Tags

, , , , , , , , , , , ,

credit scoreI must admit that I am a faithful follower of Dave Ramsey and fully believe in his teachings of not being in debt.  My husband and I have lived all of our married life this way.  We purchased our home foreclosed and with a loan from a family member, which we paid back with interest.  We have never financed a vehicle and have never purchased a new vehicle.  We are just people who choose to pay in cash and we don’t buy stuff that we can’t pay for outright.

As Dave Ramsey teaches, our credit score is a big fat zero.  Yes, I said 0, as in non-existent.  This has never bothered us because we don’t borrow money but recently we have had several instances in which our non-existent credit score has negatively affected our lives.

foreclosure

For starters, we now have a daughter that is 19 and as any parent would like to do, we would like to help her in her next stage of life.  She is currently renting a basement apartment and paying 400 per month.  With all of the foreclosures in the housing market, hubby and I decided that we could help her by buying a low cost foreclosure and allowing her to pay us back.  We felt that we could allow her to pay us a lower amount and help her get a better start in life.  She is working full time while going to college and is a very responsible young lady.  Anyway, we spent some time looking at HUD foreclosures on the HUD website here and found several places that we felt would work.  We assumed that we could borrow money against our home and have no problem.  WRONG!  When we called the realtor we were told that they wouldn’t even talk to us without being able to pull our credit history.  And or course, we don’t have one so she basically laughed at us.  Her answer was to go get a credit card to build our credit score so that we could build our score.

I also recently went to add insurance on a newly purchased used truck and found out that our insurance company now uses credit scores to determine insurance rates.  Guess what?  Ours went up because or our low score.

So I decided to do some research and found out that there are many negative impacts from a low credit score.  Many of which I did not know.  Did you?

  • Prospective employers can access your credit history to determine whether or not to offer you a job
  • Landlords can use your credit score to determine whether or not to rent to you or to determine how much of a deposit you must pay
  • Auto insurance rates may be higher
  • Home insurance rates may be higher
  • Deposits for utilities may be higher
  • It may be impossible for you to get a mortgage
  • It may be impossible for you to start a small business

credit card

With all of this taken into consideration, my husband and I have had a conversation I never expected to have.  We are considering getting a credit card!  GASP!  I know but we have to start somewhere so if you have other ideas, please help me out.  List them in the comments.  We are open to advice.

About these ads