Homeowners

[pammy]

Do you still care about your credit report? This was interesting me because I was just listening to Dave Ramsey's show and he started it out with saying that he pulled his FICO and he didn't have a number. Well, what would he need to finance?? They told him his number is so low they couldn't measure it, so his score was 0. Imagine that for a minute.

So my question is, of those who already have bought a home, which they plan on living in a long time, should you care what your score is if your plan is to never borrow money again??

I posed this question to my sister a few weeks back. She truly could not grasp the concept. She's been spending oodles of time and some money getting her credit report cleaned up and in better shape. So I quipped that that is good and all if you want to be in debt from now on. She totally couldn't comprehend what it was I was talking about.

I mean, from my stand point, I'm going to be living in this house until I die, I won't need to be looking for a good score to get a better interest rate on a mortgage, right? And I've learned (and still paying for) the harships of borrowing by paying interest. I'm getting myself out of that now and plan on using cash from now on. Should it matter if the score good or not so good? I mean, what do I care if I can't get a good interest rate if I will not borrow money?

Not meaning to open a can of worms, just curious on the take from others on this issue. Is it backwards thinking or totally on target?

[Darlene]

No can of worms. I see what your saying but even though I own my house I may need to borrow money for a furnace or car or major dental. Just so many things that can happen and I as a last resort may need to borrow. That's why I still care.

[MandiDawn]

I guess at some point it don't matter, but some states go by your credit report when they charge you auto insurance. Also if you ever want to buy a new car it would matter, unless you pay with cash for the car. Also - we remodel our house, and I applied for the store CC to get a discount on supplies (kitchen = $5000, 10% discount for opening new CC account - priceless!!) then just pay it off and close it.
So while I can see how it might never matter, it's always better to be safe than sorry, and to have a good credit rating in case you ever need it. (kinda like an emergency fund - you might never use it, but you want to have it.)
I'm sure others will have more insight . . .

[FreesiaE]

Absolutley; what if we need to move? Or purchase a new car without all available cash? Or I wanted loans to go back to school one day? Or some major medical expense forced us to take out a loan? I just can't risk it.

[Telephus44]

I agree with FreesiaE - while I would certainly not PLAN on incurring anymore debt, there is always the chance that it could happen - and if you had a bad credit score, that would really count against your favor.

There are two other reasons I would continue to check my credit score and make sure that it was good: the first is that now it's used for a lot more than borrowing large sums of money. Mandidawn brought up that some places use it to determine your car insurance rate - some companies use it to evaluate you when you apply for a job - if you ever need to rent an apartment landlords check your credit score - and it just seems like in general more companies are using it than just banks and credit card companies. The second is for identity theft - I check my credit report once a year and if someone had stolen my identity and was opening credit cards in my name, I'd rather find out by checking my credit report than getting calls from collections agencies!

[SHOPGIRL]

Bleep Yes! In today's world, your FICO score is everything! House insurance, car insurance, renting an apartment...It's so important. The only reason I care about having a good FICO score is to get the best possible interest rate. Even if your house is paid off, I'd imagine you'd still want house insurance. Plus, in our state, we have to have car insurance. I wish I would have known years ago how important my FICO score was. Those three digits can cost and save you a lot of money.

[Emerald_Mommy]

I have to say we really don't care but we are certainly not going out of our way to "ruin" our credit score, either. The only thing we have ever financed is this house. We have an excellent interest rate (the lowest possible in this area for the term) So even with no car payments, no credit cards, nada, we're just fine, thanks Someday (when I grow up!) I want to be just like Dave Ramsey

[lilk]

I have to agree with the auto insurance, and job apps. The FICO does make a differnce. I plan on staying in my home forever. I just finished reading Dave Ramseys book Total Money Makeover. I highly recommend it!

[pammy]

Maybe I be thinking like Karen, I'm not out to ruin it, but don't see what use it is for me. And I shouldn't care too much if I don't have the best possible insurance rate when I'm only having to carry LIABILTY insurance instead of full coverage because there is a lien on it. And if all of my debts are paid, that'd mean I'd have a really big emergency fund set aside for those emergencies, right? Ememrgencies that I would have normally went to borrow money for. Heck, no payments at all, bet I could come up with a lot of money to stash away for emergencies. Or invest. I bet if something major come up then I could cash in some investment instead of borrowing to cover it. Wouldn't borrowing be backtracking??

Yeah, some day I wanna be like Dave.

[pkellyc]

I watch it more than ever. If my roof caves in or a disaster happens I have the buying power to fix it. Not to mention the fact that we do buy new cars and I know for a fact that when I buy one I know I will get the lowest possible rates when I do. Or anything else for that matter, including refinancing my home. A couple of years ago when I did refinance my home after reseaching the rates, I was able to name what terms I thought were reasonable at the time. I still get calls from companies to refinance I just love to tell them what I have and they can not touch it.

[juliek]

DH & I have been following Dave's plan for the past year. We no longer "worship at the altar of the FICO score."

We will never borrow money again, so the FICO score is irrelevant.

Even if we did need to borrow for a different house, a FICO score is not required. You just need to find the proper lender.

[FreesiaE]

I'd like to think I'd never have to borrow any money, but then I would be banking that no tragedy would befall me or my family. Even with my insurance, an extended hospital stay would be a serious financial burden, even with money in the bank I doubt we would have the cash for transplant cost (can be $100k), medications, and lost wages. The same goes for a serious natural disaster like Katrina in which both homes and livelihoods were lost. True, federal aid and insurance may come--eventually; but a short term loan could help to get the rebuilding or relocation process started faster. We don't have much family and I would feel terrible borrowing any large sum of money from anyone in my family. Life happens, and if having a high credit score helps me be the most prepared for emergency, then I want to make sure I have a score that allows me to benefit the most.

[juliek]

I can certainly understand that reasoning, but the only way to keep a high credit score is to constantly borrow money. DH & I are simply FINISHED borrowing, for our own financial good. (Been there, got the great score, almost buried ourselves in the process.) I'll take my chances on possibly having to pay an extra few percentage points in interest if some tragedy were to happen.

Which, again, is another reason to have a BIG emergency fund in cash. (We're not there yet, and I will feel MUCH better when we are.)