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Money Credit Score

Credit Score 

A credit score is used any time a company wants to determine the risk of default. From bank accounts, apartment applications, applying to financial related jobs, mortgages, interest rates or eligibility for lines of credit, and even car insurance can pull your credit to determine risk. Credit scores range From 300 to 850 with a 720 being benchmarked as an average decent score.

How to build credit

How to Build and Maintain a Strong Credit Score
Building credit isn’t complicated—but it does require consistency, patience, and a few key habits. Your credit score is a reflection of how well you manage debt, and it can impact everything from loan approvals to job applications and insurance rates. Here’s how to build it the right way:

  1. Keep Accounts Open for the Long Term
    The longer your accounts have been open, the better. Do not close old credit cards, even if you don’t use them often. Closing them erases your long-standing credit history, which can lower your score.
  2. Always Pay Your Bills on Time
    Timely payments are one of the biggest factors in your credit score. This includes rent, utilities, credit cards, mortgages—anything reported to credit agencies.
  3. Open and Maintain a Checking Account
    While a checking account itself isn’t reported to credit bureaus, having one is often the foundation for building good financial habits and may be factored in for things like renting an apartment.
  4. Use Credit Cards Responsibly
    • Keep balances below 30% of your credit limit at all times.
    • Pay them off in full each month to avoid interest and maintain strong utilization history.
    • Avoid maxing out your cards—even temporarily during the month.
  5. Maintain Long-Term Installment Debt (When Necessary)
    Having long-term debt like student loans, auto loans, or a mortgage can improve your credit mix, which is another scoring factor. As long as you make consistent payments, these can help—not hurt—your score.

Tools to Monitor and Improve Your Credit

  • Credit Karma1 – A free platform that provides an estimated credit score along with tips to improve it. It also monitors your credit and alerts you to changes.
  • AnnualCreditReport.com2 – You are legally entitled to one free credit report per year from each of the three major credit bureaus. Pull all three reports annually to check for errors or inconsistencies. Each bureau may have slightly different data, so reviewing all three is essential.
    • Equifax
    • Experian
    • TransUnion
  • Mint3 – A free personal finance app that links to your bank and credit accounts, categorizing your spending and helping you spot trends and opportunities to improve your financial health.

Protecting Your Credit
Because identity theft is on the rise, it’s wise to place a security freeze4 on your credit at all three agencies. This prevents unauthorized accounts from being opened in your name. Freezes can be lifted temporarily if you need to apply for credit and reactivated afterward.

How to destroy your credit

There are a few different alternatives of how you can approach this depending on what resources are available and what will be left. The following is a list of steps of how to properly sequence the complete destruction of one’s credit score in the most financially profitable way. While this approach is extreme and not for everyone, there are scenarios—especially involving overwhelming debt—where wiping the slate clean is the only way forward. The goal here is to do it with intention, not recklessness.

⚠️This is not legal advice. Some actions may be considered fraudulent if not handled properly. Consult a debt counselor or attorney before proceeding.

Step 1: Identification of Assets and Debt

  1. Identity all assets, their approximate worth, any of their associated outstanding debits 
  2. Identify individuals names that appear on the assets and the corresponding debt
  3. Make a determination if any of the Hard Assets can be or are desired to be kept
  4. Assets include bank accounts, brokerage accounts, anything with a title such as homes, rental properties or vehicles
  5. Assets that do not have a title such as jewelry, collectables, art or personal items are not considered assets for this section as they are personal items. These assets are unaffected as any liens can not be placed upon them. Business inventory assets that can be sold for cash however are assets and can be taken for repayment if judgment is rendered against you.

Step 2: Identification of different types of debts

  1. Uncollateralized debts (No Assets Tied To Them)
    1. Medical bills, credit cards, cell phone bills and many others
    2. These are considered uncollateralized debts that can go unpaid with little to no recourse from the creditor
    3. Recourse options: phone calls, letters, negatively affecting your credit score, lawsuit
    4. Creditors will not come after people that do not have any assets or low future expected income. This is because the cost of a lawsuit is higher than the money that can be recovered. Only when uncollateralized debts are extremely high and the creditor believes there is a chance to recover the debt. Then the creditor will engage in court proceedings to sue to acquire a judgment against people that owe them money. Creditors will then garnish bank accounts or place a lien on hard assets. This is extremely costly and undesirable for the creditor.
  2. Collateralized debts
    1. Home, Car, Boat, Rental property, anything that a physical asset is pledged to pay for if payments are missed
    2. These are collateralized debts that the creditor can repo the asset 
    3. The additional cost of repossession will be added to your bill and will also negatively affect your credit score

