Mortgages, Credit and Financial Responsibility

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There are a lot of valid reasons for avoiding credit. However, there are also some reasons you should have credit.

Many mortgage companies are now requiring 3 open lines of credit along with a good down payment and a 750 plus credit score in order to qualify for a new mortgage to purchase a home. And with the mortgage crisis that is going on and the millions of foreclosures out there, this practice is just prolonging the agony of the bad market.

If there is a glut of inventory, which there is, and it is exceptionally difficult to qualify for a mortgage to purchase a home, how can the housing market get better?

And if you are an owner, who needs to move, but is likely upside down in your mortgage, meaning that you owe more than you could ever possibly sell the house for in the near future (remember, mortgages are hard to come by and there are probably hundreds of homes out there competing with yours) what do you do? Corporations in the same situation walk. Some people are starting to walk away, which of course, makes the market even worse. But what is the answer if you must move for whatever reason?

So if you want to buy a house with a mortgage in the future, you may need credit, good credit. And if you have had any difficulties in the past you may need to complete some credit repair.

So get a prepaid credit card. Use it regularly and pay it off. Then use it regularly and pay it off. And slowly expand, get a few more lines of credit, be careful of the type, however, as department store credit is not given as much value as a credit card or an automobile loan, but most importantly of all, pay all of your bills on time, do not charge more than 20% or so of your total credit limit, don’t shop for credit and get financially responsible.

If being financially responsible means avoiding credit, then avoid what you can but do what you have to do to get your house.

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