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Message
re: Credit Rating
Posted on 10/28/11 at 12:50 pm to LSUAfro
Posted on 10/28/11 at 12:50 pm to LSUAfro
quote:
He's not asking if you think he's financially responsible enough to handle a credit card.
When he posed the question about credit rating, IMO, it would be wrong if we don't talk about the pro's and cons of credit, since he stated he has no experience with credit. An informed consumer is a dangerous consumer.
quote:
Sure. That sounds great, but it is virtually impossible for most, and in some cases it doesn't even make the most financial sense to pay cash.
To tell someone that they should pay for everything in cash and make no attempt to establish credit is doing them a huge disservice.
You never know when a situation might arise that will need you to rely on having a solid credit history, and being denied an opportunity or being penalized with high interest rates because you refused to believe that you would ever need solid credit history is silly.
Can you elaborate on why you think it is virtually impossible for someone to pay cash for everything?
This post was edited on 10/28/11 at 12:52 pm
2
Posted on 10/28/11 at 1:09 pm to Will Cover
quote:guys I appreciate all of the various insight
Can you elaborate on why you think it is virtually impossible for someone to pay cash for everything?
I can't pay cash for everything
please don't get into a fight over my questions
Posted on 10/28/11 at 1:10 pm to Will Cover
quote:
When he posed the question about credit rating, IMO, it would be wrong if we don't talk about the pro's and cons of credit
Can't argue with that, but that wasn't the question.
quote:
Can you elaborate on why you think it is virtually impossible for someone to pay cash for everything?
That's not my favorite statement I've made, but generally speaking it is virtually impossible for most college graduates to live 100% debt free in a "normal" life.
To graduate from college with zero debt for many is not an option.
Student loans are a neccessity for many.
Without much savings, if any, and college unexpected surprises may arise.
Most are driving older cars and what if it needs maintenance? Persoanl transportation is a must to meet demands of work and school. Need a credit card to pay for those repairs. Might even have a bank loan to be paying for that older car.
Most people that weren't spoon fed through their first 25-30 years of life never had the ability to "get ahead". Using debt to help promote your self in the life is a must in so many circumstances. Paying cash for everything just isn't an option for most, not just the average American, but a large majority of the population.
It may sound good to some in theory...just not plausible for most.
Posted on 10/28/11 at 1:19 pm to Ford Frenzy
quote:
guys I appreciate all of the various insight
I can't pay cash for everything
please don't get into a fight over my questions
No fight. Can't pay cash for everything myself nor do I want to.
I've had a student loan that gets autodrafted out of my account for the last 8 or 9 years that is at a 2.1% interest rate. Could I pay it off? Sure. Do I want to right now? Nope. Over 10 years it will cost me less than $200 in interest. Cash in savings or in an invesment vehicle is more valuable to me.
Understanding the value of cash/debt/and good credit and how they work together is invaluable.
This post was edited on 10/28/11 at 1:20 pm
Posted on 10/28/11 at 1:21 pm to LSUAfro
I just ran my credit score, is 813 any good? I'm a little embarrassed posting it since it's probably not too good.
Posted on 10/28/11 at 1:23 pm to Chad504boy
quote:
I just ran my credit score, is 813 any good? I'm a little embarrassed posting it since it's probably not too good.
You should probably go get another credit card. You're leaving points on the table.Posted on 10/28/11 at 2:51 pm to Ford Frenzy
quote:
please don't get into a fight over my questions
Regardless of what is said in this thread, you have to decide what is right for you.
Posted on 10/28/11 at 2:53 pm to Chad504boy
quote:
I just ran my credit score, is 813 any good?
MT standards, yes.
OT standards, no.
Hard pull or soft pull?
Posted on 10/28/11 at 2:56 pm to Chad504boy
quote:
I just ran my credit score, is 813 any good? I'm a little embarrassed posting it since it's probably not too good.
:tots:
Posted on 10/28/11 at 4:30 pm to HeadyMurphey
quote:
Most people that weren't spoon fed through their first 25-30 years of life never had the ability to "get ahead". Using debt to help promote your self in the life is a must in so many circumstances. Paying cash for everything just isn't an option for most, not just the average American, but a large majority of the population. It may sound good to some in theory...just not plausible for most.
Really? If you cant wait tables or work a part time job and pay for college and an apartment then you're just lazy....fact. Anyone can make their way through college, graduate, get an apartment and rent for the rest of their lives and never borrow money.
