Reply to Anyone else not have any credit cards & why does it hurt my FICO score?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote]Shouldn't I have already demonstrated how good with credit I am in that I don't actually need any and that I paid off my student loan in 5 years and will pay off my mortgage 20 years early? [/quote]

Ah, the old "you should want my business because I don't need your business" approach.

A lot of people think FICO scores are really crazy, but they make a good amount of sense. The best evidence lenders have of your ability to pay on time is how often you pay on time. If you don't have any revolving accounts, you don't have much evidence you pay on time. And while the idea that paying off student loans very early is bad for your credit seems counter-intuitive for a second, the same logic applies: The earlier you pay it off, the fewer monthly payments you've paid on time, and the less data they'll have.

It doesn't sound like you actually need to increase your credit score since you intend to never use it. But if you really want to increase it and you consider interest quasi-immoral, simply take out a credit card, set it up for auto-pay, and buy a few things a month on it. Then once or twice a year, request a credit limit increase. You don't need to feel immoral because you will literally never incur an interest charge, but after a few years your score will be way up.[/quote]
OP here. I was always taught that the only time you cannot get credit is when you need it most. Maybe that was wrong advice from my mother.

In any event, I am not sure that I want to pay annual fees to use a credit card just to demonstrate that I am a good credit risk. I would assume that my bank balance and nearly paid off house would probably demonstrate that enough, but these FICO doesn't seem to take assets into consideration.

In the end, you are right that I probably don't need to worry about it too much. It is just that I have been considering investment options and thinking about purchasing an investment property. Since we are paying off our primary residence soon, it seems like a good way to keep the mortgage interest deduction which is very useful for us because DH is a consultant and has to pay self-employment tax which is very costly.

Will increasing my FICO score above 800 result in a lower mortgage interest rate?[/quote]

I pay my credit card off every month- so I pay no interest.  I have a credit card that has no annual fee.  I use it instead of carrying tons of cash around.  I use it as a cashflow tool.  I love that I can download my purchases directly into Quicken, saving me time on input.  If a local place will accept a personal check, I will write a personal check so that they do not have to pay the credit card fees.  
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