Credit Score Question
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Credit Score Question
My wife and I are buying our first home for cash. We have no debt, and don't think we will ever have a need for debt. In those circumstances... Is there any value/point to improving credit score?
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Re: Credit Score Question
I'll bite...
Your post provides too little information to provide sound advice as to "if you will ever need credit". However, I would try to keep your credit score above 700 in an attempt to hedge yourself against the possibility that your circumstances might change in the future and you may need to utilize some form of credit.
Your post provides too little information to provide sound advice as to "if you will ever need credit". However, I would try to keep your credit score above 700 in an attempt to hedge yourself against the possibility that your circumstances might change in the future and you may need to utilize some form of credit.
Re: Credit Score Question
You may never need credit, but if you do, it will be too late to start improving your score at that point. Improving it now is easy and doesn't have to cost anything other than a little bit of your time. Consider it very cheap insurance, since you never know what the future may bring. There are many instances of people whose fortunes have taken dramatic turns(In both directions) and found themselves living very different lifestyles as a result.
Re: Credit Score Question
I think there is value in maintaining a good credit score. This score not only affects credit, but such things as how much your car insurance and your house insurance cost.
Even if you never plan to use debt, I'd buy something on credit (some furniture or something) and pay it off in 3 months or 6 months or whatever, just to establish payment history.
And I'd have a credit card - there are certain things (car rental for instance) that you simply cannot do without a credit card. Again, buy some stuff that you are going to buy anyway and pay it off at the end of the month. Do this a few times a year. Or use it all the time for buying gas at the pump - more convenient than going inside.
Even if you never plan to use debt, I'd buy something on credit (some furniture or something) and pay it off in 3 months or 6 months or whatever, just to establish payment history.
And I'd have a credit card - there are certain things (car rental for instance) that you simply cannot do without a credit card. Again, buy some stuff that you are going to buy anyway and pay it off at the end of the month. Do this a few times a year. Or use it all the time for buying gas at the pump - more convenient than going inside.
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- bogleblitz
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Re: Credit Score Question
buying home and auto insurance requires good credit score for the best rate.
Re: Credit Score Question
It is worth getting your credit to ~720-760. That is where you'll get the best rates and if on the high end you won't dip below that if you need to have your credit pulled. As noted above, credit worthiness is used in calculating scores for insurance, but is also used for renter approval (who says you'll live in this house forever).
Building credit is completely painless and incredibly easy to do. Just buy something like Gasoline all the time on a CC and pay that every month. This is no different then having a utility bill. You owe some money once per month, you pay said money once per month. The best way to go, is to probably open two CC's, have your SO as an authorized user (they get the credit history too), and then each one uses a different one to pay for gas so they don't get canceled. That gives you two lines of credit with no pain.
You can probably get your bank to give you a CC also, and you'll never have to use that. I had an HSBC CC (now First Niagara), and that just sits on my credit report saying I pay on time, but I've never used it. Its over 7 years old now. I actually don't even know if First Niagara sent me a new CC but I still have a line of credit with them...
Building credit is completely painless and incredibly easy to do. Just buy something like Gasoline all the time on a CC and pay that every month. This is no different then having a utility bill. You owe some money once per month, you pay said money once per month. The best way to go, is to probably open two CC's, have your SO as an authorized user (they get the credit history too), and then each one uses a different one to pay for gas so they don't get canceled. That gives you two lines of credit with no pain.
You can probably get your bank to give you a CC also, and you'll never have to use that. I had an HSBC CC (now First Niagara), and that just sits on my credit report saying I pay on time, but I've never used it. Its over 7 years old now. I actually don't even know if First Niagara sent me a new CC but I still have a line of credit with them...
Re: Credit Score Question
You don't need to borrow at interest, or take out an installment loan such as a furniture purchase; just use a credit card and pay it off every month. You can have an excellent credit score (for both credit and insurance purposes) with just a few credit cards that you have had for several years and have never paid late.retiredjg wrote:I think there is value in maintaining a good credit score. This score not only affects credit, but such things as how much your car insurance and your house insurance cost.
Even if you never plan to use debt, I'd buy something on credit (some furniture or something) and pay it off in 3 months or 6 months or whatever, just to establish payment history.