When she turned 18, Jessica from South Carolina found out her mom had been using her Social Security number since she was a toddler \u2014 racking up $186,000 of credit-card debt in Jessica\u2019s name.<\/p>\n
After hiring a lawyer, Jessica was able to have her credit wiped clean, but she\u2019s left with zero credit history and can\u2019t get a credit card.<\/p>\n
She called into The Ramsey Show to find out how she could recover from having her credit history wiped. \u201cNot even a secure credit card will touch me,\u201d she said.<\/p>\n
Jessica feels \u201cstuck\u201d and says she can\u2019t even buy a car with a co-signer. While she says some financial advisors suggested her \u201cbest option\u201d is to get married, co-host Ken Coleman flagged that suggestion.<\/p>\n
\u201cI want to challenge this idea that you\u2019re stuck because you have no credit score and that you have to get married in order to have a car,\u201d he said.<\/p>\n
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Read more: You don\u2019t have to be a millionaire to gain access to this $1B private real estate fund<\/a>. In fact, you can get started with as little as $10 \u2014 here\u2019s how<\/strong><\/p>\n Nor would it necessarily solve her issue. While credit scores aren\u2019t impacted by marriage, if a married couple jointly applies for financing on a large purchase, such as a home or car, Equifax says<\/a> lenders usually check both spouses\u2019 credit information.<\/p>\n So what\u2019s the solution?<\/p>\n It involves a pretty big \u201cparadigm shift,\u201d according to co-host Rachel Cruze. Jessica is focused on living her life around \u201chaving a great credit score.\u201d But, as Cruze points out, \u201cprimarily you use a credit score to go into more debt.\u201d<\/p>\n That paradigm shift involves living debt-free \u2014 without a credit card.<\/p>\n Consider that Americans owe $1.18 trillion in credit-card debt as of Q1 2025, according<\/a> according to the Federal Reserve Bank of New York.<\/p>\n And the average credit-card debt, per American, was $6,371 during this same period, according<\/a> to TransUnion\u2019s Q1 2025 credit industry insights report.<\/p>\n Plus, high annual percentage rates (APRs) on credit cards can make it even harder to get out of debt.<\/p>\n \u201cAlthough Federal Reserve rate cuts began in 2024 after two painful years of rate hikes, average credit-card APRs are still well above 22%, offering no relief to consumers who revolve balances from month to month,\u201d according<\/a> to Experian.<\/p>\n Story Continues <\/p>\n Thanks to her credit being wiped, Jessica is debt-free. She doesn\u2019t even have the option to apply for a credit card to get into more debt, \u201cso see that as a blessing,\u201d said Cruze.<\/p>\n While Jessica has a full-time job as a debt collector and makes $19 an hour, Cruze suggests she look for a side gig (or a higher-paying job) to earn some extra money each month that she could put toward a vehicle.<\/p>\n If she made an extra $2,000 a month, for example, she could save enough to pay cash for a $5,000 to $7,500 secondhand vehicle in a matter of months \u2014 no credit card required.<\/p>\n In a survey by Forbes Advisor, 58% of respondents said<\/a> card payments are \u201ctheir prime facilitator of higher spending,\u201d which is \u201ca reflection of the ease and perhaps the less tangible nature of using cards over cash, which seems to loosen the psychological purse strings.\u201d<\/p>\n And more than half (52%) of respondents are \u201cmore likely to make an impulse purchase when paying with a card compared to just 24% with cash.\u201d<\/p>\n \u201cSociety tells us you have to have a credit card to survive, you can\u2019t go to college without student loans and you\u2019ll always have a car payment. These are straight-up myths,\u201d according<\/a> to a blog by Ramsey Solutions.<\/p>\n On the other hand, living debt-free means \u201cnot buying anything unless you can pay cash.\u201d<\/p>\n Cruze says to start by coming up with a detailed budget and knowing exactly how much you\u2019ll need for basic necessities such as food, shelter, utilities and transportation. Everything else can go toward saving up for your biggest needs \u2014 in Jessica\u2019s case, that would be a car and her last semester of college.<\/p>\n \u201cAs you track your spending, you\u2019ll see red flags and how quickly you get to the point where you\u2019re spending more than you earn,\u201d according<\/a> to the Credit Counselling Society, which recommends using cash instead of cards.<\/p>\n \u201cCash-only diets are a great wake-up call to your spending because you physically see the money exchange and feel the drain on your wallet.\u201d<\/p>\n If you have multiple credit cards, consider consolidating<\/a> your debt onto one card (the one with the lowest interest rate or best terms) and cancel any cards you don\u2019t need. You\u2019ll also want to build up an emergency fund so you won\u2019t have to rely on your credit card if you suddenly need money for an emergency.<\/p>\n While Jessica is \u201cblessed\u201d without a credit card, those looking to get out of debt can use techniques such as the snowball or avalanche<\/a> method to whittle away high-interest debt.<\/p>\n Most likely, it will also involve increasing your income (working overtime, looking for a higher-paying job or taking on a side gig) while reducing your expenditures (cutting back on anything unnecessary, such as takeout, travel and entertainment).<\/p>\n To realize even greater savings, you could also look at ways to simplify or downsize. For example, is your rent eating up most of your income each month? If that\u2019s the case, it may be time to look at finding a smaller place, getting a roommate or moving to a less expensive neighborhood (though you\u2019ll also have to factor in the cost of moving).<\/p>\n \u201cDon\u2019t be leaning on the credit industry to get you out,\u201d Cruze advised Jessica. In other words, getting a credit card isn\u2019t going to solve her issues; it will only serve to get her into debt.<\/p>\n And, advised Coleman, \u201cdon\u2019t get married at the advice of a financial advisor so you can get a car.\u201d<\/p>\n