Low Credit Score is Good?

[Devil's Gun Trigger Man]

That is what I'm saying. If you have a ZERO credit score, then you are NOT seeking financing, you are paying CASH. If you have a HIGH credit score, you are seeking financing.

sometimes frat, but I don't know many people that just got $30,000 to just plop down and roll off the lot like that with no note. The whole time I was selling cars I only saw it happen 2 times, and both times it was Asians, for whatever that's worth.

 

[ABE]

sometimes frat, but I don't know many people that just got $30,000 to just plop down and roll off the lot like that with no note. The whole time I was selling cars I only saw it happen 2 times, and both times it was Asians, for whatever that's worth.

I have friends who save every last nickel. They buy boats, cars, etc. with no loan. I can't convince them to take out a loan, or a line of credit for anything. They are scared of going into "debt"... at all costs. Debt is a tool. Work that muthafukka to your advantage. It was talked about in another thread but people get rich off life insurance, bankruptcy, and equity...


All of that other stuff is cool, but I see more folks making a come-up off those three.

 

[Suge]

Having a credit score of zero is silly in my opinion, unless you have enugh wealth to pay for everything. It is worse than having bad credit. At least with a poor score you can improve it with time. A zero score you will find it hard to get credit when you need it. And unless you have the ability to pay cash for everything you need in your life, home included, then you need to have a high credit score. You can not secure a home loan with a zero score. And if you have no other loan in the world, having a home loan is the one to have, simply for all of the tax breaks that you can take by having a mortgage.

And as far as high credit score and slave comparison and making someone else rich, that is one of the silliest things I have ever heard. You not be a slave to anything that you do to yourself. Until they make you finance items, you are not a slave to those lenders or their products. And if you wear anything that you did not make yourself, eat food that you did not grow or kill, drive a car, brush your teeth, watch TV, anything, you are making someone else just as rich. What is the difference in pay 4.5% interest and pay 1.00 for something that it cost a company .10 to make.

Truth is, the higher your score, the less money you actully pay in interest. And for most small purchases that you may finance(electronics, etc.) you can actually secure financing that will allow you to pay zero interest if you pay the loan off in a predetermined time frame. I will often finance purchases that I can easily pay cash for simply to continue to build my credit score. Same with credit cards. Which if we all used them properly, yoou would never pay any interest.

Credit is like your word. And that is why the score has become such an important issue. If you keep your word and repay your obligations as you agreed that you would, you shouldn't have many issues (there are always exceptions).

 

[Da_Sperm]

Suge, I hate to say it, but in my opinion, your thought process is exactly what the lenders want. Until you have been on the OPPOSITE of the financing fence, you wouldn't understand. A lender can't make money off of ANYONE who doesn't want financing. Basically, any financing you do that doesn't generate money for you is BAD FINANCING. In other words, if you finance a car for $300 per month and that car doesn't make $301 or more a month for you, then it is bad financing.

TAX BREAKS?
Name one tax break that the government gives you that doesn't cost you money?

If we both buy a house for $100,000, I pay CASH and you finance, who pays more for the house (tax breaks included), me or you? Your interest may be $7K per year and you get a $1K tax break on the interest paid, how much have you spent to get that $1K tax break? You spent $6K. Although, I didn't get the $1K tax break, I didn't spend $6K either.

If I buy a car for $15,000, I pay CASH and you finance, who pays more for the car (tax breaks included), me or you?

Financing only makes sense if it generates INCOME for you, otherwise its generating income for someone else. PLAIN AND SIMPLE.

THEREFORE, a ZERO credit score means you are paying CASH for EVERYTHING and you are not a FINANCIAL SLAVE to anyone.

 

[Suge]

Sperm I am not debating your logic, I am debating the practicality of your logic. Paying cash is the ideal way to pay for anything, but if we are honest....who has the type of cash to pay for everything that you need or want. That is why financing exist. You are speaking of the ideal situation, I am talking about reality. In your example you use a house that cost 100K. The people who have 100K to buy a house, aren't going to live in a 100K neighborhood. Besides, how many average people have 100K just sitting around. And if you save to buy that house as you implied, where are you going to live in the meantime? If you rent, you are still lining someone else's pockets. So what is the difference in paying the landlord and paying interest. Interest is simply the money that I am being charged for them loaning me the money. I pay for every other service that I need, so why not interest. I pay the grocer for the service of having all the items in one location and I don't have to grow them myself. What is the difference? In your example you are making it as simple as normal addition and subtraction. Of course I would pay more if I finance and you pay cash, but when life becomes as simple as addition and subtraction, you let me know, and I will advocate zer credit ratings.

