Do you need a credit card?

[pontifex]

Originally posted by: yllus
You should absolutely start building your credit score up. Sooner or later you're going to want to own things you can't pay for immediately by cash, and it'll become a factor. You're only 18 so you're not screwing yourself yet, but I'd get on board in a hurry.

Having a credit card doesn't mean you have to go into debt. Just treat it as a debit card with a bit of float time before you have to pay it off. I don't really understand this notion in the least.

wtf? take a step back and look at a few things...

he's on ATOT which means he's already independently wealthy and since he's 18, he still has a few years to make his first million. wtf could he possibly need credit for? his credit limit would be pocket change.

 

[hanoverphist]

Originally posted by: amdskip
I hate the idea of a debit card. I have one but only use it for cashback a couple times a year if that or for emergency purposes. People need to learn to have enough self control for their spending.

that makes no sense. if you cant control your spending and run out of money, your debit card wont work anyway. did you mean credit card perhaps?

as for the OP, ya get a card, use it a couple times a month or something and pay it off before the finance charges hit. it will show you have history, while not really making more hassle for you beyond having to pay an extra bill each month. trying to buy a house or a car, or a big ass tv with no credit is a lot harder than if you have 1 or 2 cards laying around. just remember that keeping it under 50% of the limit is a good thing. i held out on getting a credit card for a long time, im 38 now and just barely got my first one 3 years ago. buying my truck 2 years ago went a bit better than it did 8 years ago with no cards. now i have 2, one is sitting at 0 balance and one has some video games on it. i use them once every couple months, at least one fill up or so just to show activity.

 

[IHateMyJob2004]

Originally posted by: TruePaige

Originally posted by: IHateMyJob2004

Originally posted by: SsupernovaE
Your friend is absolutely correct.

WRONG

I never had a credit card in my entire life and when I went to get a loan for my first home I was told that I am what mortgage companies dream of. Just pay your damned bills on time and make sure that you don't get pinged on your credit rating for having late charges and such.

ALSO! My credit rating was "excelent" (and still is) before I ever had a credit card so when people say that, you might as well be told that they don't know what they are talking about.

The only reason I ever got a credit card is so I can do things liek reserve hotels. I have a whopping total of 1 credit card in my wallet (granted my ATM card also doubles as a credit card).

Sorry, but this is one topic that most people are truly uneducated about and all they know how to do is repeat what others have said before them!

I think you're the one who is wrong, or you're leaving out information.

You must of had some kind of major credit purchases, car, something. Otherwise I'd be very interested in what kind of rate you received.

I use my credit cards for all my purchases, take my free reward points, pay them off at the end of the month, and have a great credit score.

You don't just walk out of nowhere with no credit and get handed lumps of money, you need to earn trust through the system, and believe me, I am educated on the subject, I monitor my FICO score closely, and take advantage of special interest rates / promos / freebies because of my score.

You need to realize that when you are 25 (as aI was) and never once got pinged for things like not paying the electrical bill, the phone bill, my car insurance ... etc etc etc .... you WILL get an excellent credit rating. There is not much else to say. And when I said I was told that I am what mortgage lenders dream of, this was the mortgage lender saying this to my face. He did in fact review my credit report.

Listen. I'll make this simple. Banks lend money. That is what they do. They need your business. They need you more then you need them so when you walk in with an excellent credit rating, they want your business. Whether or not you have a credit card is insignificant. It is quite simple actually if you think about it.

 

[hanoverphist]

Originally posted by: TruePaige

Originally posted by: Beattie

Originally posted by: spidey07
Your credit score is dependent on the length of your credit accounts.

True. And the amount you borrowed, and how you repaid it.

Originally posted by: spidey07
It's better to start early at age 18 than wait and spend years trying to build a good credit score. Without history your score will tend to be very low leading to higher interest on loans and higher insurance, all around your life is much more expensive than somebody with good credit.

False. You qualify for the same rates with no credit history that you do if you have a very high credit score.

Don't spread misinformation.

