Can someone explain what exactly Good Credit is?
I live in a family where my parents live well, newest model cars, very nice neighborhood, newest phones etc. They also make a combined income of ~$200,000/year. My parents are FIRM believers of keeping credit and having good credit. They both have an 800+ credit score and have never missed payments. They raised me to always pay off my balance in full every month, and at the very minimum pay off the statement to not accumulate interest. They had me lease a new car when my car broke down, and due to their cosign I only have a 2% interest rate. My parents said to stay under 30% of your credit limit at all time. Only buy what you can afford already. Due to them, I gained a 788 score in only a year or so with 1 car lease and 2 credit cards.
With that being said.
My girlfriends father, who makes roughly the same or a little more than my parents say "No debt is good debt." He believes in paying everything in full. Want a $40,000 car? He will save up $42,000 and buy the car in full. He believes in buying a house vs a mortgage. He says credit is for fools and that you should never pay anything over time and you should buy everything in cash. So he has 1 credit card that he hasn't used. He lives the same life style as my parents. He's more frugal with his money though. He'd rather drive a 2001 car with 230,000 miles for $2,000 that will last a year or two, then buy another one, than to buy a 2014 car with 30,000 miles for $10,000 that may last a good 10+ years.
What is good debt? Is it a thing? Why would people rather avoid it or flat out claim that building your credit is a fools game? Doesn't seem like either is any better than the other. But some people, even on here, have said "Don't buy a credit card." "Never lease a vehicle" "Only buy a house in full." I can't imagine saving up $320,000 for a house.
Submitted April 11, 2019 at 10:59AM by Pinanims http://bit.ly/2P72hsj
