Caitlin, 27, from Shreveport, La., called The Ramsey Show recently with a story that starts with identity theft and ends with a question many people ask: How do I fix my credit score?
“Whenever I turned 18 and I went to college, I found out that my birth mom had used my information on a house loan, a vehicle loan, and two credit cards,” Caitlin explained. The fraudulent credit cards totaling $1,500 are still in collections. Combined with $1,500 in medical debt, she has $3,000 total debt.
On the plus side, Caitlin has nearly $10,000 in savings and is contributing 15% to retirement. She wants to buy a house and vehicle but her credit score is only 580 (up from 330). FICO scores range from 300 to 850. “Everybody’s always preached like you can’t do anything without a [strong] credit score,” she said.
Host Jade Warshaw told Caitlin to stop obsessing about the numbers. “Over here we don’t really care about credit scores,” she said”. And the reason that we don’t care about credit scores is because [they] are just a measurement of how you handle and deal with debt. And since we are anti-debt, there’s no use for a credit score.”
Most people treat a FICO score the way they treat a GPA: the higher the number, the better. Warshaw’s point is that it was built by an industry that profits when you borrow, and it measures only one thing: how enthusiastically you participate in debt.
What Your Credit Score Is Actually Measuring
Warshaw explained that a FICO score considers debt amount, frequency of borrowing, utilization percentage, longevity, and debt mix. Every single component requires you to be actively borrowing money. Pay everything off and stop taking on new debt, and the score does not plateau at an excellent number. It eventually disappears.
“When you pay off this $1,500 medical debt, when you pay off this $1,500 credit card or get it expunged, then what’s gonna happen … if you decide, ‘Hey, I’m just not gonna borrow money?'” Warshaw said. “Your credit score is gonna disappear. It takes about 6 to 12 months for a credit score to completely disappear. It’s not a bad thing. It’s actually a very positive thing.”
This is the mechanic most people have never been told. A zero or indeterminable credit score simply reflects the absence of debt activity.
The Marketing Machine Behind the Number
“Companies want you to take out debt,” Warshaw said. “Therefore, it is in their best interest to create a score around that, something that consumers want, something that feels gamified, right? There’s no money on the other side of a zero credit score. There is no financial institution that benefits from you having a zero credit score. Think about that. Therefore, there’s not gonna be any commercials about it.”
You have probably seen hundreds of ads about building credit, protecting your score, and monitoring your FICO. You have seen zero ads celebrating the moment someone’s credit score disappears because they paid off everything they owed.
Strip away the credit score anxiety and Caitlin’s position is strong. She has nearly $10,000 in savings, is contributing 15% to retirement, and only owes $3,000 total. She could pay off every dollar of debt she owes and still have most of her savings intact. The fraudulent items on her report should be disputed directly, not worked around by chasing a higher score through consolidation.
Consolidating debt to raise a credit score is the wrong goal, Warshaw said. It restructures debt rather than eliminating it, and it keeps the score-generating activity alive when the better move is to end it.
What Happens When You Need a Mortgage Without a Score
The practical objection most people raise is homeownership. Warshaw addressed it from personal experience: “Until I bought my house, I went years without a credit score,” she said. “And then when it was time to buy the house, we did manual underwriting.”
Manual underwriting evaluates a borrower using payment history on rent, utilities, and other recurring bills rather than a FICO score. Warshaw’s position is that an indeterminable score works just as well as a high score through this process. Co-host Ken Coleman reinforced the point with his own cash-only car purchase, noting the dealer never asked for his credit score.
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