My Credit Score Is Zero...

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Glocktogo

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We've hashed and rehashed this numerous times on this forum. As Neanderthal aptly described, having good credit provides opportunity and flexibility that not having credit doesn't.

The most effective way to build credit while not going into debt, is to get a Visa, MC or Discover from a reputable bank, preferably one with cash back or some other type of rewards. Use the cc for every purchase you can, but pay the entire balance at the end of each billing period. It's money you have to spend anyway and you're using their money while gaining rewards, without paying any interest or other charges. It also provides you with easy to read statements on your spending, to better track your spending habits and minimize overspending. CHenry's statistic of spending 18% more when using a cc, includes all the people who don't treat their cc as cash, don't pay their balances in full every cycle and don't manage their money wisely regardless of the form it takes. Just don't be part of that statistical pool and you're money ahead.

Another way to do it is to buy something on a long term contract that offers 0% interest and no finance charges. But don't buy it unless you actually have the money in the bank to pay for it. Case in point, we bought a ZTR mower on a 0% interest 4 year contract. We had the money to buy it outright, but why not tie up someone else's free money for four years? So we set the money aside in an interest bearing account and make the monthly payments out of that account. In the event we had some financial emergency, that money is still unencumbered and can be used until we replace it. Again, financial flexibility.

The key to smart money is to not cut corners and examine all the pros and cons before making a financial decision. It's also best to make financial decisions S L O W L Y. We never make large purchases on the spur of the moment. I just bought a new truck based largely on a rare opportunity to get one way below MSRP. But we'd already decided we would purchase one 6 months before buying. I just wasn't in a hurry and waiting saved us thousands.
 

zghorner

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The key to smart money is to not cut corners and examine all the pros and cons before making a financial decision. It's also best to make financial decisions S L O W L Y. We never make large purchases on the spur of the moment. I just bought a new truck based largely on a rare opportunity to get one way below MSRP. But we'd already decided we would purchase one 6 months before buying. I just wasn't in a hurry and waiting saved us thousands.

I have been actively looking for a new (to me) truck for over a year and a half...I too don't mind being patient to save some money.
 

zghorner

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The reason I would have preferred to have a good credit score is the ability to finance something vs paying cash. I have the cash to go buy the truck I want but do not like the idea of being out that much money instantly...if I can get 0% financing I would prefer to go that route.

Now, with that said I have decided to hold off on a new vehicle for now and focus on investing my money. If it is that hard for me to let go of the funds then I don't really want (damn sure don't need) a vehicle that expensive. Having good credit certainly couldn't hurt and should help any opportunities that arise.
 

SlugSlinger

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I have been actively looking for a new (to me) truck for over a year and a half...I too don't mind being patient to save some money.
So, how are you saving money in real terms?
You may be saving money from not paying interest, but it is costing more for a new model year truck, if that is what you’re plan to purchase is.
Looking at the time value of money, every year you wait to purchase, the more you will have to pay, or looking at it the other way, the less your dollar is worth.
 
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zghorner

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So, how are you saving money in real terms?
You may be saving money from not paying interest, but it is costing more for a new model year truck, if that is what you’re plan to purchase is.
Looking at the time value of money, every year you wait to purchase, the more you will have to pay, or looking at it the other way, the less your dollar is worth.

All true. But for now I will continue to save and use my money to acquire assets until I have enough to buy any truck I want without hesitation.
 

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