2373
I'm going to buy a House!
(file.coffee)
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I didn't have issues. Saved for about a year, nothing crazy, and asked for a loan. Now I own a nice two-story house about a 15 minute walk from the city center. I don't really get this "buying a home is impossible" -meme, I believed that too before I actually tried and was surprised how easy it was.
And you're what's called an outlier.
I applied for a loan. I was told I don't have a high enough credit score by the bank. So now I'm paying rent instead of a mortgage.
Imma be honest, I'm not from the US so I have only a superficial knowledge of what a credit score is, but I'd reckon that's something you can affect, no?
Affect, sure. In the same way that one can affect having rich parents who support you, thus making it easy to be rich yourself.
Being poor is fucking expensive, and the credit score system is a big part of that.
The credit score system is the yoke upon which the millennial/zennial generation has been shackled while Gen X and Boomers ride the wagon of home ownership and comfortable living due to not having to deal with that bullshit in the 70's, 80's, and 90's.
I was born in 1971. I can't speak for all of Gen X, but my experience growing up in the 80s is that I was presented with "everything's fine, you just need to get a job and it'll all work out." So that's what I did, and got nowhere fast. Married too early to the wrong person because pooling our resources seemed to be the only way out, then still struggled to get anywhere. Everything pointed to "I guess we're just not trying hard enough." Follow this with depression, divorce, working multiple jobs at a time to keep a roof over my head...
I think plenty of Gen X were just on the the earlier edge of the wave that became what it is today.
Idk if that's a passive or active you, but anyway that level of effect sounds quite large, maybe folk should find ways to make their credit rating better.
But I restate I have no clues as to the inner workings of this "credit rate" and if it's indeed impossible or otherwise unrealistic to effect, I'm willing to grab an implied L on that one.
You positively affect your credit rating over long periods of time by taking out loans and paying them back. If no one will loan you anything, you can't affect your score. If you can't pay the loans back, it damages your score.
What happens if you don't take loans at all before applying for a mortgage/house loan? You're just at like a N/A rating?
Then they just deny you for "lack of credit history".
That's just kind of nonsensical, isn't it better for someone to not have needed a loan before? To me that seems like the more mature creditor compared to someone who's pulling credit constantly, regardless how well they pay it back.
That indeed does seem to suck, apologies for having to deal with a system as shit as that sounds.
this is what i thought and did not use credit cards for years. i was only able to buy a car with a co-signer. since then, i pay for everything with credit and pay it off all the time to build a credit history. i will need another car at some point.
It just seems silly to "force" people to use credit just for that. Out here credit cards are only used for international payments, if even that. I mean I don't have a credit card and probably never will.
You have to take loans and make financially risky maneuvers to prove you can pay back the bank (which incidentally is covered by FDIC, unlike the average person).
if you never take loans or use credit cards, your score won't be very good. you have to prove that you can take on debt and repay it, not just that you can be responsible with your money (by, for example, never taking debt).
That sounds unfathomably stupid.
I mean if I'd have to choose between giving money to someone who's never before had to take a loan vs someone who lives from credit to credit, I'd choose the first guy any day.
It's not really stupid from their perspective. It's about risk analysis. Unknown is riskier than someone who has been proven to pay off their debts.
i mean, yeah. i agree. but those are rules of the game for plebs in the US. (i'm sure things are different for the super-rich.) you wanna rent an apartment or buy a new car? you have to show good credit or have someone with good credit co-sign any agreement/loan. you might do it on your own if you can show enough income (for rent) or can purchase a car outright (pay the total amount).
you can do these things with bad credit, but you will pay a higher interest rate or settle for something sketchy.
i can't speak to house-buying (looooool, add me to the list of americans in this thread who will never own a house), but i'm pretty sure it's the same.