The value of the credit score is in the eye of the beholder. Most Americans rely on their good scores when they apply for a mortgage, car, or other type of loan. However, the minority of those who do not see value in good credit may be growing.
It seems more people are converting to a cash-only lifestyle that many of us can only dream of having.
Credit scores can be as low as 300 and range to a shiny 850. To get the best mortgage interest rates, the FICO score must be about 750 or higher. Some people could care less whether their scores or 400 or 800 because they never rely on them.
They use debit cards to pay for airline flights and purchase cars, homes, and other items with cash.
Those who are not so financially fortunate must play by the credit rules established by lenders. Others walk away from a mortgage even though they can pay it, simply because they are upside down on the loan.
Credit reporting agencies are creating models that will help banks identify these borrowers because not even the threat of bad credit has deterred these individuals.
Thousands of consumers look for ways to increase their credit scores. They are tired of relying on high-priced payday loans for financing. At the same time, others pay little attention to the credit reporting system.
They know that even bad credit can be repaired in five to seven years, making good credit rather overrated.
The value of having good credit is the savings received from lower interest rates. This savings applies only to a fixed period because even the worst credit scores can be repaired in several years.
Americans buy into the promoted belief that bankruptcy is far worse for credit scores than is heavy debt leverage, which may not always be the case.
