Women and credit and debt

[jeanontheroad]

I posted this on another thread and it was suggested that I post it here, too. Ok. That sounds good.

Women, don't assume that you can get credit when you need it just because you have consigned with your husband for houses and cars or because you are on your husband's credit cards. For 25 years, that's how we did it up north. Then, when he was disabled, we moved down south. I got a job and wanted to start a part time bookkeeping and tax business on the side. I couldn't even get a $300 credit account at Office Depot. The credit agencies had no idea who I was.

We solved that by buying the car we needed in my name with DH as the cosigner. Even with explicit instructions, the salesman brought the paperwork to us with DH listed first. He was openly annoyed when he was told to take the paperwork back and do it right if he wanted to sell that car. I was the one with the job, but DH was the one with the good credit score. He wanted to make his job easier regardless of what we wanted.

There are supposed to be laws in effect that change that situation, now, but I have not noticed this when I look at my credit report. Since everything we have is paid for, the only active credit we have is our cards. Even if you go all cash, you probably have a bank account. Get a card with your bank and make occasional purchases with it. You can pay it with a bank transfer online. You never know when an unexpected emergency may come up. Without a good credit score and credit history in your name, you may have to pay a much higher rate to get the money you need. Maybe you won't be able to get it at all.

 

[Theadyn]

To add to that (and totally agree with what you said), I had pretty good credit built. When my husband passed, my credit score dropped 100 points automatically. This was checking my free reports (annualcreditreport.com) and obtaining a score (can get it free now with CreditKarma.com) and calling and asking questions. Totally was not earned on my credit history, but it happened none the less. Thankfully, I was pretty high up there already (almost 800 score before his passing), so was still able to keep a decent score. I have since applied for a credit card (which I HATE!!) for occasional use just to keep decent credit history. Got to do something since I don't have debt of any kind. Can't live with damn credit, can't live without it it seems. Grrr..

 

[jeanontheroad]

I am sorry about your loss. It does seem like the banks added insult to injury. Having spent a couple decades in the insurance and financial industries, it does not surprise me at all.

 

[compassrose]

We have "insufficent information" for our credit rating! I think it's funny. It seems because we have paid cash for everything for the last 20+ years (last house was a privately held loan and never reported) PLUS our address had changed "too many" times as well. Here is the deal. We pay cash for everything or we do without. We have $0 in debt. We have no credit cards. We have no "payments" on anything. I have a debit card only as my paycheck is direct deposited. I don't actually have a checking account (WalMart Moneycard plus I have a PayPal business account). When we start a micro business we do it on what I call a broken shoestring. We NEVER have taken out a loan to open a business. We alway do it from savings and hold down another job until our own business is able to support us. Contrary to what people have always told us (the same people who told us that we "needed" to own a house), I have affordable auto insurance. If something happened to my daily driver, I would just buy another used vehicle for cash. I will cash in my stock to buy a piece of land next fall. Cash payment. I always say, we don't have much but what we have is ours and ours alone.

 

[Queen]

We have stellar credit and zero debt, but every once in a while we'll use a low interest credit card to pay for something, then pay it off over a few months. It's annoying but it seems to keep our credit scores in the 820 range.

 

[coolmom42]

My sister was in the same boat about 20 years ago. She fixed it by getting a store credit card in her name, then a Visa for general use. She got a small home improvement loan from a local bank in her name only, then paid it off in about 4 months. Then she got a car in her name and paid it off in about 3 months. She keeps the credit cards open and uses thme occasionally. She could have paid cash for all of the above, but chose to build her own credit just in case, since her hubby is not in good health.

 

[Queen]

It just stinks how lenders hold us hostage by our credit scores, and yet it visits us money to get and maintain one. Seems like a pretty good scam for them.

 

[jeanontheroad]

Your credit score is determined by your payment history, the length of that history, the amount you owe, the type of credit you have used and how new or old that credit is. The main thing is to establish some kind of credit and keep your bills paid before you want to buy a new car or have an emergency and need money. Lenders want some evidence that you are reliable. If you wait until you really need the credit rating, you will be paying a much higher rate of interest to compensate the lender for the additional perceived risk - if you can get a loan at all.

It may seem unfair to penalize someone who has handled their money well enough not to need credit so far, but that's reality. Especially if you are living simply and have few or no assets that would make it worth a lender's cost to repossess and that would be easy for the lender to sell, you want to understand that reality and it's consequences.