You’ll be rejected from a lot of things on the basis of having no credit, because in the U.S., it is considered worse if you have always paid everything up front and on time than if you consistently borrow and make continual payments. Now, that doesn’t have to be a credit card per say, it can be car lease payments, student loan payments, medical debt payments, my landlord reports my rent payments, but credit cards are one of the easiest ways to build up your credit score before you say, have to spend an extra $1500 upfront for an apartment on a co-signor service because my credit score wasn’t considered high enough for an apartment I pay $500 a month for.
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uranibaba@lemmy.world 7 months agoThat seems crazy to me. I understand that what you are saying is reality, but is it really that difficult to get by in US without ever owning a credit card?
djsoren19@yiffit.net 7 months ago
IamtheMorgz@lemmy.world 7 months ago
Also, your credit cards are a different kind of “loan” - revolving - vs those other debts, which are installment. Having a mix of the two will improve your credit. They literally want it to be impossible to have good credit without the cards.
basxto@discuss.tchncs.de 7 months ago
Do you have no rental bonds? It’s quite common here to have a rental bond up to three times the monthly rent, but you get that back at the end if there are no disputes about damages or payment default.
djsoren19@yiffit.net 7 months ago
There doesn’t seem to be anything offered by the rental company I’m currently with, and I’ve never heard of concept before. There are security deposits, which you do typically receive at the end of the lease, but most of the ones here are non-refundable, and I did have to pay one of those as well.
basxto@discuss.tchncs.de 7 months ago
security deposits
That’s the word I was actually looking for. But reading a bit about security deposits and non-refundable deposits, they are two very different things. The first is a security like the name implies and credit scores have a similar purpose, they want to be sure that you are able pay. Non-refundable deposits are essentially just fees that are paid even when you back out of the rental contract and don’t move in.
elrik@lemmy.world 7 months ago
Yes. Effectively you will not have any credit history, so you simply won’t qualify for lower interest credit products or will be rejected on applications that have a credit score threshold.
IamtheMorgz@lemmy.world 7 months ago
The first time I wanted to finance a car I discovered I have what’s called a “thin file.” My (interest free) student loan wasn’t reporting to all 3 agencies. I was able to get my dad to co-sign. I was 26. Discovered then that being told “never ever ever own a credit card” (by my dad!) was very bad advice. Get one with a low limit and use it to pay the same bill every month. Credit! Now other places trust that you pay your bills.
I’ve since gotten several cards (it’s been nearly a decade) and they each serve a different specific purpose. I purposely target high signing bonuses and my purchases are better protected. My limits are stupid high, which I guess is nice but I’ll never put that much on so it’s a bit pointless. Then again, knowing I have access to that if things ever become dire is nice.
acetanilide@lemmy.world 7 months ago
Yes. Adding to the other comment, if you don’t have good credit you can also lose out on certain job opportunities.