In considering my 5-10-20 year goals recently, one of them is to not use debt - whether credit card, mortgage, car loan, etc - even on a monthly basis. I currently am young, single, and have no debt and significant savings so this is definitely feasible.

However, I suspect after a certain period of time this style of living would really mess with my credit score (which is currently very solid).

So my question is:

  • How long does it take completely not utilizing debt (including credit card or other revolving debt, canceling all credit cards) before your credit score... disappears?
  • 5
    If your plan is to not use debt, why do you care what your credit score is? Mar 17 '13 at 19:43
  • @DJClayworth I was going to ask another followup question (about what effects other than trying to find new debt - mortgages, etc) to find out whether there are additional negative effects for having no credit history
    – enderland
    Mar 17 '13 at 20:54
  • 2
    @DJClayworth: It might cause a problem for things like insurance rates if live in a state where they are allowed to use your credit rating in setting premiums. Mar 19 '13 at 1:31

When accounts are completely closed, they may still appear on the credit report 10 years later. Note - I'm not supposing this, I pulled a report a couple months ago, and it shows a mortgage paid in full in July, 2003. I'll see if it actually falls off when I pull the report later this year. There's no law that good details must be removed after that time.

It's not the lack of use, but the closing of accounts that would impact credit history.

In my opinion, avoiding ongoing debt is fine, but it's 'fringe' to do it so extremely that you find you have no credit history. Trying to rent a car or hotel room on a debit card isn't so simple. When I rent a $200 hotel room, a bit more than that is frozen to account for mini-bar, room service, etc. You might have $2000 in your account, and between room, car, and gas purchases, see it all frozen when you only intend to spend $1500. Last, try to get a mortgage with no credit history at all. It won't be easy.

All the above issues can be avoided by finding one or two good credit cards with no fee and using them to fill the gas tank every few months. Doing this on purpose seems an unnecessary way of complicating one's life.

(Admittedly, there are people who go to the other extreme, trying to get the most in rewards, and treating it like a game. No need for that, either. I enjoy the game but am not an advocate of it for those who wish to keep things as simple as possible.)

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