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Paying cash (or check) for bills, rent, etc. are fine as long as you're paying on time. You may build up a credit score quicker by having credit cards, but (I think) it is only worth using them if you can pay off the full balance every month. Establishing credit is probably not worth the interest fees.
Don't get all caught up in the credit score garbage. Pay cash for what you can afford, stay out of debt and save and invest like crazy. Learning to live on much less than you make will benefit your financial health and physical health. Less debt = Less Risk = Less stress.
If you mean carrying a wad of greenbacks then that will never show up on your credit history and it will hurt you whe you need to borrow money, and basically ever transaction that in voles a rental / transaction for future use. Try to book a vacation without credit...
If you have credit but pay it off that behavior will rsult in more credit being extended to you. Most charge copies allow some interest free grace period. That will show up as a responsible and build your ceeit history...
Zero credit is not bad, actually its good. It shows the bank you dont need them, and the old saying was that banks only want to lend you money when you dont need it. If you have zero credit it is a testimoney to your cash. You can even buy a house with zero credit, all you need is 20% down, 2 years at the same employment, and proof of you paying rent on time. Most of those are required for conventional loans anyways.
It shows the bank you dont need them, and the old saying was that banks only want to lend you money when you dont need it.
It also doesn't tell the banks anything about how you handle credit. Someone without a credit history is a big unknown.
Quote:
Originally Posted by maschuette
If you have zero credit it is a testimoney to your cash. You can even buy a house with zero credit, all you need is 20% down, 2 years at the same employment, and proof of you paying rent on time. Most of those are required for conventional loans anyways.
Most lenders don't loan to people with no credit history. Someone may be able to get a FHA loan without a credit history though.
Actually if they are a bank that does underwriting, and you meet the requirements then the bank should not have a problem. If you put 20% down on a house, and have regular employment, and pay your bills on time, then the banks not going to care. On the other hand, if your a high school kid with no money and dont have any credit then that would be a risk. But no credit can be a mystery for lenders, which is why they have to do their own underwriting. If they find that your SO competent that you can usually do without credit then they will be attracted to you as an investment.
Actually if they are a bank that does underwriting, and you meet the requirements then the bank should not have a problem.
Yep, but most banks have minimum credit score requirements. Banks just don't look at your income and down-payment, your credit score also plays an important role.
Getting a mortgage with no credit history will be difficult.
Furthermore, the idea that a lack of credit utilization means you are component is not accurate. A lack of credit utilization can be a seen of financial ignorance just as much as as the over-utilization of credit. There are plenty of people that don't even have bank accounts let alone credit cards, etc. Lack of credit history tells the banks nothing about you and that is the problem.
Hhhmmmm......I aggree. I'm not changing my personal goal though, i want to have zero credit someday. I wonder if thats possible? I have good credit but cut up my cards to live without debt. So i assume it will drop over time, although i dont know if it will as long as i dont do anything negative. Any thoughts user_id?
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What is cash...
