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Author: Leviathan Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 310999  
Subject: Re: Credit card, using them to build credit Date: 12/9/1999 1:08 PM
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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.

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