Zero credit may mean you are not a "slave" to anyone as you put it, but be realistic and tell me how many poeple you know can pay cash for everything......and I mean everything. Again, you can't be a slave to any agreement that you enter legally. Besides if there is any good debt to have, it is a home mortgage. If you manage it properly, a home will pay for itself, interest and all. So why would I exhaust all of my savings for that purchase. I agree with not financing a TV and paying 18% interest. But the zero score logic just doesn't apply to all circumstances.

My thinking process is exactly what lenders want, I agree. But my credit score is tremendous and I rarely pay high interest rates, and I never allow same as cash payments to incur any interst. I don't buy what I can't truly afford. That is the difference with my debt and most. The system is what it is. So I use the system to the best of my ability. You pay cash, I'll take 12 months same as cash, no interest, building my credit rating, and continue to get low interest on large purchases like homes and cars when I need them. I am not advocating anyone use credit and debt as a methid to live beyond their means, but I am advocating using your credit and debt to help you live, and function on a daily basis.


O yeah, Tax breaks or incentives are only in reference to a mortgage loan. All interest is a tax dedectable.

 

[ALPHA3]

Suge, I hate to say it, but in my opinion, your thought process is exactly what the lenders want. Until you have been on the OPPOSITE of the financing fence, you wouldn't understand. A lender can't make money off of ANYONE who doesn't want financing. Basically, any financing you do that doesn't generate money for you is BAD FINANCING. In other words, if you finance a car for $300 per month and that car doesn't make $301 or more a month for you, then it is bad financing.

TAX BREAKS?
Name one tax break that the government gives you that doesn't cost you money?

If we both buy a house for $100,000, I pay CASH and you finance, who pays more for the house (tax breaks included), me or you? Your interest may be $7K per year and you get a $1K tax break on the interest paid, how much have you spent to get that $1K tax break? You spent $6K. Although, I didn't get the $1K tax break, I didn't spend $6K either.

If I buy a car for $15,000, I pay CASH and you finance, who pays more for the car (tax breaks included), me or you?

Financing only makes sense if it generates INCOME for you, otherwise its generating income for someone else. PLAIN AND SIMPLE.

THEREFORE, a ZERO credit score means you are paying CASH for EVERYTHING and you are not a FINANCIAL SLAVE to anyone.

You make some valid points Frat, but who has all that kind on money sitting around to go out and buy a car or house?

 

[Da_Sperm]

You make some valid points Frat, but who has all that kind on money sitting around to go out and buy a car or house?

Everybody does. I see 18 year old kids save $3K to go buy cars everyday. I know regular people who pay $15K for cars for their kids 16th birthday. Now, if you just got to have that $40K Lexus, then yeah, you may need a loan.

Here is a prime example, in which I'm trying to get us to THINK outside the box. In my neighborhood, there are plenty of NICE houses. I have met a FEW people who RELOCATED from California to my neighborhood. They sold their house in Cali, and paid CASH for the house in Texas. They didn't SAVE that $200K, $250K, or $300K, they USED the equity from a previous investment to pay for that current investment.

That is REAL WORLD. That is REALITY. That is LIFE.

What affect did their credit score have on their home purchase in Texas? What affect will their home purchase in Texas have on their credit score? NONE! The credit people won't know about the home purchase because they never got financed.

 

[Jacy]

Everybody does. I see 18 year old kids save $3K to go buy cars everyday. I know regular people who pay $15K for cars for their kids 16th birthday. Now, if you just got to have that $40K Lexus, then yeah, you may need a loan.

Here is a prime example, in which I'm trying to get us to THINK outside the box. In my neighborhood, there are plenty of NICE houses. I have met a FEW people who RELOCATED from California to my neighborhood. They sold their house in Cali, and paid CASH for the house in Texas. They didn't SAVE that $200K, $250K, or $300K, they USED the equity from a previous investment to pay for that current investment.

