“A high credit score does NOT equal success. The only way to have a good credit score is to go into debt, stay in debt, and continually pay your accounts perfectly — without adding too much debt or paying off too much. In other words, stay in debt for as long as you can. That’s not how you win with money.” — Dave Ramsey, American personal finance expert
Understanding how a credit score is calculated isn’t as simple as 2+2=4, where logic carries you cleanly to the answer.
It’s less a formula than a black box: how much you owe, how consistently you pay on time, how long you’ve been borrowing, what mix of credit you carry, how often you go looking for more.
Each factor gets weighted differently depending on whose model you ask, and none of the major scoring companies hand you the exact recipe.
You’re left reverse-engineering your financial life from a three-digit number and a vague sense of whether it moved up or down since last month.
For many of us, that history starts with our first credit card — the moment we get a taste of how borrowing lets us maintain a lifestyle that doesn’t quite match our income.
Nobody hands you a manual when the card arrives. You just get a piece of plastic, a limit that feels like permission, and the assumption you’ll figure out the rest as you go.
Most of us do, usually the hard way.
That’s not a matter of intelligence. It’s a matter of design — the system makes borrowing feel effortless in the moment, while pushing the real cost far enough into the future that it stops feeling connected to the choice.
My first credit card had a $1,000 limit, which for a college freshman in the early ’90s felt like a small fortune.
Nobody explained interest rates to me before I signed. I just remember the feeling of having something in my wallet that made me feel, briefly, like an adult with his life together.
By the end of the month, I had a $700 balance, an 18% interest rate, and a sinking feeling I’d done something I’d come to regret.
I still remember doing the math by hand, watching how slowly the balance moved even as I paid it down aggressively, and understanding for the first time that debt has its own gravity — it pulls at you quietly, whether you’re paying attention or not.
It was a lesson I learned early, and one I’ve stayed grateful for: the ease of borrowing and the difficulty of repaying are almost never proportional.
As I moved into adulthood — mortgages, car loans, home improvement projects — I became far more aware of how directly my credit score shaped the terms of the money I borrowed.
According to the Federal Trade Commission’s Consumer Advice website, a credit score is a number, usually between 300 and 850, that estimates how likely you are to repay debt on time, with FICO as the most widely used model.
It’s built from your credit report, and lenders use it to decide whether to extend credit and on what terms — including the interest rate you’ll pay.
A high score means lower risk and better rates; a low one means credit is harder to get and more expensive.
Some insurers even use credit report data — an “insurance score” — to help set your coverage and premium.
The Part of One’s Credit Score That Never Sits Right With Me
If you’re debt-free, and you’ve proven it consistently, why doesn’t that make you a superstar to the credit reporting industry?
Someone who pays off loans early, with no late or delinquent payments, satisfying every high-ticket loan they’ve taken on — that should be the clearest possible evidence of responsibility. Of character.
And yet that’s not how the game is played.
The more debt you carry, the higher your score tends to climb. For someone genuinely debt-free, that discipline earns nothing — no reward, no recognition, just the absence of the activity the system is built to measure.
So what are loans actually for?
At their core, they give you money now that you pay back later, plus interest, so you’re not stuck waiting until you’ve saved the full amount.
People and businesses use them to bridge the gap between what they need today and what they have in hand — a house or a car outright is out of reach for most of us otherwise.
But in today’s materialistic culture, loans have also become a way to play pretend — a way to look wealthier than you are, to keep up with the Joneses, to elevate your status without anything real behind it.
Let’s be honest: true financial freedom — walking into retirement with zero debt — isn’t something people brag about on social media.
Being debt-free signals responsibility and planning, and our culture doesn’t reward those with attention.
We’re far more interested in the bigger house, the fancier car, the exclusive vacation, without anyone mentioning how much debt is quietly propping up the illusion.
I suppose a high credit score earns its own bragging rights too, seeing as it’s built on all that open, actively serviced debt.
I realize this isn’t the popular take.
We’re surrounded by fictitious facades — the same way surgery and filters quietly rewrite what a face “should” look like, loans and debt let people rewrite what wealth “should” look like, for an audience only interested in what you have, not who you are.
What Financial Freedom Actually Buys You
Suze Orman put it well: “A big part of financial freedom is having your heart and mind free from worry about the what-ifs of life.”
If you think life stays stable indefinitely, I’d push back. Health issues, job losses, divorce — these find all of us eventually. No one is immune.
When I lost my job several years ago, it took almost a year to find another one — the kind of disruption that arrives without warning and leaves you wondering how you’ll get through it.
What actually got my wife and me through it wasn’t a great credit score. It was financial freedom — the fact that we didn’t owe anyone anything.
That’s what made a very bad situation tolerable instead of life-altering.
We live in a culture built on competition, and credit scores are no exception — everyone wants the highest one.
But carrying the highest score means carrying debt. As Dave Ramsey also says: “The only good debt is a debt that is paid off.”
That’s the credit score no one’s bragging about. Maybe it should be.