No. of Recommendations: 1
I agree with you in principle. It is best to rely on your own cash, rather than credit. However, do you not agree that credit is important for major purchases, such as a house, or car.?

I realize that some may be able to save enough for the car, but a house is another matter. Not many of us can save $100,000 or more to plunk down on a home. It would take too long to be feasable.

Well, johnmoni and I agree on a cash-only diet but he beat me to the punch in responding to your question. In response to this, I would say that if you are having to borrow to buy a car then you are probably buying more car than you need. One of the biggest mistakes people can make is to borrow to buy a new car. Within a millisecond of driving the car off the lot they will owe more than it's worth. Even if the car isn't new it's not a good idea to borrow to buy a car.

As for buying a house I will concede that's it's very, very difficult (but not impossible) to save up enough cash to buy a house outright so you will probably need to borrow at some point. However, instead of buying something to make payments on to "establish credit", you'll be just as creditworthy if you have a steady job, a large down payment, and no debt. You probably won't be if all the lender looks at is you credit score. Put yourself on the other side of the desk, though. If someone comes in to get a loan from you and they show you a steady job, no debt, and a 25% down payment, I would imagine that you would be able to loan this person money. You just have to get them to look past the score.

Print the post  


UGC Disclosure Notice Regarding Credit Card Posts
Community board discussions about credit cards are not provided or commissioned by banks who may have advertising relationships with The Motley Fool. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.
TMF Credit Center
The Motley Fool Credit Center arms you with real tools and simple messages, that will help you in every credit situation.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.