Quote:
Originally Posted by wehateporn
A buddy of mine who had never been in debt before couldn't understand why the banks wouldn't give him a credit card, he thought he should have a better credit rating than someone who had been in debt for many years. He hadn't worked out that a person's credit rating is a gauge for the banks to see how likely it is they can profit from a person.
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That is true.
Years ago, before I had bought a house, I went to one of those mortgage brokers. My truck had been paid off a few years, I had no credit cards, only real credit line was a student loan. If I needed to use a credit card, I had my debit card. Otherwise, I paid for everything else cash. She told me, that I needed more credit lines, a minimum of two, and maybe up to 4 (no more than 10), before I really would be in an ideal position to apply for a mortgage.
I was shocked at the time. I would have thought someone with no debt would be a better candidate, but she said that simply is not true. They want a decent number of credit lines to show payment history over time. Essentially, you have to be in debt (to some degree) for the banks to give you serious considerations on some types of loans.
In hindsight, it makes some sense. But when you look at it on face value, kinda fucked.