You qualify for the same rates with no credit history as the person who has a very high credit score?

THAT MAKES NO SENSE AND IS NOT TRUE.

What would be the purpose of a credit score if they gave everyone the same rates anyway?

"Oh I don't know you, here is a 15% rate, and this guy who has repaid every debt he ever has and has a 750 credit score, here's a 15% rate too" would make no sense.

i can say from personal experience that you dont get a decent rate with crappy credit and no credit. ive had both in my lifetime, and i can tell you with the score up around 700 you get better rates. my ex wife even is pissed, after she left we both bought vehicles. i bought because my car blew a head gasket and wouldnt run, she bought because she cant be out done. i got a lower rate than she did, same bank and all. my dti is better, and my score was a bit higher. the bank occifer told me they dont even give loans for people under 590 anymore. you have to be over 675 just to get the standard rates too. this is just at my CU, and was 2 years ago. i doubt they have changed that policy too much however.

 

[IHateMyJob2004]

Originally posted by: krunchykrome

Originally posted by: TruePaige

Originally posted by: IHateMyJob2004

Originally posted by: SsupernovaE
Your friend is absolutely correct.

WRONG

I never had a credit card in my entire life and when I went to get a loan for my first home I was told that I am what mortgage companies dream of. Just pay your damned bills on time and make sure that you don't get pinged on your credit rating for having late charges and such.

ALSO! My credit rating was "excelent" (and still is) before I ever had a credit card so when people say that, you might as well be told that they don't know what they are talking about.

The only reason I ever got a credit card is so I can do things liek reserve hotels. I have a whopping total of 1 credit card in my wallet (granted my ATM card also doubles as a credit card).

Sorry, but this is one topic that most people are truly uneducated about and all they know how to do is repeat what others have said before them!

I think you're the one who is wrong, or you're leaving out information.

You must of had some kind of major credit purchases, car, something. Otherwise I'd be very interested in what kind of rate you received.

I use my credit cards for all my purchases, take my free reward points, pay them off at the end of the month, and have a great credit score.

You don't just walk out of nowhere with no credit and get handed lumps of money, you need to earn trust through the system, and believe me, I am educated on the subject, I monitor my FICO score closely, and take advantage of special interest rates / promos / freebies because of my score.

I have to agree with TruePaige. Why would a lender offer money at a reasonable interest rate to someone with poor or no credit history?

That would be an excellent credit rating. I just happened to have no credit cards. See the post above this for more on this (paying off phone bills, etc).

Would a bank rather lend money to someone with no credit history and no way of knowing whether or not this person is capable of meeting financial obligations, or would the bank rather lend money to someone with an excellent credit rating who has consistently paid back lenders without default

They care most about that credit rating. Remember, they want your business.

Ihatemyjob2004 is omitting information. Explain why you are a "bank's dream come true".

See previous post.

 

[IHateMyJob2004]

Originally posted by: hanoverphist

Originally posted by: TruePaige

Originally posted by: Beattie

Originally posted by: spidey07
Your credit score is dependent on the length of your credit accounts.

True. And the amount you borrowed, and how you repaid it.

Originally posted by: spidey07
It's better to start early at age 18 than wait and spend years trying to build a good credit score. Without history your score will tend to be very low leading to higher interest on loans and higher insurance, all around your life is much more expensive than somebody with good credit.

False. You qualify for the same rates with no credit history that you do if you have a very high credit score.

Don't spread misinformation.

You qualify for the same rates with no credit history as the person who has a very high credit score?

THAT MAKES NO SENSE AND IS NOT TRUE.

What would be the purpose of a credit score if they gave everyone the same rates anyway?

"Oh I don't know you, here is a 15% rate, and this guy who has repaid every debt he ever has and has a 750 credit score, here's a 15% rate too" would make no sense.

i can say from personal experience that you dont get a decent rate with crappy credit and no credit. ive had both in my lifetime, and i can tell you with the score up around 700 you get better rates. my ex wife even is pissed, after she left we both bought vehicles. i bought because my car blew a head gasket and wouldnt run, she bought because she cant be out done. i got a lower rate than she did, same bank and all. my dti is better, and my score was a bit higher. the bank occifer told me they dont even give loans for people under 590 anymore. you have to be over 675 just to get the standard rates too. this is just at my CU, and was 2 years ago. i doubt they have changed that policy too much however.

