No credit. No score. Still bought house. There are ways around the system. Same for my cars usually. Buy them at auction. Ditto for phones. You don’t need that new $1200 iPhone. A used one for $250 cash and holding onto it for 6 years is much better.
Yes, having money available so you don’t need credit bypasses the whole system. Have fun buying a house.
Bought first home in early 2000s, sold that one and bought another since then. There is no way I would have been able to save up enough to pay cash during that time.
What the fuck kind of wankjob is upvoting this boomer-tier “Just don’t buy Starbucks” horseshit?
“Just pay cash for everything on your $25k a year! You can totally buy a house if you save for the next two decades!”
Fuck off.
I make less than $25k/yr, lol - I learned to fix my own beater cars. Bought a 3/2 during the 2008 crash for $30k because it was almost gonna be condemned, and was a by-owner sale - I only needed like 8k down, and then worked on fixing it up myself. It was barely livable when I bought it.
And your dumb ass thinks that buying a house right now is possible on less than $100k a year. Yeah, you’re a fucking moron.
I will reiterate my fuck off.
So all people need to do is wait 15+ years until a depression-level market crash. Got it.
Hahahahahaha, “no credit, still bought a house”, ok mr my uncle left me gold bars in his will, the leprechauns showed me the end of the rainbow, hahahahahaha
It’s incredibly expensive being poor, lots of people are poor, there are of course ways to be poor, and without good credit, but everything costs three to four times as much in the end, if you don’t have cash on hand.
The Sam Vimes “Boots” theory of socioeconomic unfairness by Terry Pratchett’s Ringworld comes to mind: https://en.wikipedia.org/wiki/Boots_theory
Can it be done without a credit score, sure, is it incredibly difficult and in the end more costly, almost always
Been poor my whole life. Guarantee 99% of people on here make far more than I do. I can’t work as much as others due to health issues, and I still managed it though cunning, sacrifice, and good timing.
You’re pretty massively understating how much timing played a role in your specific case.
Got my house through Habitat for Humanity. (And that’s not a free house program. Ask me if you want to know more.)
I was fortunate, but there was some motivation involved.
A lot of people think social credit scores are something society can’t function without, but they only started in 1989.
At one time you walked into a bank, showed how much money you made, and got a home loan.
But that allowed too many Black people to buy homes, so credit scores were invented as a way to discriminate against people using a black box with no real published metric.
Yay for redlining under a different name!
It’s funny how the other person who replied to me said credit scores are actually the solution to racism. I think you’re the one who’s right it’s just funny. I’d like to take this opportunity to say it’s retarded that you can pay rent for years but not be approved for a mortgage with equal or lesser payments.
Nobody said credit scores were the solution. They were merely a step forward.
Young liberals: “It’s not good enough or fast enough! NOW!!!”
I’ll take what I can get, even if it takes some time.
Nobody fucking cares how many black people buy houses. They only care about making the most profit.
You’re showing way too much faith in the institutions that invented the red lining in the first place to imply that the ol’ boys club system wasn’t waaaaay more rife with systemic racism.
The post war recovery laws were literally lobbied to specifically exclude black folks, but sure, home buying was easier for them then than it was post credit scores.
My dude, you’re missing about thirty years of history.
Redlining was made illegal by the Fair Housing Act in the late 60’s. It may have still existed in some fucked up form but it was no longer the standard by which lending was done. There’s a reason the rate of home ownership among Black people has steadily risen ever since, and yet it still isn’t close to any other group of people.
The whole system is fucked and it’s largely set up to fuck Black people because some mayo motherfuckers still want to own humans.
I certainly have problems with the way current financial institutions operate, but prior to the credit score there wasn’t a standardized, scientific way to assess lending risk. It was left to a good ol’ boy process rife with racism, classism, and sexism. Sadly, we’re better off with what we have now, as flawed as it is.
There still isn’t a standardized and scientific way to assess credit risk. There are three major companies, several minor ones, and all of them offer multiple products.
