Your Credit Score Is a Debt Score, Not a Wealth Score

Your credit score doesn’t measure wealth. It measures how good you are at borrowing money and paying it back.

That’s it. That’s the whole game.

Once you understand this, the obsession starts to look absurd.

The Tale of Two Scores

Let me tell you about two people.

Person A has a CIBIL score of 760. He has significant savings and investments. He earns more than double what Person B earns. He has zero debt.

Person B has a CIBIL score above 800. His net worth is negative. He’s still paying off personal loans and vehicle loans — not even for assets, just stuff.

Person A is me. Person B is my friend.

By the logic of credit scores, my friend is more “creditworthy” than I am. His score is better because he’s proven he can juggle multiple debts and keep paying. He’s a good customer — for the banks.

I’m a terrible customer. I don’t borrow. I don’t pay interest. I don’t make banks any money.

So who would you rather be?

Here’s the kicker: my friend recently paid off his vehicle loan. His score dropped below 800. He was genuinely upset about it.

Think about that. He did the responsible thing — eliminated a debt — and the system punished him for it. Because the score isn’t measuring financial health. It’s measuring how actively you’re playing the debt game.

The Score That Rewards Debt

Early in my career, a tech lead at my company told me his score was above 800. I was impressed — I thought a high credit score meant you were winning at money.

Then he explained how he got there: he took loans to buy things even when he had the cash. His bike. His laptop. Things he could have paid for outright. But he financed them instead — just to build his score.

This is the absurdity we’ve normalised. Taking on debt you don’t need, paying interest you don’t have to pay, just to prove you’re good at… taking on debt.

The influencers will tell you to take a “mix of loans” to improve your score. But here’s what they don’t tell you: every loan is money flowing from your pocket to the bank’s. Every EMI is a slice of your freedom handed over. And for what? A three-digit number that says you’re good at making banks rich.

Why This Score Exists

Credit scores exist to help lenders decide whether to give you money. That’s the entire purpose.

A high score tells banks: “This person borrows and repays. We can make money off them.”

Notice what’s missing from this calculation: your net worth, your assets, your savings rate. None of that matters to the score. A person with ₹10 crores in the bank and no borrowing history might have a lower score than someone drowning in debt but making minimum payments on time.

The score measures debt performance, not wealth.

India Is Not America

In the US, your credit score follows you everywhere. Landlords check it before renting you an apartment. Employers check it before hiring you. Car rental companies check it.

India is different. Here, your credit score matters primarily when you’re taking a loan. That’s about it. Most landlords aren’t pulling your CIBIL report before renting you a flat.

The American obsession with credit scores makes some sense in their context. The Indian obsession is largely imported anxiety — fueled by fintech apps that gamify your score and influencers who need content to post.

What Actually Matters

The numbers you should care about: your net worth and your income. These determine your real financial position. These give you options. These let you sleep at night.

When you have genuine financial strength — high income, significant net worth, stable employment — the score becomes a formality. Banks aren’t going to turn away a clearly wealthy customer because their CIBIL is 760 instead of 810.

A credit score of 850 with negative net worth is a tragedy dressed up as an achievement.

Use credit cards and pay them off in full. This gives you a score without paying a rupee in interest.

Check your score every three months — not to obsess over the number, but to make sure there are no unfamiliar accounts. Fraud happens. Loans get taken in your name without your knowledge. Your quarterly check is a fraud detection mechanism, not a performance review.

Don’t take loans to build your score. You don’t go into debt to prove you can handle debt. You stay out of debt because debt costs you money and freedom.

Focus on net worth. Every month, your goal should be to increase the gap between what you own and what you owe. That’s the only financial score that matters.

The Freedom Perspective

I agree with Dave Ramsey on this: a credit score is an “I love debt” score. The only reason I have one is because I use credit cards. If I didn’t, my score would eventually disappear — and I’d be fine with that.

The real flex isn’t a score above 800. The real flex is not needing to borrow at all.

My score is 760. I have zero debt and zero stress about money.

I’m not trying to impress the banks. I’m trying to be free.

“The borrower is slave to the lender.” — Proverbs 22:7