My Mom Trashed My Credit Score When I Was a Kid

The caller wants to consolidate debt and improve her credit score to eventually buy a car and a house. She has over $1,000 in savings, nearing $10,000, and contributes 15% to retirement through a 401k and IRA. Her primary debt issues stem from her birth mother fraudulently using her information for two credit cards, now in collections, totaling $1,500. She also has $1,500 in medical debt, having paid off 80% of it. The host explains that their approach doesn't focus on credit scores because they are simply a measurement of how one handles debt, and their philosophy is anti-debt. A credit score reflects debt levels, usage, duration, and mix, all of which are irrelevant when aiming to live debt-free. Paying off debt, including the $1,500 credit card debt and medical debt, will naturally lead to a disappearing credit score, which is a positive outcome. This means the score will become indeterminable or zero, which is as good as a high score for purposes like renting an apartment or buying a house. The approval process for a mortgage would involve manual underwriting instead of standard procedures. The host emphasizes that chasing a credit score often leads to more debt. The caller acknowledges societal pressure to rely on credit scores but is encouraged to consider that companies benefit from people being in debt, hence the promotion of credit scores. Conversely, no financial institution profits from a zero credit score, so it's not heavily advertised. The host shares personal experience of buying a house without a credit score through manual underwriting. The core message is that a credit score is not necessary for major purchases like cars or houses if one plans to pay cash. The host illustrates this by describing buying a car with cash, where the dealer was more interested in the money than the credit score. The goal is to reset the caller's perspective, encouraging her to save cash for desired items, which sets her up for long-term wealth.