Hello Everyone!!! I have an interesting question/topic and would love to have a "expert" answer. (Or anyone who wishes to discuss this....) My goal is to be debt-free. Is it a bad decision to clean up a poor credit rating and leave the situation "as is". I don't feel the need to pile on more debt - adding credit cards with high limits on my back - so I can have a 700 plus rating. Anyone have any advice/opinions? Is it better to clean up and change to a cash only lifestyle? I love the idea of living debt/credit card free - as crazy as that sounds!!!! Thanks in advance!!
I sort of addressed this in this post. Remember, you don't necessarily need to get MORE credit cards in order to build up your scores. I think many people around here do that more for status than any concrete need. It took me 1.5 years of hard work to get completely debt-free ($30K plus), and the more I progressed, the less getting more cards or increased CL mattered. FICO by design provides top negative factors, so where none applies, they pull a BS reason out of their head instead of leaving it blank. Don't let that deter you. Make a plan to snowball your debt (that is, pay off the debts with the highest interest rate first, then add the payment amount you're no longer making to the next highest interest debt). Stay motivated by reaching out to like minded people. Read similar stories on www.stretcher.com or the MSN Your Money board for inspiration. And I'm not sure what you mean by this: "Is it a bad decision to clean up a poor credit rating and leave the situation "as is". "???
My goal is to be debt-free. 1*Is it a bad decision to clean up a poor credit rating and leave the situation "as is". I don't feel the need to pile on more debt - adding credit cards with high limits on my back - so I can have a 700 plus rating. 2*Anyone have any advice/opinions? Is it better to clean up and change to a cash only lifestyle? I love the idea of living debt/credit card free - as crazy as that sounds!!!! kharing ======================================= 1* and 2* You need the high score other wise you pay through the nose for insurance. THE END ** *** ** LB 59 """"```--~~~~~~~~~--```'""'''
Re: Re: Haven't been here in a LONG time... If you clean it up how can it remain the same??????????????????? ?????????????????????????????????????????
Re: Re: Haven't been here in a LONG time... Rina has the right idea. BUT--focus not only on debt, but on building wealth. Debt isn't in and of itself bad. If you can borrow money cheaply and invest it for a profit, that's what you should do. For example, suppose you get an offer of 0% for a year. They'll send you a check (Citi will usually do this, as will some of the others). Take that check and invest it in a 12-month CD. Pay the minimum payments out of your ordinary income. At the end of the year, cash the CD, pay off the balance on the account, and you've made money using someone else's money. You don't want to pay more than the minimum, because THIS MONEY IS FREE. So you use your normal income for other things that would cost you interest if you had to finance them. It's the same way with a mortgage, especially if you have a low interest rate. The interest is tax deductible, saving you taxes. You can probably invest the money and make more than your effective interest (what you paid minus the tax benefit). Also, the money is where you can get it if you need it, and working for you. Owing the house doesn't increase wealth. Some people say that they make money on the appreciation. Guess what? It appreciates whether it's paid for or not. So using the leverage to increase wealth gives you more in the end. I hope that I'm never completely debt free. That means I don't have anyone else's money working for me! See how many Rockefellers or Gettys got rich by paying cash for everything.
Re: Re: Haven't been here in a LONG time... You can be "DEBT FREE" (or almost DEBT FREE) and still use CREDIT... I personally am on a CASH FREE DIET... A "CREDIT FREE" DIET would cost me WAY TOO MUCH!!!
