After reading Max’ed Out (amazon link) (review of this book coming in a while), I have come to the conclusion that I really don’t care about my “credit rating” any more. I have far too much credit as it stands, and from what I can tell what I think SHOULD make my credit rating better doesn’t actually help it.
Bad Credit Rating
At this point in my life if I had a bad credit rating (let’s assume I go completely insane, go to Vegas max out all my credit cards, put it on “Green” in Roulette and lose), what would that mean?
- No one would give me a credit card? Not necessarily the case, since they are already sending credit card applications to my kids who have no credit rating, but let’s just say this is the case, I cannot get any more credit cards. To me that is a good thing, I have far too many credit cards as it stands, if anything I should be destroying the ones I have.
- I won’t be able to get any more credit at my local bank. I don’t need it, and if anything I should collapse my existing credit vehicles.
- The Bank may foreclose on my existing credit vehicles. Not likely again is my response, if that is my current only debt, and I am making payments on it, the bank won’t do that (is my guess).
Admittedly this is a bit of a synthetic case, since everything I have done in my life financially has built up a good credit rating, so most of these points are conjecture on my part.
Good Credit Rating
What does a good credit rating do for me?
- It will allow me to get more credit. Don’t need it, and shouldn’t get any more (I wish I could put that on my credit report).
- Keep me healthy? Nope, sorry, the only remote way it might help is if I need to buy a massive home gym at Home Fitness Jock House and they will then allow me to open a credit account with them, but that is a big stretch (and I had better stretch before using it as well).
- Will cause my wife to love me more? I could get a credit card at a Furriers and buy her a mink coat, but if that causes her to love me more, I think I don’t know who I am married to.
- My kids will be more respectful and clean up their rooms? I am not touching that one.
A good credit rating for me right now is much like my appendix, it’s there, it doesn’t do anything for me, but it can cause some serious nastiness should it all go wrong.
I should go out and trash my credit rating? No, the only way to do that would inflict financial hardship on me and I wouldn’t have only a screwed up credit rating, I’d most likely have a ton of debt too (and screwed up my home life and such too).
The obtuse point I am trying to make is that the Credit Rating concept is an odd one, if you have a good one, you shouldn’t have credit (yet you most likely have it, and can get more), and if you have a good credit rating, unless you are about to buy a house, it just means you can get 100 more credit cards really easily.
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I suppose so, but going to a different bank and asking for a better rate, might work better too!
It is a different situation if you are a young person looking at getting a first mortgage (my situation). In general, good credit puts you in a position to negotiate a lower mortgage rate.
What about when your mortgage comes up for renewal? Wouldn’t having a sparkling credit history give you a better position in negotiations?
Hmmmmmm, fur coat eh? Bling is good too!!!!
ha ha ha