[W]ell, the short answer to this is “yes.” Read some of the radical, debt-free articles and blog posts from those who advocate such a thing, and you would think that life without a credit score is the ideal choice.
On the other hand, debt-free doesn’t necessarily mean no credit score. And having a credit score can make life easier in many areas.
What You Can Do with Credit
Having a good credit score makes it easier to rent a car, find an apartment, or buy a car or house. It makes it easier to get a credit card. Having a positive credit report even makes it easier to find a job or get insurance. Sounds like you really need credit, doesn’t it?
What You Can Do without Credit
However, according to those that live the no-credit lifestyle, you can do all of those things without credit scores. You often have three options:
• Pay cash for purchases, including your home
• Get a co-signer with a good credit score
• Look for companies that do not require a score for approval
While this may be a good goal to have, the average person can only pay cash for small or medium size purchases if they are good savers. The other two options are better for large purchases if you do not have a credit score.
While many proponents of the no-credit lifestyle say that it is credit that gets people into trouble, this is not really the case. It is their lack of discipline. Avoiding credit doesn’t teach you how to use it responsibly; it only limits your ability to learn. It’s like saying that having money is a bad thing, but that’s only true if you spend it the wrong way.
The secret to enjoying life with good credit is learning how to be responsible and pay off your debts as they arise. Learn when to say “no” and when it is okay to say “yes.” Unless you plan to rent forever or wait until you are rich enough to pay cash for your home someday, credit is important to the average person.