If you choose to buy a house and finance it that's fine, but don't act like society has a gun to your head and forces you to borrow. It's all about choices..period
This post was edited on 10/28/11 at 5:17 pm
Posted on 10/28/11 at 4:37 pm to LSUAfro
quote:
Over 10 years it will cost me less than $200 in interest. Cash in savings or in an invesment vehicle is more valuable to me. Understanding the value of cash/debt/and good credit and how they work together is invaluable.
Do you understand this value you speak of? 200 in interest over 10 years? Might want to check your math. fyi 2% of 1k is 20 a year.....surely you owe more than 1k on student loans.
Posted on 10/28/11 at 5:02 pm to Will Cover
quote:
If you can pay for everything in cash, establishing credit will not matter.
Yeah - if the OP is planning on paying for his first home 100% in cash since without a credit rating you can't get an even semi-reasonable mortgage. Otherwise, it will matter a great deal.
Besides that, using a credit card as much as possible can get you nice rewards. Of course, pay it off every month, and it's like getting a 1-2% discount on everything you buy. Not only that but you never have to worry much about having your wallet stolen. If someone steals your cash it is gone, if someone steals your credit card your loss is limited (and often zero).
Posted on 10/28/11 at 9:08 pm to Gutterman81
quote:
Over 10 years it will cost me less than $200 in interest
I thought this was off as well. Paying the minimum for 8 years already with 10 more years to go?
Posted on 10/31/11 at 3:37 pm to Ford Frenzy
quote:
my parents say its not a good idea because I'm eligible to use USSA, my dad is military
You parents are giving you bad advice. You should be able to get a credit card from a company like Capital One with a small ($300-$500) limit. You can use that to start building some credit.
Posted on 10/31/11 at 3:42 pm to Chad504boy
quote:
I just ran my credit score, is 813 any good? I'm a little embarrassed posting it since it's probably not too good.
Obvious troll is obvious.
Posted on 10/31/11 at 3:58 pm to Ford Frenzy
You have to have credit to have a credit score....so get started with something small and don't screw it up.
you are welcome
you are welcome
Posted on 10/31/11 at 4:25 pm to Shankopotomus
The real question is: What's the downside?
Why would you not do it?
Why would you not do it?
Posted on 10/31/11 at 9:19 pm to Gutterman81
quote:
Really? If you cant wait tables or work a part time job and pay for college and an apartment then you're just lazy....fact. Anyone can make their way through college, graduate, get an apartment and rent for the rest of their lives and never borrow money.
If you choose to buy a house and finance it that's fine, but don't act like society has a gun to your head and forces you to borrow. It's all about choices..period
Seriously? Can you break down this budget for me please...
Posted on 11/1/11 at 8:41 am to LSU9102
quote:
Over 10 years it will cost me less than $200 in interest
I thought this was off as well. Paying the minimum for 8 years already with 10 more years to go?
Reading must not be your thing. It stated I've been paying close to 8 years. Said nothing about paying 10 more.
Yes. $200 is exaggerated, but on a $3,000 loan 2% interest is not worthy of note. It's easier to spend more money at happy hour one night after work than I pay in interest yearly.
And anybody that doesn't understand how important a good credit score can be, is somebody I probably would avoid having a real conversation with.
quote:
The real question is: What's the downside?
Why would you not do it?
Posted on 11/1/11 at 8:55 am to Gutterman81
quote:
Really? If you cant wait tables or work a part time job and pay for college and an apartment then you're just lazy....fact. Anyone can make their way through college, graduate, get an apartment and rent for the rest of their lives and never borrow money.
If you choose to buy a house and finance it that's fine, but don't act like society has a gun to your head and forces you to borrow. It's all about choices..period
Oh Really? Fact?
$6,000/year tuition/books(@ LSU which is considerably cheaper than many schools)
$4,800/year rent($400/month seems fair)
$600/year bills(electric,cable,water split 3 ways)
$1,500/year car insurance(seems fair for a 20 year old. Mine was actually more)
$1,500/year gas($30/week)
$2,400/year car note($200 month for a cheapy somewhat reliable and the fact that you have to pay 12% interest because you have NO CREDIT)
So, you're at $16,800 before you've even fed yourself or had a drop of booze. These numbers could be a little lower or could be a little higher depending on your "want" level, but they're probably pretty close to average yearly expenses for a college student.
You'd have to have a pretty damn good 20-30 hour/week job to be completely self-supporting, have even a remote bit of fun in college, and eat better than ramen noodles nightly. And, god forbid you have to buy new tires or your car breaks down. Just run out back to your money tree and take care of that.
Obviously you didn't have to go through this situation.
This post was edited on 11/1/11 at 9:04 am
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