Have you ever stopped to consider what life could look like if your major life decisions (and purchases) didn’t revolve around your credit score? This article looks at how you can get through life without ever needing credit – successfully.
Buying a Home
Don’t have a credit score? Good. Despite what everyone says, you don’t need one to buy a house! And if you’ve never gone into debt, that shouldn’t be too difficult, right?
Now it’s time to focus on one thing: making sure you have a large down payment to buy your next home. Without a credit score, your down payment is a big factor (along with your job and how long you’ve been employed in that line of work). You’ll also want an outstanding history of rental and utility payments. Look for a mortgage company that uses a process called “manual underwriting,” sometimes called “nontraditional credit” or “no credit score” lending.
If you’re just starting your home-buying journey, be patient. Rent for a while if you need to and save up even more to put into a down payment. And whatever you do, don’t buy a house until you’re ready. That means you’re completely out of debt, you have 3–6 months of expenses saved in an emergency fund, and you have a good down payment. Of course, if you really want to, you could always just pay straight cash for a house!
Renting an Apartment
Most apartments will work with you if you can provide first and last month’s rent, proof of being a good renter (such as previous on-time utility payments), and a security deposit. Be sure to ask them upfront about their process and what type of information they’ll need to get started.
If they want a credit score and you don’t have one, simply tell them that you don’t have debt and you use cash. Get a rental history referral from your previous landlord. If it’s your first time renting, you might have to look around for a little bit. But don’t worry, you’ll be able to find someone to work with you.
Applying for a Job
This is a recent trend, but it mainly affects people in the financial industry—banks, mortgage brokers, investment companies and so on. Again, the key here is to learn the company’s hiring process upfront so you can explain why you don’t have a credit score if they ask you about it.
Remember, these answers only apply if you have no credit score. If you have a bad credit score because of any outstanding debts, that’s a different situation entirely. It’s time to focus on cleaning up those old debts with the debt snowball method and start fresh!
The naysayers out there want you to believe you can’t travel without a credit card. But that’s just not true! Your debit card (and cold, hard cash) works better than a credit card. When you use your debit card, you’re using money that you own and have worked hard for instead of borrowing on interest!
If you’re looking into renting a room at a hotel, call ahead and let them know you’ll be using your debit card. Then, make sure to budget for the possible security hold they’ll put on your card for the duration of your trip.
You can also rent a car using your debit card. Companies have made it easier on people like you who live without a credit card! Like we said earlier, just call ahead and ask about any holds they might place on your debit card and budget for your trip accordingly.
Are you ready to break up with your credit score yet? Learn how to dump debt, save for emergencies, and build a solid financial future—plus get all the tools you need to make it happen. How? Our blog is full of all the information you need.