Community Chat

[Fifi1]

On 1/4/2015 winamac1 said:

On 1/4/2015 millieshops said:

On 1/3/2015 NoelSeven said:

On 1/3/2015 lacey1 said:

Be aware, that being debt-free will not give you a good credit score. Managing your debt and not missing payments will give you a high score.

People that pay cash for everything will be surprised when they check their credit scores. I tried to explain this to a co-worker. She had saved enough money to pay her daughter's first year, college tuition. I told her she should get a no annual fee, credit card that offers points/rewards and use that to pay the tuition bill. She said, 'Oh, no. I don't want to owe on a credit card'. I explained to her that if she had the money, already-she could pay off the credit card amount with the first payment, and enjoy the rewards. She just didn't understand how credit works.

Not true. We haven't had any debt for a long time and we have a very high score.

I second that. I have no debt except the monthly bill on my credit card which is paid off each month.

My credit score is in the top category.

What's right about lacey's statement is that my credit score WOULD be high if I took out a mortgage or paid a car loan. BUT - a higher credit score is of no value to me because it can't change my category. FURTHER, getting that high score would cost me several thousand dollars in either mortgage interest or in a car loan.

Someone needs to tell me why that makes sense!

I have a high credit score too, and I also have no debt. It's not 800, but it may be due to closing some credit cards awhile back. I've learned not to do that.

I don't need a high credit score anyway as I'll never take out another loan. If we ever move, we'll pay cash for our house. If we ever buy a car, we'll pay cash. I hate debt. That's one thing I did learn from my parents. As I said earlier, it's easier for us to be debt free not being blessed with children. We haven't had to save for colleges, etc.

We too have very good credit, but closed accounts a few years ago, which knocked our score down some! At time didn't realize we would take hits! It's ok, as you say, Win, we just purchased a very nice vehicle and paid cash, will pay cash if we buy another home. The salesman who sold us our vehicle couldn't believe our credit score was so great, and no debt....he wanted credit for getting us to take a loan really badly!

[60sgirl]

I've been debt free for years, have a credit score of 800, use my Discover and Amex for purchases and pay them off as soon as the statement arrives. I earn points, just used my Amex points to buy an Emjoi with additional rollers on Amazon, cost me nothing.

Three years ago I went to buy a car and the salesman came back after running my score and said you can pretty much buy anything you want with the lowest rates. If I ever needed my cards for anything I else I have $20,000 line of credit on them. Using them and earning points and paying in full have many advantages and if you ever do need to buy something on time, you have "leverage" with a high credit score.

[muttmom]

We said we would not retire without being debt free. After college tuition, weddings, and house repairs were completed, it was fairly easy for us to pay off our mortgage and cars.

I remember the days when our monthly credit card bills were not paid in full but back then you could write off credit card interest on your income tax.

[qvcaddition]

I have a plumbing debt, but no interest on the card. No other CC debt, no mortgage for years, or car payments. Of course no retirement, either, but I,m OK if I stop QVC with using my savings. Doing good, not tempted to buy, the year of frugal with buying for me, have enough. My car is 1997, but only 78,000 miles. It,s paid for and not out to impress.

[PamelaSue72]

We pretty much are debt-free at this point. Our house is ours, as of two years ago. No mortgage, no credit card payments as we pay the balance every month. We pay the normal monthly bills: electricity, cable, phone. No water or sewer as we live in a rural area with a well and septic system.

Both DH and I work full-time and much of our salaries go to our retirement accounts at this point. We both have very high credit scores.

[ShowMe]

Have been totally debt free for a number of years now. And, I have to say it is a good feeling. I do not consider the monthly utilities, rent, auto and renters insurance, supplemental health insurance and prescription coverage, groceries, etc. as debt.....that is necessities and are paid every month.

I do not purchase things unless I know I can pay for them.....

I would like to add.....have been retired 9 years now........

[esmeraldagooch]

Very interesting topic to read. So many paths to obtain financial freedom. DS just purchased his first home. He hasn't used his CC in several years since starting Dave Ramsey's plan and his credit score was over 800. This blows some theory's here about how the score is created and maintained. Since no one can forecast if or when we may loose our jobs, being debt free is so important. A 0% car loan doesn't give as much peace of mind as a paid off car with no payments when times are tough.

[Qwackertoo]

On 1/5/2015 esmeraldagooch said:

Very interesting topic to read. So many paths to obtain financial freedom. DS just purchased his first home. He hasn't used his CC in several years since starting Dave Ramsey's plan and his credit score was over 800. This blows some theory's here about how the score is created and maintained. Since no one can forecast if or when we may loose our jobs, being debt free is so important. A 0% car loan doesn't give as much peace of mind as a paid off car with no payments when times are tough.

Yes 0% is nice when available and several of us "qualified" that statement with leaving "our" money in the bank . . . so it could be paid off at any time the borrower deemed it necessary.

It would be a much better equation IF the money was earning any significant interest but then there wouldn't be 0% loans either.

I'd trade my 0% loan for some 18% interest rates on CD's in a heartbeat . . . like my grandmothers were earning for part of the 80's . . . but that would send car sales, home sales, and other stuff to a screeching halt/slowdown.

While yes, banks are still making money . . . they certainly aren't sharing very much of it with their savings and CD account holders. The rates are so dismal.

[goodstuff]

On 1/3/2015 Peaches McPhee said:

It is one thing to be debt free, but you have to recognize the need for a mortgage.

It takes some work and planning, but it's actually quite possible to become mortgage free as well. We haven't had any debt of any kind in many years, and recently retired totally debt free, including a paid-off house. A beautiful feeling!

[croemer]

On 1/5/2015 GoodStuff said:

On 1/3/2015 Peaches McPhee said:

It is one thing to be debt free, but you have to recognize the need for a mortgage.

It takes some work and planning, but it's actually quite possible to become mortgage free as well. We haven't had any debt of any kind in many years, and recently retired totally debt free, including a paid-off house. A beautiful feeling!

I have heard that argument...*need for a mortgage* for several homes we have owned and I must say...being mortgage free has been the greatest feeling of all. JMO