Credit vs. Debt: The Lie Behind Your Credit Score

Written by J.Bankston   // July 11, 2011   // 16 Comments


“Simply put, semantic infiltration is the process whereby we come to adopt the language of our adversaries in describing political reality. The most totalitarian regimes in the world would call themselves ‘liberation movements.’ It is perfectly predictable that they should misuse words to conceal their real nature. But must we aid them in that effort by repeating those words? Worse, do we begin to influence our own perceptions by using them?”
          – Sen. Daniel Patrick Moynihan (D – NY)

Semantic infiltration, a term first introduced in a 1972 Cold War column by Fred Ikle, permeates nearly every facet of our culture today. Consider these common examples:

  • POLITICS: “Pro Life” vs. “Pro Choice.” Each of these labels represents a not-so-subtle attempt to frame the abortion debate. After all, how could anyone be against “life?” On the flip side, who doesn’t value individual “choice?”
  • BUSINESS: “Salesman” vs. “Client Services Associate.” Ever notice no one hires salesmen anymore? They’re all “associates” or “advocates.” So let your guard down, Mr. Consumer, and let our “Client Services Associate” sell you something!
  • ENTERTAINMENT: “Musical Artist” vs. “Justin Bieber.” OK, that’s just a cheap shot.

You get the point. Words matter. Labels matter. They subtly frame the way we perceive our world. Think of the word “credit.” Look it up in the dictionary and you’ll find synonyms such as “commendation,” “distinction” and “acknowledgment.”

Look up the word  “debt” and you’ll find synonyms like “deficit,” “encumbrance” and “liability.”

So how would the way you perceive your “Credit Score” change if it was instead referred to as a ”Debt Score?”

After all, Debt Score may be more accurate. “Debt” is not as pretty to think about as “Credit,” but you use that score primarily to accumulate debt. What else is it good for? What else can it do? That score is the reason you have debt.

If at this point you’re thinking, “That’s not true. Creditors use my credit score to determine my ‘overall credit worthiness,’” do yourself a favor and stop reading. You’ve already “adopted the language of your adversaries.” As such, you belong to them.

Credit Score sounds positive. Debt Score sounds negative. Don’t forget – no credit history is the same as bad credit history, as far as your score goes. If you’ve been responsible enough with your money to have never borrowed a dime from anyone in your life, you will have a terrible credit score even though you’re a demonstrably responsible human being.

Your creditors make money by lending you money, so they want you to feel good about accumulating debt. They want you to think about your debt in terms of credit. For those of you who think there might be something to this, but doubt the presence of pre-calculated semantic infiltration, consider this:

Fair Isaac Corp. invented the credit score back in the 1960s. Fair Isaac’s FICO score – what you know as your credit score – is industry standard for lenders.

Fair Isaac is largely business-to-business sales: They make their money tracking and selling consumer credit information to lenders. But Fair Isaac does have a consumer division, called myFICO. This is where consumers can go to learn about how credit scores are calculated and buy a credit report and score from Fair Isaac.

The  Credit Education tab at explains in painstaking detail how scores are calculated.

Follow the link and you’ll find the word “debt” does not appear anywhere on that Web page.

Don’t be a slave to your debt to feel good about your “Credit Score.” If you have a great score but you’re buried in debt, do what you have to do to become debt free. You’ll have a lower “Debt Score,” but you’ll be a happier person.


  1. By Mark Chen, February 24, 2019

    I’m not sure if I understand your point. What if I want to finance a car purchase or buy a home in the future? Don’t I need to be concerned about my FICO score to accomplish these goals, whether it is a “credit score” or a “debt score”?

