a child, complete collapse of the industry we worked in) which destroyed our credit rating. 

And I'm not going to pretend to be one of those admirable types who made some kind of heroic turnaround, either. Somewhere in the series of cataclysmic events that took us out financially, there might have been some way to stanch the bleeding sooner and leave us in better financial health.  If there was such a path, we never found it.

But what I am here to do is give you a glimpse of life without credit, and reassure you that despite societal expectations, you don't need a good rating to make your way in the world. There's no question that you need a decent income to live comfortably, but you don't need to take on big debts and use the income to service them.

Knowing that is a kind of freedom in and of itself. 

You know, as a younger person,  I spent years developing an anxiety disorder over the state of my credit. When I couldn't pay a bill exactly on time, I had cold sweats and couldn't sleep at night.  I wanted to know what my credit rating was, and exactly what the impact was of various problems, but I didn't know who to ask.  In truth, I think I was afraid to find out, though that probably made my fears worse.

I couldn't imagine how I'd ever get anyone to rent me an apartment if my rating got trashed. I didn't think I could survive without my handy-dandy credit cards to pay for anything I couldn't afford at a given moment.  I knew I'd never have a car again without credit. I felt waves of shame wash over me whenever I considered the idea that I wasn't A-1 all the way.

Sure, there's a practical side to these worries.  After my credit fell apart, I did lose some housing options, and I didn't have the quick-and-easy means of borrowing money that credit cards represent.  I was also turned down for bank accounts a few times, an experience which, let me tell you, feels insulting in the extreme.

Still, I got through it one step at a time. I found a landlord who'd look at our whole history rather than the dents, pulled together enough cash to buy a starter car, started saving a bit...and noticed a kind of fog lifting. I began to realize that though I was on the fringes of capitalism, there was still a life to be lived. I wasn't nobody, I wasn't bad, I wasn't stupid and I wasn't irresponsible. I'd had some bad financial problems, and that was it. Period.

In reality, I was in a bubble where everyone made the same assumption--that having lines of credit is a form of validation every young professional needs to have self-esteem and a place in society. (Truly masterful banking propaganda has us all believing that, sad to say.)  I couldn't see myself as a success, despite having a wonderful husband and baby and career, unless I could get other people to lend me money.  Pretty screwed up, eh?  Actually, pretty normal.

The truth is, we've set up credit in a place it doesn't deserve whatsoever, as some sort of initiation into various stages of adulthood.  Nothing spells that out more clearly than the recent series of Chase television ads showing an adorable couple proceeding through life, taking on a Chase credit card at each stage as they marry, have children, have grandchildren and grow old together.  United through credit...isn't that romantic?

If there's anything that losing my credit rating done for me, it's broken the unbelievably strong link credit had with self-worth, self-management and self-satisfaction.  I'm not going to tell you that I'm never going to take out a loan again--though it will have to be under very controlled circumstances--but I can say that I'll never give the evaluation of bankers quite so much significance again. I'm living my life without the lending industry's approval, and you know what?  That's just fine with me.