No Credit May Be The Best Line of Credit

Written by DebtFree on June 25th, 2008

Many people don’t like to talk about their credit openly. I can really understand that. It’s somewhat personal and private information. The world really revolves around your credit. Very important things in life are granted and given to you if you have good standing credit. Things like cars, houses and even minor luxury items such as a family boat. Nothing crazy, just a very basic boat. Wouldn’t that be nice?

But here’s the thing, if you don’t have good credit, it’s really hard to get any of these things. For those who do have average credit, it’s like your going to be punished for having just average credit by being approved for a loan with a higher interest rate.

In many ways, it almost seems backwards. Many folks who have suffering credit have it for a reason. Money is tight or you might have had a bad month at the job, things like that. It would seem like for the folks who are struggling that they should be given the break and honored a low interest loan of some kind. For the folks that do get approved, they end up working twice as hard and sweat twice as many bullets towards paying off the approved high interest loan.

Quite the opposite happens to folks with outstanding credit. Life is a breeze as they coast by having amazing loan offers with very low interest rates. With all that being said, to me and in my experience. Sometimes having no credit is the best line of credit.

Back in my early twenties, my wife and I had a hell of a time financially. We had a kid very early in our relationship, my wife already had one of her own. We both were working just very average jobs and lived in an apartment. Things were very difficult. At the time; however, we both had amazing credit. When you’re young and in your twenties, everyone will approve you for credit cards, loans, etc…

We really had no choice but to live off credit cards. We didn’t make enough money to pay the bills, purchase food and pay for things like clothing or school supplies for our two kids. As the years went by we got into quite a bit of debt. Needless to say our credit suffered very badly. Eventually we paid all our debts as we continued to advance in our careers and make more money. But we sure did pay a hefty price.

Today, my wife and I don’t use credit cards. We have re-established our credit by way of paying our mortgage always on time and successfully paying off our auto loan. But because of that experience we had in our early twenties, we will never get a credit card again. We stand by the theory that if you can’t afford something to pay cash for it right then and there, then it’s not worth purchasing.

If I want something, I spend a long time thinking about it and question whether I really want that item or not. Really I have no choice but to think about it as I have to save money up to make the purchase. So really, when I say no credit may be the best line of credit what I really mean to say is that by not using credit cards, it can be your best defense against getting yourself or your family into a financial jam.