And to get crappy credit, you probably paid bills late on more than one occasion.

 

[Beattie]

Originally posted by: hanoverphist
trying to buy a house or a car, or a big ass tv with no credit is a lot harder than if you have 1 or 2 cards laying around.

Why are you buying a car or a "big ass tv" that you can't afford in the first place?

 

[Alyx]

Originally posted by: IHateMyJob2004

Originally posted by: TruePaige

Originally posted by: IHateMyJob2004

Originally posted by: SsupernovaE
Your friend is absolutely correct.

WRONG

I never had a credit card in my entire life and when I went to get a loan for my first home I was told that I am what mortgage companies dream of. Just pay your damned bills on time and make sure that you don't get pinged on your credit rating for having late charges and such.

ALSO! My credit rating was "excelent" (and still is) before I ever had a credit card so when people say that, you might as well be told that they don't know what they are talking about.

The only reason I ever got a credit card is so I can do things liek reserve hotels. I have a whopping total of 1 credit card in my wallet (granted my ATM card also doubles as a credit card).

Sorry, but this is one topic that most people are truly uneducated about and all they know how to do is repeat what others have said before them!

I think you're the one who is wrong, or you're leaving out information.

You must of had some kind of major credit purchases, car, something. Otherwise I'd be very interested in what kind of rate you received.

I use my credit cards for all my purchases, take my free reward points, pay them off at the end of the month, and have a great credit score.

You don't just walk out of nowhere with no credit and get handed lumps of money, you need to earn trust through the system, and believe me, I am educated on the subject, I monitor my FICO score closely, and take advantage of special interest rates / promos / freebies because of my score.

You need to realize that when you are 25 (as aI was) and never once got pinged for things like not paying the electrical bill, the phone bill, my car insurance ... etc etc etc .... you WILL get an excellent credit rating. There is not much else to say. And when I said I was told that I am what mortgage lenders dream of, this was the mortgage lender saying this to my face. He did in fact review my credit report.

Listen. I'll make this simple. Banks lend money. That is what they do. They need your business. They need you more then you need them so when you walk in with an excellent credit rating, they want your business. Whether or not you have a credit card is insignificant. It is quite simple actually if you think about it.

I don't think you are looking at the big picture. With what you are explaining will get a good credit score: true. I'm 21 and have a 740 credit score, I know its true.

But if I go and try to buy a house I will get turned down, its not my score they are looking at but the size of those accounts and my income/expense ration. If they see a $800 revolving credit on my card and I try to convince them I can make a 3k/month house payment they will laugh at me. Paying a $40 a month cable bill does not compare to paying off a 30k car or 400k house. The score is only half of what they look at.

My sister went and bought a car a month ago. She got a much lower rate with my parents as co-signers on her car. Her score was a high score but the extra background of my parents still got a better rate.

 

[Muadib]

This thread made me laugh. I wasn't expecting that.

It also made me sad though, because the amount of misinformation here is truly scary.

 

[Beattie]

Originally posted by: Alyx
But if I go and try to buy a house I will get turned down, its not my score they are looking at but the size of those accounts and my income/expense ration. If they see a $800 revolving credit on my card and I try to convince them I can make a 3k/month house payment they will laugh at me. Paying a $40 a month cable bill does not compare to paying off a 30k car or 400k house. The score is only half of what they look at.

False. Read this. It sums up some of my points very well.

http://www.antishay.com/?p=120

Manual underwriting is how mortgages were done before there were computers, and they are still done today, although they?re less popular because using a FICO score is easier for the mortgage company. If the mortgage company you go to won?t do manual underwriting for you because they don?t have a brain and want to take the easy way through a mortgage approval, I would just walk away and take my business with me.

