Brother, your debt to income ratio plays a bigger role in determining credit worthiness than your payment history. Your payment history can help you qualify for a better rate, but having a bunch of credit cards with high available credit limits will hurt you, especially if you are trying to buy a house.
True! Because we are dept free we no longer have a credit history, banks frown on that, even if you own everything out right, they want you to be in dept to someone to show a history.
Well, I can only speak what I have been told. I remember distinctly being turned down for loans when I did not have credit cards because I did not have any credit history. My first car loan interest rate was double digits high, because I did not have any credit history. My first cell phone, my gas and electric-- all did credit checks and when I did not have a "significant credit history", my initial deposits were high.
A few years later, several credit cards later, I was able to purchase my home at a nice interest rate last year. Then, I was able to refinance earlier this year for an even nicer rate!
This is possible by God's grace and having a significantly positive credit history.
Maybe I didn't word my post right or something. Yes, a payment history with other creditors will help you qualify for loans. It isn't, however, as big an issue as debt to income ratios. In other words, having a good payment history, but a high debt to income ratio (even if you have a zero balance on those cards) will make it harder for you to buy a house. Even though those high limit cards may be at a zero balance, having them still poses a potential credit risk for lenders. There is a tricky balance between how much credit you have available to you and the amount of credit you are applying for. Did I explain it better to you this time, Brother?
True! Because we are dept free we no longer have a credit history, banks fawn on that, even if you own everything out right, they want you to be in dept to someone to show a history.
Sister, my guess would be that your need for credit, if you own your home free and clear, would be just about non-existant. I know some folks who have saved so much money after becoming debt free that they pay cash for any vehicles they buy, any remodeling projects they do on their homes, and any other big ticket items they may need. I have yet to even buy a home, so I can't imagine what being debt free would be like from that perspective. I definitely know what it means to be debt free 'cause no one would loan me money though!
Maybe I didn't word my post right or something. Yes, a payment history with other creditors will help you qualify for loans. It isn't, however, as big an issue as debt to income ratios. In other words, having a good payment history, but a high debt to income ratio (even if you have a zero balance on those cards) will make it harder for you to buy a house. Even though those high limit cards may be at a zero balance, having them still poses a potential credit risk for lenders. There is a tricky balance between how much credit you have available to you and the amount of credit you are applying for. Did I explain it better to you this time, Brother?
I understood you the first time. The point I was making is that without a positive payment history, it is difficult (maybe even impossible) to do many things involving credit, to include purchasing a home.
I wasn't disagreeing with you, just sharing my experience with credit and how responsible usage of credit cards helped my credit score.
__________________
"The choices we make reveal the true nature of our character."
I know that Dave Ramsey really teaches against credit cards period, no exceptions. I have credit cards, but pay them off faithfully at the end of each month. I get lots of airline and hotel points, so I feel like it's good stewardship, rather than bad. But Dave says that you're letting man's system have your money, even if it's for less than a month, and he thinks that's wrong.
What think ye?
Sherri, I was going to write something smart alleck but then I realized this is another one of those aposto-phrases we were talking about pages and pages ago...the question,
"Do you believe in...." "We don't believe in..."
I know we all believe in Jesus yet some actually do believe in credit cards.
I believe that any church that promotes using credit (not debit that is deducted immediately from your account) for tithes and/or offerings is irresponsible, and wrong wrong wrong!
I understood you the first time. The point I was making is that without a positive payment history, it is difficult (maybe even impossible) to do many things involving credit, to include purchasing a home.
I wasn't disagreeing with you, just sharing my experience with credit and how responsible usage of credit cards helped my credit score.
I see. I thought you thought I was saying you didn't need a payment history. You were talking about a payment history, and I was talking about debt ratios. At any rate, they both play a role in getting credit.
At the rate I am going, I will never buy my own home. I am 41, have no interest in signing away 30 years of my life, and have no prospects for a huge load of cash being dumped in my lap.
I see. I thought you thought I was saying you didn't need a payment history. You were talking about a payment history, and I was talking about debt ratios. At any rate, they both play a role in getting credit.
At the rate I am going, I will never buy my own home. I am 41, have no interest in signing away 30 years of my life, and have no prospects for a huge load of cash being dumped in my lap.
I know you are'nt asking for advice, but this IS a buyers market, and it should be easy to get a mortgage that is equal to or less than rent...
PS you can send me your tithe this week since you have no "church"!
__________________ "It is inhumane, in my opinion, to force people who have a genuine medical need for coffee to wait in line behind people who apparently view it as some kind of recreational activity." Dave Barry 2005
I am a firm believer in the Old Paths
Articles on such subjects as "The New Birth," will be accepted, whether they teach that the new birth takes place before baptism in water and Spirit, or that the new birth consists of baptism of water and Spirit. - THE PENTECOSTAL HERALD Dec. 1945
"It is doubtful if any Trinitarian Pentecostals have ever professed to believe in three gods, and Oneness Pentecostals should not claim that they do." - Daniel Segraves
I'd like to not believe in them, but when I open my wallet, they are there. I can't help but see them.
There ya go.
I have had as much as twenty thousand on Credit Card at zero interest for one year.
__________________ "It is inhumane, in my opinion, to force people who have a genuine medical need for coffee to wait in line behind people who apparently view it as some kind of recreational activity." Dave Barry 2005
I am a firm believer in the Old Paths
Articles on such subjects as "The New Birth," will be accepted, whether they teach that the new birth takes place before baptism in water and Spirit, or that the new birth consists of baptism of water and Spirit. - THE PENTECOSTAL HERALD Dec. 1945
"It is doubtful if any Trinitarian Pentecostals have ever professed to believe in three gods, and Oneness Pentecostals should not claim that they do." - Daniel Segraves
I am 41, have no interest in signing away 30 years of my life, and have no prospects for a huge load of cash being dumped in my lap.
Linear Mode
