Monday, June 25, 2012

Is Credit Needed?

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.