It will not be harder to get a good interest rate by going through manual underwriting. In fact, a mortgage based upon more than a FICO score will many times give you a better interest rate because more aspects of YOU are figured into the equation.

 

[Rebasxer]

I'm 20 and I have a credit card in my name. I gave it to my dad to use in place of his debit card. Basically he charges shit that he would buy using cash or checks or debit and pays the bill off at the end of the month. If parents are willing to do this its a pretty good idea.

 

[QueBert]

Originally posted by: Beattie

Originally posted by: Alyx
But if I go and try to buy a house I will get turned down, its not my score they are looking at but the size of those accounts and my income/expense ration. If they see a $800 revolving credit on my card and I try to convince them I can make a 3k/month house payment they will laugh at me. Paying a $40 a month cable bill does not compare to paying off a 30k car or 400k house. The score is only half of what they look at.

False. Read this. It sums up some of my points very well.

http://www.antishay.com/?p=120

Manual underwriting is how mortgages were done before there were computers, and they are still done today, although they?re less popular because using a FICO score is easier for the mortgage company. If the mortgage company you go to won?t do manual underwriting for you because they don?t have a brain and want to take the easy way through a mortgage approval, I would just walk away and take my business with me.

It will not be harder to get a good interest rate by going through manual underwriting. In fact, a mortgage based upon more than a FICO score will many times give you a better interest rate because more aspects of YOU are figured into the equation.

the bold part, so you're saying if I have no credit and try to get a mortgage on a 300k house, even with no credit I should be fine as long as the lender thinks I'm a nice person, intelligent person? What other aspects of YOU are there when YOU are trying to borrow money, they want to see credit history. The only other aspect is a good job, if they see steady income they'll lend to you, but without the history you're not going to get the best rate. There are no other aspects, unless the lender is dumb and take things into the equation like where you were born "hay my aunt's from there!" or where you went to school. "that's where I went, you must be ok to lend money to"

I suppose that could happen.

 

[thirtythree]

Originally posted by: Beattie
This link explains exactly what I said in the post you quoted...

2. QUICK FACTS: WHY ATM DEBIT CARD PROBLEMS ARE WORSE THAN CREDIT CARD PROBLEMS AND PIRG'S RECOMMENDATIONS

(1) YOUR LIABILITY IS GREATER THAN WITH A CREDIT CARD: The law limits consumer liability for credit card fraud to $50. For debit card fraud, your liability is $50 if you notify the bank with 2 days of learning of the fraud, and $500 or more after two days, up to the entire amount stolen under certain circumstances.

Your quote says debit card problems are worse than credit card problems. That's not what you've been saying is it? Your liability with a credit card won't exceed $50 by law. Your liability with a debit card will range from $50 to the entire amount stolen. Who checks their bank account every 2 days? I don't know the exact stats, but I thought credit card fraud could be reported within something like 30 or 90 days.

 

[QueBert]

Originally posted by: Beattie

Originally posted by: hanoverphist
trying to buy a house or a car, or a big ass tv with no credit is a lot harder than if you have 1 or 2 cards laying around.

Why are you buying a car or a "big ass tv" that you can't afford in the first place?

most people buy cars on credit or a loan and pay for 4-5 years on them, he was saying without a credit history most car dealerships probably won't even discuss selling him a car unless he comes in a suitcase full of cash. They take nothing else into consideration, My GF was out of work on disability making zero dollars, but she was still getting $50,000 checks in the mail that she could cash and do what she wanted with. because her credit score and damn near perfect.

I don't know anyone who has bought a new car straight out, because they can't afford to. That's normal though....

 

[Beattie]

Originally posted by: thirtythree

Originally posted by: Beattie
This link explains exactly what I said in the post you quoted...

2. QUICK FACTS: WHY ATM DEBIT CARD PROBLEMS ARE WORSE THAN CREDIT CARD PROBLEMS AND PIRG'S RECOMMENDATIONS

(1) YOUR LIABILITY IS GREATER THAN WITH A CREDIT CARD: The law limits consumer liability for credit card fraud to $50. For debit card fraud, your liability is $50 if you notify the bank with 2 days of learning of the fraud, and $500 or more after two days, up to the entire amount stolen under certain circumstances.