    • By JBanks, February 24, 2019

      This is a great point, Mark: Your credit score is important only if you want to borrow money. Even then, it’s less important today than it was five years ago. Lenders are turning more and more to metrics like Debt-to-Income ratio to determine lendability. You can carry $20,000 in credit card debt and hold a 750 FICO score – and no one will lend you money. The recent rash of defaults have made lenders wary of a consumer’s ability to repay a loan, regardless of how high your score may be. So if you’re buried in credit card debt that you can’t pay off yourself, but you’re shy about getting help because you want to protect your “credit” score, you’re wasting time and money. Get the help you need, take the hit to your credit and pay off your debt. Then repair and rebuild your credit – while you do, you can build some better spending habits and ensure you don’t fall into the same “credit” trap again.

      • By Mark Chen, February 24, 2019

        I understand your point better now. Thanks for explaining.

        As far as I have heard and read, FICO scores still are quite important. If lenders are placing greater weight on debt-to-income ratio, a consumer still needs to watch his or her credit score if a big purchase is planned.

        Carrying $20,000 in credit card debt does not mean a lender will not lend to you, even if DTI is a key factor. The question is does the $500-600 in required payments on the $20,000 leave the consumer with a DTI that shows he can afford the new payment or not.

        I agree that “if you are buried in debt and can’t pull yourself out” that a more radical approach may be warranted. A person in that situation should avoid taking on new debt, if possible.

        Someone with a 750 FICO score who is making her or his payments as agreed is a less ideal candidate for outside help via debt relief programs, in my view.

        • By JBanks, February 24, 2019

          Fair points, Mark, but you said it yourself in so many words: Your credit score is important only if you have plans to use it on a big purchase. If you have no plans to accrue more debt, it’s OK to hurt your score to get out of debt. You can always repair and rebuild your credit afterward. Who do you think is a generally happier person? The guy with a 750 credit score and $20,000 in high-interest credit card debt? Or the guy with a 500 FICO score, no credit card debt and five grand in the bank? The answer seems obvious…

          • By Mark Chen, February 24, 2019

            You set up a false dichotomy, imo. For one, the person with 750 FICO and $20K in debt does not necessarily have high interest rates. If s/he does, then s/he is doing something wrong. Even today, there are low dollar balance transfer offers that can speed up the paydown time, without harming credit.

            I think the first option should be to look at ways out of debt that don’t harm credit. Start with a thorough budget review. Then, look at low interest debt consolidation, aggressive paydown options (using the snowball or avalanche strategy) or balance transfers. Next, if interest rates are a problem, a credit counseling program is a good idea, as long as one can afford the program payments. Next on the tree is debt settlement, again if the payment is affordable and the credit hit and collection efforts are acceptable to the individual. Lastly, bankruptcy.

            I do agree that one should not over-emphasize one’s credit rating, but one should not pay it no heed. Lastly, don’t forget that there are times where bad credit can cost you a job, a place you want to rent, or a hike in insurance premium, so one should not be cavalier about actions that harm a credit score. Prudent cost/benefit analysis should be undertaken, looking at all the pluses and minuses, before any decision is made.

          • By JBanks, February 24, 2019

            Your straw man with the 750 FICO and the $20K in credit card debt likely has a hole in his budget, Mark. One that he’s plugging with Visa and Mastercard. IF you have a boatload of debt AND you can’t afford to pay it off yourself THEN get help paying off the debt, even at the cost of damaging your precious FICO.

  2. By Tax-y Lady, February 24, 2019

    I agree with you that the score is about debt and what you do with it. I also think that if you have debt now (or have in the past) and pay it off, it won’t hurt your “credit” as much as one might think. Not only does your credit score encompass the type of credit used, but also when you got new credit, the time you have held your accounts, the debt to credit ratio or amounts owed, and your payment history. I think most Americans of my generation see houses as mortgages and education as student loans. Many see cars as vehicle loans too. If you keep on top of it and don’t gather too much debt, utilizing your “credit score” in the right situations can help you get where you need to go, when you need to get there. I think of it in terms of what value do I see in the short and long term from taking on any type of debt right now? And then if I decide it is worth it to me, I put a plan in place to ensure I have no problems repaying the debt timely, and with as few fees or interest accruals as possible.

