It's fiscally responsible, yet it may not be practical in purchasing something like a home. If you don't have a good credit rating, you can't get a home mortgage. Current credit ideals leave a lot to be desired, but they also leave the end user in a catch 22. If they pay outright for everything they purchase and then need credit for something - they likely would be refused, because they have no history to prove their trustworthiness in repayment.

But that would put tons of people out of a job! LOL...I agree. Cash only is the best way. Unfortunately it's not the way most go.

And because they know this - they aren't too afraid of those of us pounding the drum of fiscal responsibility. There's a whole lot more money invested in breeding a feeling of discontent through advertising - and there's always someone willing to pay money they don't have for things they don't really need using credit they shouldn't have.

I like that, and it is sooooo true.

If people just set aside a "house payment" each month in an interest bareing account then they would be able to buy a house before they new it. Then if they started small and only traded up as the money would allow . . .

How I wish someone had taught us all this when my husband and I were starting out.

The trouble is, it's not always easy to save for what you need.

When we moved up to Scotland, we found there was no way we could keep driving around in the existing car, as the kiddie car seats made everything much too cramped, so we looked to buy an MPV.

As I know nothing about cars, I had no idea as to how to tell if a second hand car was a good purchase or not, and frankly I was frightened by the risk - especially after nearly signing for one by a reputable dealerships that despite being 2 years old had more rust under the chasis than our ten year old motor. So we figured on a brand new MPV but we certainly couldn't save £18k quickly, but even then, I did put £5k in cash to make the loan smaller and more manageable.

Also - as I'm looking for my first mortgage soon, I figured a loan was a good way to help with increasing my credit rating, just in case of help when applying for a mortgage.

If we could only save before we needed the money then what a wonderful world this would be. I know if (and the key here is if) my husband and I had been saving BEFORE we had kids and while we were both working instead of spending money like it was going to spoil then we wouldn't have to worry to day. See, I told you "if" was the key.

So true, My brother needed a co-signer on his house and he was horribly embarrassed since he had a excellent history of paying debts but no real credit trail.

I agree, it would be great if we could pay for purchases with cash. But the credit card companies, and loan companies would never allow this to happen. I read an article recently about how much personal debt has exploded since the credit card came on the market.

It is scary how valuable a credit rating is. I worked in a high-end car dealer several years back, and I was continually stunned by the people who had high credit ratings but not the highest incomes still qualifying and buying cars they could not really afford.

Sure they worked hard to get that credit rating, but then they blow it all on a car they can't afford and in two years their credit will be ruined.

I think I figured out the value of a great credit (I mean near perfect) rating. You qualify for all the no interest promotions that most companies have. Then it is to your benefit to buy on credit (if you have the money in the bank to pay it off later) and let your money stay in the bank and earn interest. Make sure if you do this that there is no prepayment penalties.

Hi,

I'm an MT and currently working on a scoring model which help me find efficient credit limits for my company. I wonder what important criteria (e.g operational activity years, # of employees, financial ratios, market reputation of the customer) should be when you decide a good scoring model. Could you give me some spesific criteria in details?

Thanks,
Varkal