Your quote says debit card problems are worse than credit card problems. That's not what you've been saying is it? Your liability with a credit card won't exceed $50 by law. Your liability with a debit card will range from $50 to the entire amount stolen. Who checks their bank account every 2 days? I don't know the exact stats, but I thought credit card fraud could be reported within something like 30 or 90 days.

Ugh, reading comprehension is really lax here.

Read the end of the bolded statement. "of learning of the fraud"

So, once you learn of it, how many people do you think sit around for 2+ days and say, "hmm, maybe I should report this. Nah, I'll just wait to see if it goes away." and how many panic and call the bank? And if you do the former, you deserve what you get.

Other than that, your liability is EXACTLY THE SAME on a debit card as a credit card.

 

[Beattie]

Originally posted by: QueBert

Originally posted by: Beattie

Originally posted by: hanoverphist
trying to buy a house or a car, or a big ass tv with no credit is a lot harder than if you have 1 or 2 cards laying around.

Why are you buying a car or a "big ass tv" that you can't afford in the first place?

most people buy cars on credit or a loan and pay for 4-5 years on them, he was saying without a credit history most car dealerships probably won't even discuss selling him a car unless he comes in a suitcase full of cash. They take nothing else into consideration, My GF was out of work on disability making zero dollars, but she was still getting $50,000 checks in the mail that she could cash and do what she wanted with. because her credit score and damn near perfect.

I don't know anyone who has bought a new car straight out, because they can't afford to. That's normal though....

Yea, no one arranges a loan from another place and then goes and pays for a car. Everyone does dealer financing.

Wrong.

And you shouldn't buy a car you can't afford anyway. Pay cash for a used car. I bought one car new and financed it and I don't think I will ever do it again.

edit = also, I want to know what this girlfriend was doing that she had no job and no income, yet had was getting $50k checks (which is income and contradicts your previous statement) and how that has to do with good credit. I can only assume your point is that if you have good credit, people send you large checks for not working. If that's the case then I retract all of my posts.

 

[QueBert]

Originally posted by: Beattie

Originally posted by: QueBert

Originally posted by: Beattie

Originally posted by: hanoverphist
trying to buy a house or a car, or a big ass tv with no credit is a lot harder than if you have 1 or 2 cards laying around.

Why are you buying a car or a "big ass tv" that you can't afford in the first place?

most people buy cars on credit or a loan and pay for 4-5 years on them, he was saying without a credit history most car dealerships probably won't even discuss selling him a car unless he comes in a suitcase full of cash. They take nothing else into consideration, My GF was out of work on disability making zero dollars, but she was still getting $50,000 checks in the mail that she could cash and do what she wanted with. because her credit score and damn near perfect.

I don't know anyone who has bought a new car straight out, because they can't afford to. That's normal though....

Yea, no one arranges a loan from another place and then goes and pays for a car. Everyone does dealer financing.

Wrong.

And you shouldn't buy a car you can't afford anyway. Pay cash for a used car. I bought one car new and financed it and I don't think I will ever do it again.

edit = also, I want to know what this girlfriend was doing that she had no job and no income, yet had was getting $50k checks (which is income and contradicts your previous statement) and how that has to do with good credit. I can only assume your point is that if you have good credit, people send you large checks for not working. If that's the case then I retract all of my posts.

huh ok so if I get a car loan from a credit union I belong to but I have no credit history, guess what I'm not getting a loan! No credit history is a danger they're not going to lend you money in good faith.

your comment about don't buy a car unless you can afford it, meaning pay cash for it outright is pretty retarded. Using that logic most people would be driving used cars even the people I know who make $70k a year couldn't outright afford to buy a $30,000 car without financing.