That is REAL WORLD. That is REALITY. That is LIFE.

What affect did their credit score have on their home purchase in Texas? What affect will their home purchase in Texas have on their credit score? NONE! The credit people won't know about the home purchase because they never got financed.

But some folks need credit to get to the point that couple is at. Everyone didn't have the same luxury of being (of that couple) smart about their finances. Some folks are just getting it, at all ages. Am I missing the point?

We don't know what that couples credit was like 10 years ago. That couple may have needed credit (good, bad or none) once upon a time to get to the point where they could simply take a cash payment and apply it to a new home.

The rest of us are working to get to that point hopefully.

 

[GRAM4LIFE]

Most people are starting off with nothing. At least, most of us I know.

I pay extra on everything to cut back on interest but I also live within my means. My means might be greater than others though. If I could pay cash for a house, I would. Being able to is totally different. Therefore, I have to make sure I have a good credit score to buy my first home and will make those types of decisions in future. At no point, would I be able to have a zero credit score now.

Also, it's easy for someone living in Cali to come to Louisiana and buy a home with cash but more than likely you can't do it the other way round. You could but you sure wouldn't get the same home out of it.

 

[Dr. Phreeze]

Most people are starting off with nothing. At least, most of us I know.

I pay extra on everything to cut back on interest but I also live within my means. My means might be greater than others though. If I could pay cash for a house, I would. Being able to is totally different. Therefore, I have to make sure I have a good credit score to buy my first home and will make those types of decisions in future. At no point, would I be able to have a zero credit score now.

Also, it's easy for someone living in Cali to come to Louisiana and buy a home with cash but more than likely you can't do it the other way round. You could but you sure wouldn't get the same home out of it.

You can say the same thing about Northern VA. I stay in Louduon County. The richest county in the US.

 

[Suge]

Here is a prime example, in which I'm trying to get us to THINK outside the box. In my neighborhood, there are plenty of NICE houses. I have met a FEW people who RELOCATED from California to my neighborhood. They sold their house in Cali, and paid CASH for the house in Texas. They didn't SAVE that $200K, $250K, or $300K, they USED the equity from a previous investment to pay for that current investment.

That is REAL WORLD. That is REALITY. That is LIFE.

What affect did their credit score have on their home purchase in Texas? What affect will their home purchase in Texas have on their credit score? NONE! The credit people won't know about the home purchase because they never got financed.

They needed credit to buy the first house in California! And furthermore, the housing market in Cali and in Texas are vastly different. If that Cali couple bought houses out west prior to say 2000 when homes values out there shot up so quick, then of course they had equity in their homes. But how did they get the first home to be able to build equity and pay for the second home? Buying the home in Texas will affect their credit score by the fact that they had to pay off the home in Cali. Paying off a mortgage, even if it is only to assume another one on a new house will vastly improve your credit score. And if they needed to borrow any mony, owning their home increases their credit rating because they now have some colateral and equity to justifty someone lending them money, if they need it. Still this is one scenrio, how many other people in your neighborhood bought their homes this way?

That is reality, but not the reality if most. You really need to leave Texas and see what it cost to live in some places. For what you get for 200-250 in Dallas is 400-450 in Tidewater, even greater in DC, and even more than that in Cali.

Again I say, zero credit score may be a goal, but it is not a reality for most. For me it is a reality that I am not trying to reach.

 

[ABE]

And they check your credit for insurance now a days...

 

[Da_Sperm]

You really need to leave Texas and see what it cost to live in some places. For what you get for 200-250 in Dallas is 400-450 in Tidewater, even greater in DC, and even more than that in Cali.

It was just an example. I know people who buy houses in Florida with CASH. Someone on here say their father REHABS houses, usually you don't get loans to REHAB and I don't think that SWACPager lives in Texas.

I know it is not REALITY for most, but the fact is ZERO credit simply means you don't owe anybody. Ask any 1st grader (well, those whose mama hasn't screwed up their credit).

And on the houses in Tidewater, it is a give and take. The loan process is the same EVERYWHERE. If a house cost $400K there, then the income to obtain the loan must support paying $400K. So a person buying a $200K house in Texas, probably can't afford a $400K house in Texas. A person buying a $400K house in Tidewater, can afford a $400K house in Texas also.