@ Taylor - Interesting take, but you're still carrying debt until you make
that payment - presumably on time. And yes, you do have to carry debt to have a
credit score, high or other wise. A FICO score is nothing more than a measure of
your interaction with debt. You have to have it to get one. No matter what you
credit score, if you stop interacting with debt, your score will gradually
decrease. This is just one of the big reasons why the FICO score is such a huge
superficial and inaccurate measure of financial situation. Someone could have no
debt, tons of cash and have a FICO score of 400 simply because they haven't
used debt in years and their score is fading out.
You need not carry debt to earn a high credit score. I've never carried
debt. I've been using a credit card for over 30 years, but never paid a
dime in interest. I charge on the credit card what I can pay at the end of the
month, and pay it in full each month. I rented homes until I was 39, then paid
cash for a nice townhome we could afford. I've never felt I was so rich I
could afford to pay interest, but I've earned some interest over the years.
I've never been well paid by any stretch of imagination, and my wife has
had only piece-meal, sporadic, limited part-time work. What all the experts say
about needing debt, and about throwing money away on rent (how is that different
than throwing money away on loan interest, loan fees, closing costs, mortgage
insurance, etc?), is bogus and only intended to make themselves a dishonest
fortune. By the way, my FICO score is 820, and has been consistent for as long
as I can remember. Landlords practically begged us to rent from them, even
discounting rent from time to time.
@ sisucas - credit without debt? that doesn't even make sense. your entire
FICO score is measured and calculated based on your interaction with debt. @ funny/witty screen name - you're absolutely wrong in stating that
a good credit score is "necessary" in life. But the fact that you work
for a bank explains that view...
The advavtages of credit cards over debit cards that Dave Ramsey recommends is
that if there is a dispute you have your money in the mean time and in case of
fraud no one has direct access to your checking account. I had a dispute with a
auto repair shop who left my car running poorly. I went through the credit card
dispute process having the car evaluated by an independent shop. I won and was
very grateful I used my card to pay instead of cash.Dave
Ramsey's recommendations make a lot of sense for people who have no
financial self control, otherwise a person can do better. I do.
I think that interest rate determined on the credit score, how your insurance
rate is determined even housing and some jobs. Trust is earned, If ya barrow
money barrow and not return what does that make you, to me A thief.
I recommend to my kids that they avoid debt except where necessary, such as a
house, AND that they have and make use of a credit card so they can build
credit. Yes that's dumb but that's how the game is played.
Im with sisucas on this one. I work at a bank and have seen that a good credit
score is necessary in life. Even if you have a couple lines of credit or credit
cards open, you dont ever have to use them to keep your credit score high. Just
Just curious about Dave's suggestion of showing proof. What would you show
as proof? Grocery store receipts? Tuition bills? Cancelled checks? Paystubs?
Dave's awesome, but I'm not sure I agree with him on this one.
We've all been conditioned that we need to have a good credit score, and
Dave's points against them are valid. But I would guess that a lot of other
landlords won't see it that way, just because they've been taught to
make decisions based on credit scores. I think maintaining credit without being
in debt is easy. Though it would be nice to ignore it, it's also pretty
easy to manage it.