I was saying she was on disability from work, you know unable to work? her state disability ran out so they wouldn't pay her anymore but she still couldn't return to work. She gets checks in the mail all the time because her credit score is almost perfect, if she had no credit she would have gotten no checks. That's pretty much how it works. The point I was trying to make is due to credit regardless of the fact she was out of work they were offering her money. Where I work full time and get no such checks. They weren't giving her money because she wasn't working but because she's not a credit risk in their eyes, with an 815 score they're not even going to check employment history more than likely.

 

[spidey07]

Originally posted by: Beattie
Yea, no one arranges a loan from another place and then goes and pays for a car. Everyone does dealer financing.

Wrong.

And you shouldn't buy a car you can't afford anyway. Pay cash for a used car. I bought one car new and financed it and I don't think I will ever do it again.

edit = also, I want to know what this girlfriend was doing that she had no job and no income, yet had was getting $50k checks (which is income and contradicts your previous statement) and how that has to do with good credit. I can only assume your point is that if you have good credit, people send you large checks for not working. If that's the case then I retract all of my posts.

OK - I get it. You don't understand how to build wealth. That's fine. As I mentioned in my first post your life is much more expensive than others. From employment, to insurance, to everything else...congratulations. You're off the grid, and you are going to pay for it.

 

[Beattie]

Originally posted by: QueBert
huh ok so if I get a car loan from a credit union I belong to but I have no credit history, guess what I'm not getting a loan! No credit history is a danger they're not going to lend you money in good faith.

your comment about don't buy a car unless you can afford it, meaning pay cash for it outright is pretty retarded. Using that logic most people would be driving used cars even the people I know who make $70k a year couldn't outright afford to buy a $30,000 car without financing.

I was saying she was on disability from work, you know unable to work? her state disability ran out so they wouldn't pay her anymore but she still couldn't return to work. She gets checks in the mail all the time because her credit score is almost perfect, if she had no credit she would have gotten no checks. That's pretty much how it works. The point I was trying to make is due to credit regardless of the fact she was out of work they were offering her money. Where I work full time and get no such checks. They weren't giving her money because she wasn't working but because she's not a credit risk in their eyes, with an 815 score they're not even going to check employment history more than likely.

I would like to submit this as the most retarted post ever.

There's so much dumb crap in here I am not sure where to begin. I guess I will start at the beginning.

If you read the thread you would know that you can get a loan without a credit history. That negates your first paragraph. The second paragraph basically states that it's impossible to save money to buy a car which is, of course, also stupid. The final paragraph restates that your girlfriend received some large checks simply for having good credit. Let me quote.

She gets checks in the mail all the time because her credit score is almost perfect, if she had no credit she would have gotten no checks.

Of course this is not the whole story and you are trying to base your argument on an incomplete example. If you would like to continue using this, you should explain it completely.

Additionally, if someone has no income, it's especially bad to borrow money. You have no way to repay the loan, then it goes into default and you get sued.

 

[Beattie]

Originally posted by: spidey07

Originally posted by: Beattie
Yea, no one arranges a loan from another place and then goes and pays for a car. Everyone does dealer financing.

Wrong.

And you shouldn't buy a car you can't afford anyway. Pay cash for a used car. I bought one car new and financed it and I don't think I will ever do it again.

edit = also, I want to know what this girlfriend was doing that she had no job and no income, yet had was getting $50k checks (which is income and contradicts your previous statement) and how that has to do with good credit. I can only assume your point is that if you have good credit, people send you large checks for not working. If that's the case then I retract all of my posts.

OK - I get it. You don't understand how to build wealth. That's fine. As I mentioned in my first post your life is much more expensive than others. From employment, to insurance, to everything else...congratulations. You're off the grid, and you are going to pay for it.

What? Do you not understand how money works? Wealth is the opposite of debt. I have no debt and a lot of wealth. This thread has been a bunch of people encouraging a young person to have debt.

And your assertion that my life is somehow more expensive than other peoples' is unsupported and in fact has been disproven a few times in this very thread.

