Remember Catch-22 and that ?damned if you do, damned if you don’t? mentality? Well that is exactly how credit works these days.
If you are responsible, pay off all your debts on time and live a relatively debt-free, all cash life, you can be penalized by mortgage companies when you want to purchase a home. or penalized by credit card companies if you want to get a credit card. This happens even if you are financially responsible and living completely within your means.
Side note: If you are looking to increase your credit score, you can start off by?checking your free credit score through Credit Sesame. They provide free credit scores so that you can see what areas you should be working on. Yes, it is actually free!
Mortgage companies like to see at least 3 open lines of credit to make sure that you are credit-worthy.
So if you would like to live a relatively debt-free life and the only reason you want to get a mortgage at all is because you didn’t have the large pile of money that it would cost you to buy a house just sitting around in your bank account waiting for you to find the perfect home, you may be in for a big shocker. You can be penalized for having too little credit as much (or maybe even more) than for having too much credit or too poor credit.
Yes, it’s a Catch-22, you’re ?damned if you do and you’re damned if you don’t.?
Have you ever experienced this?
Image via Flickr by soundfromwayout