    • By JBanks, February 24, 2019

      Very well-said: In today’s pernicious debt culture, too many of us do not prioritize or defer gratification. We want something today, we go charge it today. FICO, creator of the “Credit Score,” works for your creditors, and your creditors are profitable only when you’re accumulating and paying on debt. It’s in your creditors’ interest, and thus FICO’s interest, that you feel good about accumulating debt. I believe FICO created the moniker “Credit Score” with this precise end in mind. We’ve all been manipulated by master marketers – and that’s fine! But don’t tread water with $20K in credit card debt because you want to protect a magic number that’s sole use is to allow you to accumulate more debt!

  3. By John Dough, February 24, 2019

    Although the point is taken that the overall use of the FICO score is to determine “debt” worthiness, not all American consumers are able to purchase large ticket items in cash. I welcome being able to purchase a car on credit if in fact I am able to pay for it in the predetermined amount of time. Keep in mind that large purchases generally are at a much lower interest rate than credit cards. I also agree strongly that swimming around at a debt balance of 20K is dangerous.

    • By JBanks, February 24, 2019

      If you have enough money for a proper down payment and a low debt-to-income ratio, you’ll get a car loan regardless of your credit score. There are plenty of folks with 500 FICOs and no debt who qualify for car loans. And there are plenty of folks with high credit scores and a boat load of debt who can’t get financed. With a low credit score, you won’t get a very good interest rate, but that doesn’t mean much. On a standard five-year auto note, the difference in monthly payment between 6% interest and 12% is about 30 dollars a month for every $10,000 you borrow.

  4. By Rick, February 24, 2019

    I couldn’t agree more w/ the last three sentences of this article. Last year I had my credit score ran w/ about $7K in student loans. Last month I checked it again & it went up almost 100 points & that was after having paid off that $7K student loan last year 2010. I personally think credit score are overrated & my friends think I’m crazy. I’ll take having ZERO debt any day over having a “Good Credit Score” w/ debt….who wouldn’t?. I firmly believe in what The good book says “The barrow is the servant to the lender”.

  5. By Katrina, February 24, 2019

    There are some very good valid points here. I actually never really saw it that way. I always thought high credit score = responsible person, when in all actuality that is not necessarily the full truth. I mean a good credit score does show responsibility but really it’s like a catch 22. Thanks for opening my eyes to what my credit score is really telling me.

  6. By Salley Saver, February 24, 2019

    Very informative article on how the credit score is viewed.

  7. By dolrdolrbill, February 24, 2019

    Post college after racking up about $17k in unsecured debt, I thought making the minimum payments was a good thing for my credit. After seeing my balance never go down and them increasing my credit limit to $30k I knew that another approach was needed. After some research, I found three ZERO percent balance transfer offer. I split the the $17k over these three cards and knocked a huge chunk out of the debt in the first year. After the promotional rate was up, I transferred the remaining balances to one more ZERO percent card and it was gone within two more years. At this point, I was not just paying minimums I was trying to pay as much money as I could while it was at 0%. So if minimums are all you can afford once you get your debt to 0%, then this may not be the best approach to take. So there are ways around not damaging your credit to get out of debt. I guess me making my minimum payments and keeping my good credit score put me in a position for the zero percent offers that in turn got me out of debt.

  8. By Bobby T., February 24, 2019

    Great point JBanks! Loved the article. People work ridiculously hard at protecting their “credit score”, which is just a made-up number created by sharks who enjoy making billions off of people who don’t quite understand the bet their making on their futures. People are ignoring their bills and taking on debt all in the name of protection their “credit score” which is actually ruining them financially. Remember, you can’t pay rent with a credit score, and the grocery store won’t accept your credit score at the register, nor will your doctor or pharmacy. “Credit scores” do affect the interest on loans, but in most cases, if you have to borrow, then it probably means you can’t afford it. Too many people have unfortunately bought into the “credit score” scam and we’re seeing the consequences across the country as millions of people are struggling to stay afloat after buying houses, running up credit cards, and doing other things with their awesome “credit score”. I’ll take real cash over “credit” any day.

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