IT’S ALL A FUCKING SCAM. We just blindly accept random institutions compiling all of our data and telling a bank whether or not we should be given a loan regardless of our ability to pay it back. It has little to do with income anymore, which should be the only allowable metric. Don’t want the risk? Get the fuck out of the mortgage business.
What about those that have sufficient income, but don’t pay their bills and have defaulted on previous loans?
It was so much better before! When being a woman, or god forbid, being black, counted as serious criteria. Oh, and you best be friends with the banker. (Read the part, again, about being a white man, who was well accepted in the community.)
It’s not a scam, it’s a step forward. Time to take the next step.
which should be the only allowable metric.
Why? Income is a terrible metric. Regardless of how much money I’ve made, I’ve always spent within my means. I’ve never carried debt, but always has my cc to build the credit score.
The idea that some bozo who spends more than he earns has a better credit score than me just because he makes more money makes absolutely zero sense to me.
If it was a publicly available algorithim, then Id believe you. But it ain’t, so I’m suspicious.
there wasn’t a standardized, scientific way to assess lending risk.
Neither is it now. You forgot the ‘hidden from public’ part.
If you don’t take credit facilities but pay for your expenses in cash, you are considered a risk. Credit scoring based on credit card purchases is akin to being required to be spied on every step of the way just so you can access what you practically can without the credit in the first place. I don’t have a problem with people who are fine with that kind of behavior. But there should be a way of fair assessment even if you pay in cash.
Why would you be better off? In the rest of the world you just have to provide proof of income and proof of savings and debt and banks can calculate how much they are willing to loan you for the purchase of a house. Seems to work fine, and I don’t have to have pay interest on meaningless loans just to prove that I can.
The problem is that just having the income and savings doesn’t necessarily guarantee that you’ll be as good about paying back a loan as someone of your same income and savings.
That’s supposed to be where the credit score helps, but the current system is so shady that it basically just reads as the ol’ boys club system but asking pretty please to pretend there’s a formula and method being used.
tell me you’re ignoring how the adult personal financial world works in the west since 1989, without you, know telling me
Doesn’t the Chinese system also limit access to social services in addition to loans?
So basically you don’t know how the Chinese system works but the American system is worse? Because America == bad? Nice in-depth analysis.
Yes, the Chinese social credit system is a government created thing that’s more a way to punish people who don’t do what the government wants.
The American one looks dystopian at first glance, but it’s privately created by and for lenders so they all have a shared understanding of the optimal amount and rates to lend to someone. If you or I sit down and make a spreadsheet ranking houses we might buy or quality of restaurants near us, and then give them to a friend so they don’t have to create their own from scratch, we’re doing something not that far off from what credit scorers are doing.
For 25 years I’ve only carried a debt on my credit card one time, and that was for a few months under special circumstances. I have a top credit score.
It’s a stupid game, but it’s easy to play.
Why do Americans think you need to carry a debt to build credit? That is the opposite.
I put EVERYTHING on credit card, and pay everything off on time. Never missed a payment. My credit score was the highest it can be by the time I turned 21. I’ve never paid a penny in fees or interest.
Holy hell they sure do. A lot of Americans don’t even understand you don’t immediately start accruing interest. You clearly have not witnessed the absolute insanity of Americans saying that they use a debit card because they “don’t want to pay interest” or they “only spend money they have”.
Also the comment you’re replying to was likely in agreement with the premise established by the person they were replying to.
I arrived to the US less than 5 years ago and I have top credit score. I never carry a balance, open credit cards that offer a lot of credit, benefits and bonus to increase my available credit (I have about 6 or 7 cards at the moment) and just wait. In less than a year I already had 740 which was enough to get a car loan with 1.9% apr (lowest offered was 1.85%)
I understand what survivorship bias is, I just don’t see how it applies here. Could you explain?
That just because you managed to do that doesn’t make it the norm.
You could argue that that simply isn’t an option for many people. If you can live life without using a credit card implies you have not struggled for that extra cash, whereas some people simply don’t make enough to not use it.
Care to elaborate on why not?
Just so I know. I’m not saying you’re wrong.