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is this the modern day problem with America? use of credit is rewarded?

I have had several other loans that were paid quickly, and I have since gotten a credit card and my credit score did go up quite high…

but the simple fact that I needed to get credit to raise my score? shouldn’t the fact that I didn’t need a credit card be evidence enough?

4 Thoughts on Personal budget vs. national ideas, I was told to get a credit card and use it to raise my score, is that good?
  1. Reply
    gyt
    August 27, 2011 at 12:20 am

    Your credit score shows your love of debt. It also shows your level of responsibility with that debt.

    My credit score is very low. Not because I don’t pay off my debts but because I don’t borrow any money. I pay for cars with cash because I save up until I can buy one with cash. I do not use a credit card for anything.

    The only problem is that if I switch insurance companies I have to go with one that has an underwriter in the office because many insurance companies use your credit score as a factor in your rate.

  2. Reply
    Kamal Schuster
    August 27, 2011 at 12:54 am

    A credit card, used wisely, will certainly increase your score. But yes, needing credit is a problem in today’s society. Nobody encourages being ‘debt free’ anymore or saving to get what you want. We’re encouraged to take loans out for everything. Dealerships offer SIX year loans on cars! That’s absurd to be making a car payment for that long.

    You don’t need credit at all if you save up and pay cash for everything you want to buy. I only have a mortgage, everything else I pay cash for. Not worth it if I ‘forget’ to pay my bill on time and get hit with an extra $ 40 fee.

  3. Reply
    Suzee
    August 27, 2011 at 1:35 am

    At one point, we had a very high credit rating. I am not sure what it is now. We have two credit cards which we pay off each month. No mortgage or car loans. Since we are retired and have savings/investments etc I don’t see why we need to have a high credit rating. We pay as we go.

  4. Reply
    MikeGolf
    August 27, 2011 at 2:20 am

    Demonstrating that you can handle credit in a responsible manner is how you get a good credit score. In your case the reason your credit score increased is because part of your credit score is based on the inverse of how much availible credit you have that you are actually using. If you have a credit card with a limit of $ 10,000 and you maintain a monthly balance of less than $ 2,000 then your credit score will go up because you are only utilizing 20% of the credit availible to you. (A sign that you are watching your borrowing and keeping to at a level you can afford.)

    In fact, if you have good fiscal disclipline you can even make money off of your credit cards. I have a couple of ‘rewards’ type credit cards and I use them for all of my monthy spending (gas, groceries, etc.) then pay them off in full at the beginning of each month. As a result – one card paid me a ‘rewards’ refund of over $ 400 and the other provides me with enough resturant gift cards that me and my wife can go out to a nice resturant once a month for free. (And I paid $ 0.00 in interest last year.)

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