 

[TruePaige]

Originally posted by: Beattie

Originally posted by: spidey07

Originally posted by: Beattie
Yea, no one arranges a loan from another place and then goes and pays for a car. Everyone does dealer financing.

Wrong.

And you shouldn't buy a car you can't afford anyway. Pay cash for a used car. I bought one car new and financed it and I don't think I will ever do it again.

edit = also, I want to know what this girlfriend was doing that she had no job and no income, yet had was getting $50k checks (which is income and contradicts your previous statement) and how that has to do with good credit. I can only assume your point is that if you have good credit, people send you large checks for not working. If that's the case then I retract all of my posts.

OK - I get it. You don't understand how to build wealth. That's fine. As I mentioned in my first post your life is much more expensive than others. From employment, to insurance, to everything else...congratulations. You're off the grid, and you are going to pay for it.

What? Do you not understand how money works? Wealth is the opposite of debt. I have no debt and a lot of wealth. This thread has been a bunch of people encouraging a young person to have debt.

And your assertion that my life is somehow more expensive than other peoples' is unsupported and in fact has been disproven a few times in this very thread.

Having a credit card does not equal having debt.

I have credit cards that get paid off at the end of the month.

I get free stuff, it's a nice deal. I also get coupons and invitation-only sales. 0.o

 

[Xavier434]

Originally posted by: Beattie

Originally posted by: Xavier434

Originally posted by: CPA
Don't do it and don't listen to the folks who say "get a credit card NOW. You need it!"

BS, you don't need it.

On average, credit card users spend 12-18% more per purchase.

More than 60% of credit card holders do NOT pay off their card monthly - in other words they carry a balance.

You can get a home loan without credit, you just get a manually written mortgage.

Pay for a car with cash and buy it used, not new.

Get a debit card for auto rentals or anything else you may need a "card" for.

You are missing the point. No one here is arguing that you cannot get this or that without a credit card. All that we are saying is that those with lengthy good credit histories get the best that the banks have to offer which can often be a huge difference. Have you ever considered how much more one pays over the course of a 20 year mortgage on a $250,000 home at 7% as opposed to 6% for example? Also, very few young people can afford to pay for a used car in full using cash unless they get help from outside sources of income such as family. Starting off with a credit card is a great way to go if you are responsible. You are in complete control of that card.

Read up on manual underwriting.

Most people that are smart enough to pay cash and have money (instead of credit cards and debt) tend to rate better and get better rates than even good fico score borrowers. It's not because they have no credit through. It's because they have money.

In terms of mortgages, how much money is necessary to have on average in order to receive a rate using this method which is either equivalent or better than the person who is rated with an excellent credit history? I have a suspicion that the amount of income and equity one must have is a lot more than the average American brings in during the time that they are usually interested in purchasing their first home.

 

[oddyager]

Originally posted by: SleepWalkerX
I'm 18 and have never owned a credit card. I only own a debit card in my name. I can't stand the idea of debt so I make I have the money before I buy anything.

One of my friends suggested that I'm going to have a harder time in the future because if I want to get a loan, a car, or a mortgage or whatever then people will look up my credit score and it might show that I don't have anything listed.

This is why he sometimes buys small things on his credit card just to build his credit score up. Is this true? Am I screwing myself to some extent by not having a credit card?

Absolutely correct. Get yourself a credit card and make a small purchase every month and most importanly, pay your bills ON TIME. This is what builds solid credit.

 

[Beattie]

Originally posted by: TruePaige
Having a credit card does not equal having debt.

I have credit cards that get paid off at the end of the month.

I get free stuff, it's a nice deal. I also get coupons and invitation-only sales. 0.o

When you purchase something on a CC, that is debt until it is paid off at the end of the month or whatever.

 

[Beattie]

Originally posted by: Xavier434
In terms of mortgages, how much money is necessary to have on average in order to receive a rate using this method which is either equivalent or better than the person who is rated with an excellent credit history? I have a suspicion that the amount of income and equity one must have is a lot more than the average American brings in during the time that they are usually interested in purchasing their first home.

At least 10%. I'd recommend more of course. As much as possible.