For a long time, I worried about me and the hubsters credit scores as a few times in my life I thought I "needed" credit. My credit score has been used to purchase a car and even at one time a home or credit cards even. A poor score meant high interest rates as well as not being able to get certain jobs that required a good credit score.
Years ago when I got credit cards thinking my credit scores could not drop even further.........I WAS WRONG! After me and the hubster got our cards we did good for a short spell than unexpectedly he lost his job of 10 years at the same time our son, girlfriend and 2 grandchildren needed a place to stay. We lived by maxing out our cards and could not pay them in the end.
When I pulled my credit report in big bold red letters at the bottom it announced
Your Credit Score is Worse Than 95% of Americans average Score!
Ouch, that hurt! I swore right there and then that we would NEVER use credit again, while we did not our daughter did which indeed helped saved us while we lived in North Carolina for a year and did not find any work at all that entire year. She did make arrangements to pay it and is working on it but still it did hurt her score as well, even if not nearly as bad as me and the hubsters. She swore like us, NEVER AGAIN.
So since then, this has found us to be a CASH ONLY family and recently this has led me to start re-thinking if we even really need a credit score.
I hear others saying "You may need it one day........." but do we really? Why? Because we have been told our whole life how important a great credit score is? But what is credit for exactly?
Credit Scores are used to make an assessment of your ability to pay on BORROWED MONEY.
If we have made the commitment to a cash only lifestyle, then the truth is WE DON'T NEED CREDIT.
If we have no money to buy a car, we ride a bike, walk and do without.
If we have no money to buy a house without a mortgage, we go without and resolve to rent and rent as cheaply as possible.
If we have no money for food..........well okay I get creative here and make sure we always have at least SOMETHING for food even if it means foraging some!
If we need a couch , we wait until we can pay cash cheaply at a a garage sale or thrift store.
If we are serious about ALWAYS living a CASH ONLY policy it is simple. We either have it or we don't and if we don't we wait and do without.......NO CREDIT NEEDED.
Credit implies making purchases on money you do not have and aids in living above your means rather than below. It is borrowed, it is not money you saved hard for and that you will have to re-pay over a set period of time with accumulating interest. At my age a 30 year mortgage would put me in my 70's...........something I am NOT willing to do. I would rather buy a plot of land cheaply and slap a cheap trailer on it and have it all paid for free and clear in cash...........or Rent if even that paltry scenario is not possible.
Cash only living means I am always accountable for living within our means and not getting into something way over my head. Things always change and change can be a huge problem when using credit and you have a major drop in income or health.
So I seriously have been thinking how truly important a credit score is to us and to be honest at this moment in our life I have come to the serious conclusion that......
It is NOT IMPORTANT AT ALL for I am totally committed to a CASH ONLY LIFESTYLE.
Years ago when I got credit cards thinking my credit scores could not drop even further.........I WAS WRONG! After me and the hubster got our cards we did good for a short spell than unexpectedly he lost his job of 10 years at the same time our son, girlfriend and 2 grandchildren needed a place to stay. We lived by maxing out our cards and could not pay them in the end.
When I pulled my credit report in big bold red letters at the bottom it announced
Your Credit Score is Worse Than 95% of Americans average Score!
Ouch, that hurt! I swore right there and then that we would NEVER use credit again, while we did not our daughter did which indeed helped saved us while we lived in North Carolina for a year and did not find any work at all that entire year. She did make arrangements to pay it and is working on it but still it did hurt her score as well, even if not nearly as bad as me and the hubsters. She swore like us, NEVER AGAIN.
So since then, this has found us to be a CASH ONLY family and recently this has led me to start re-thinking if we even really need a credit score.
I hear others saying "You may need it one day........." but do we really? Why? Because we have been told our whole life how important a great credit score is? But what is credit for exactly?
Credit Scores are used to make an assessment of your ability to pay on BORROWED MONEY.
If we have made the commitment to a cash only lifestyle, then the truth is WE DON'T NEED CREDIT.
If we have no money to buy a car, we ride a bike, walk and do without.
If we have no money to buy a house without a mortgage, we go without and resolve to rent and rent as cheaply as possible.
If we have no money for food..........well okay I get creative here and make sure we always have at least SOMETHING for food even if it means foraging some!
If we need a couch , we wait until we can pay cash cheaply at a a garage sale or thrift store.
If we are serious about ALWAYS living a CASH ONLY policy it is simple. We either have it or we don't and if we don't we wait and do without.......NO CREDIT NEEDED.
Credit implies making purchases on money you do not have and aids in living above your means rather than below. It is borrowed, it is not money you saved hard for and that you will have to re-pay over a set period of time with accumulating interest. At my age a 30 year mortgage would put me in my 70's...........something I am NOT willing to do. I would rather buy a plot of land cheaply and slap a cheap trailer on it and have it all paid for free and clear in cash...........or Rent if even that paltry scenario is not possible.
Cash only living means I am always accountable for living within our means and not getting into something way over my head. Things always change and change can be a huge problem when using credit and you have a major drop in income or health.
So I seriously have been thinking how truly important a credit score is to us and to be honest at this moment in our life I have come to the serious conclusion that......
It is NOT IMPORTANT AT ALL for I am totally committed to a CASH ONLY LIFESTYLE.
I too destroyed my credit score. My credit score was 450 in January right after filing bankruptcy. Ouch! I just applied for and got approved for a high interest low limit card that I got an offer for in the mail. I don't feel the same as you about not needing credit and really want to build mine back up. I think credit is a good thing to have for 2 things. A dependable used vehicle and a modest home.
ReplyDeleteThe card I'm getting in the mail only has a $300 limit but that is perfect for what I'm going to use it for. I'm going to use it as a gas card only. Gas is something I buy every month and I usually spend about $150-$200 a month. I can put it all on the card and pay it off every month because it is an expense already worked into my budget.
I use to think that way Free but found you can get a reliable vehicle without needing credit (our truck was only $2500 and a great dependable vehicle) and as for a modest home...I just am not interested in financing a home at my age......would much prefer a modest home (modest meaning different things to different people) that I can pay cash for or go without entirely as we do like to move around a lot :)
DeleteCredit is evil. Got myself into heaps f trouble after college, which was stupid given how hard I worked to avoid student loans! Never going back!
ReplyDeleteAgreed Shannon! LOL it is evil there to feed the banking systems that America is so precariously set up on and to delude the people into thinking they are making more than they are because they always have the plastic to swipe and fall back on to "pay later for wanting now"
DeleteYou just never know when an emergency may crop up and all of a sudden you may need credit, I agree that living without it would be the prefered way. But Murphy may just be hiding round the next corner...
ReplyDeleteMaureen, my view there is that if you hold on to credit for an "emergency" at some point there will be an "emergency" to ensure you use credit and go back in debt or will keep you in the cycle of debt.
DeleteCash only living, best case scenerio is you have a savings account to cover emerengies....
Worse case Murphy moves in, you have no savings or credit you and just figure something out.....personally I am use to this one such as last summer when our car broke down and we had to bike and walk the 5 miles into town everyday.
I think credit is highly over rated.....but then my husband and I couldn't get it if we wanted to! My score was trashed after a car wreck put me out of work for a while and I used my card to pay bills....and my husband has no score....*shrugs* and yet we live imagine that! :)
ReplyDeleteCritters, don't want to sound presumptious but are you my beautiful niece and my grand nephew getting ready to start your crafting blog of your beautiful work? hmmmmmm? (Just making sure cause the whole NJ 24 year old crafting mom of 9 month boy fits her description! so just checkin!
Delete