Note: Judgment Proof = Poor = A Good Thing

  1. If you have massive outstanding uncollateralized debt and high debts on your collateralized assets you are essentially judgment proof. This means no uncollateralized creditor would be willing to come after you with legal judgments because its to costly and they are highly unlikely to get any money if they win
  2. If you have massive outstanding uncollateralized debt but have a business, home with lots of available equity, lots of cash sitting within bank or brokerage accounts. Uncollateralized Creditors might find it worthwhile to go through the court case to acquire a judgment against you and place a lien on the house or empty your accounts.

Step 3: What should be kept

  1. Collateralized debt which payments can be maintained
    1. Note: Interest rates on these debts might increase due to the fall in your credit score

Step 4: Affecting the Fewest Number of People

  1. The individual that will be destroying their credit will maintain ownership of all debits and remove their name from all of the assets
  2. Any individual that does not want their credit score negatively affected will have to get their names removed from all debits

Step 5: Transfer of Ownership

  1. Transfer the ownership of all assets, with no associated debts, to an unaffected party that will not have their credit affected
  2. This other party needs to be someone that can be trusted with all of your money and understands what is trying to be achieved.
  3. This step is situation specific as it can be viewed as fraud, which is illegal, a debt counselor or attorney should be consulted if this step is desired 

Step 6-7: Start Cashing In

  1. First: Find out if the assets that will not be kept, hold any financial value
    1. Determine their current worth and subtract the loan balance
    2. If this number is positive then determine if cash out refinancing or selling the asset will provide a higher financial gain
    3. Assets such as cars that have loans should not be sold without paying off their corresponding debt, this is considered fraud or theft leading to jail time
  2. Second: Assets that will be kept should get paid off and transferred to an individual that will not have their credit score negatively affected. Unless you are judgment proof, then it doesn’t matter.

Step 6-7: Stacking Up Debt

  1. The individual(s) that will have their credit score negatively affected should begin accumulating as much unsecured debt as possible
  2. These new lines of unsecured debt should not be utilized and the balance should remain zero for the time being
  3. Credit cards are the fastest and most efficient method of doing this
  4. Spacing out the acquisition of each additional credit card to one card every month or two is more advantageous, for larger line balance offers and probability of approval

Step 8: Maxing out debts

  1. Once the credit card companies begin to decline lending additional credit
  2. Begin maxing out all credit cards, evenly distributing the balances among all cards until they no longer accept purchases
    1. This will prevent the credit card company from reevaluating your risk and lowering your limit unannounced
  3. Cash advances or buying assets that can be immediately sold for cash with little to no loss in value are ways of acquiring assets from debt

Step 9: Stop Paying

  1. Stop paying on all uncollateralized debts that are maxed out
  2. Stop paying on all collateralized debts that will be repossessed
  3. Keep paying on all collateralized debts that will be kept

Step 10: Prepare for the Worst

Acquire a prepaid cell phone that does not require identification to activate is one method of avoiding collection calls

Collection Agencies

If you currently have collection agencies calling to collect the following is a guide that will assist in having them stop.

  • Ask for the name of the person you’re speaking to, as well as the name address and phone number of the collection agency.
  • If you get a phone call at work, tell the person you are not allowed to receive phone calls at work. Collection agencies are legally obligated to stop calling you at work if you tell them to do so.
  • If you do not believe you owe the debt, ask the agency to send written proof, if you still do not believe you owe the debt after you receive the proof, you can dispute the charge in writing. The agency has to stop calling you until the dispute has been resolved.
  • Write a cease-and-desist letter. They are not allowed to call after receiving this letter. They can call to confirm receipt of your letter or to let you know that they are filing a lawsuit against you.
  1. Creditkarma.com ↩︎
  2. https://www.annualcreditreport.com/requestReport/landingPage.action ↩︎
  3.  Mint.com ↩︎
  4.  Equifax.com / my.equifax.com/membercenter/#/login
    TransUnion.com / transunion.com/credit-freeze
     Experian.com / experian.com/freeze/center.html#content-01 ↩︎