You Don’t Need Credit
“You don’t need credit! “ This is an old wives tale that you might hear from anywhere from your church minister to your parents. Yes it was true thirty years ago that you could get away with paying cash for anything. It was a great way to stay out of debt.
However in today’s society if you insist on paying cash for everything and living on a cash-only basis you will absolutely fail to impress a lender. A credit-free life does not imply wisdom with money but rather an inability to handle credit. In other words you don’t have to live in debt to get a decent store but you really do need to uses credit.
In the past some people were able to get high credit scores without having too much credit. However that has changed. You don’t have to use your credit frequently but it is essential to have some kind of credit history because insurerers and using credit information for underwriting and rating decisions. Your failure to maintain a credit history could cost you in the form of higher premiums.
It seems a shame that people who don’t like credit cards should be punished with higher premiums but that is the way it is/ However even as this guide is being written some states are thinking of prohibiting insurance companies from using a lack of credit history as a reason to raise rates for those who don’t possess a traditional credit history.