There are many of us who would like to extract ourselves from this system.
And you may be content to avoid all debt, and thus have no need or desire to participate in the system. But the system compels your participation. Depending upon your ultimate goal, you might choose to employ different strategies to address each aspect of the system.
Here are several aspects to the credit system,
Creditors reporting information into your credit history
Public records included into your credit history
Lenders pulling your credit report
Fraudulent usage of your credit profile
Lack of willpower to resist offers, barrier to reinforce your decision
Let us consider each of these in turn, and examine strategies to prevent fraud or misuse, and to mitigate the effects, or the exposure from each.
- Can you avoid or prevent creditors reporting information to your credit file?
Although, an appropriate quote from Shakespeare, "Neither a borrower nor a lender be" is relevant.
Creditors have the power to report negative information to your credit history to any or all of the credit bureaus, although they are not compelled to report any positive events. A debt sent to collections, or written off as uncollectable could (would?) appear on your credit history. And medical debt sent to collections would appear on your credit history, and this often happens when insurance companies delay payment. Erroneous entries can be removed by the dispute process, but that costs you time, and effort (a cost you are trying to avoid).
Note that you can declare Bankruptcy (Ch7 or Ch11), and the creditors will avoid reporting information as that could be construed as an attempt to collect a debt and a violation of Federal BK law.
- Can you avoid public records being added to your credit history?
A lien can be placed upon your property by a licensed contractor, for example, a plumber or an electrician.
A Foreclosure action would be reported against you, unless you have declared BK, and you are no longer responsible for the debt. A Short Sale would also be treated in a similar way.
A debt sent to collections would appear (see above).
You can be sued for collection of debts, and a judgement against you would appear on your credit history. Should you injure or damage someone (tort), and they sue you and gain judgement against your, then the public record of the judgement, or lien would appear on your credit history.
- Can you avoid Lenders pulling your credit report, and thus recording an Inquiry against your credit history?
As others have mentioned, you can opt out of prescreen offers. But these offers can be ignored, and really don't affect your credit report (they are a "soft" pull, and thus don't ding your credit score). And since you don't care about your credit history, they are basically irrelevant. And if you have frozen your credit, nobody can use the existence of the prescreen offer to apply for credit anyway.
You can avoid applying for any credit. And you can have your credit file frozen at each of the three credit bureaus. Having your credit file frozen will prevent others from applying for and fraudulently obtaining credit against your credit file. And a frozen credit file will also delay any application you might make, and thus help reinforce your willpower, should you be tempted.
- Can you prevent fraudulent use of your credit history?
You can freeze your credit at all three credit bureaus, which would prevent many avenues for fraudulent usage of your name and credit history to apply for credit. This would prevent many uses of your name and credit. But there are ways that fraudulent usage of your name/identity could still creep into your credit history.
And since any system can be hacked, given sufficient time and resources, it might even be possible for a nefarious actor to either obtain a copy of your credit history or even guess the password to un-freeze your credit file. Choose a strong password.
But can someone obtain your SSN, and obtain (or forge) your ID, and then (mis)use that information to lease an apartment, or claim to be you, and have some item appear on your credit score? Yes, possible, but much less likely.
- Can you prevent yourself from using your own credit? And create a barrier to reinforce your decision to not use credit?
Suppose in a rational moment you realize you have little willpower. And you need help to prevent using credit and thus falling into expensive debt. You can choose a very complex password for freezing your account, and then shred the copy of that password (or place it in trust with your attorney or trusted entity). Then you would be prevented from un-freezing your credit file until you remember the password (or you met some condition you placed with your attorney or trusted entity).
And now for something drastic.
- Can you prevent use of your credit file?
No, but you can (ab)use the system to prevent both yourself and others from effectively using the credit system, to either obtain credit in your name, or use your credit history.
Eliminate all debt.
Cancel all credit cards.
Payoff all loans.
You now have a thin credit file. And a lower credit score. Next, destroy your credit score using the "Nuclear" option to file BK (Ch7 or Ch13). Since you have eliminated debt, you have nothing to repay creditors. Your credit score drops about 200 points. Since you have no positive tradelines, your credit score will stay low. Your credit score will be very low, and those who might use your credit file fraudulently would have trouble obtaining credit in your name (and you will as well).