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

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[quote=Anonymous][quote=Anonymous]I haven't owned a credit card in over 8 years. Not because I have a problem spending or went through a bankruptcy, but because I don't like them and I sort of generally feel that paying interest is somewhat immoral. If I cannot afford something I just don't buy it and when I do want something I save up for it. DH and I wanted a new car, so we saved specifically for that and got one cash. [/quote]

That's silly. Who said you had to pay interest to use a credit card? You don't pay interest if you pay off the balance every month. Credit cards to those with good financial sense isn't about borrowing money, but about convenience. I typically don't like carrying cash because cash gets lost, I have to remember how much I have, and it makes my wallet thicker than I like it. Not only do I not pay interest, but I get *paid* for using my credit card. At a minimum I get 2% cash back on all my credit card purchase. Gas and Amazon.com purchases gets me more. When it comes to buying cars, some times a manufacturer will offer additional incentives if you finance the car. In those cases, I will absolutely take the financing and pay it off after about a month.

[quote=Anonymous]
I thought this was normal until I was curious about my FICO score the other day so I signed up for a free monitoring service through my bank. I thought I always had great credit, only debt I have is a mortgage, paid my student loans early, but my FICO score was not exceptional. Instead, Experian advised that if I wanted to increase my FICO score 10 points (which would get me over 800), it was recommend to take out multiple credit cards or other revolving loan accounts and pay it off regularly. I am sure there is some logic behind this, but it just doesn't make sense to me. 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?

Anyone else in this situation? What gives?[/quote]

Your logic is like saying that a student has demonstrated he is good at math by not even needing to do any homework. To demonstrate that you are credit worthy, you have to use credit and repay as agreed. Your lack of credit utilization represents a chunk of missing information for lenders. Missing information represents risk. Risk decreases your credit scores.

Having said all that, 790 is pretty good credit score already. I don't understand why you want to go over 800 if you don't intend on using credit. [/quote]

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