Quote:
|
Originally Posted by DTLB58
Good FICO score = Debt! Who needs it.
Your credit FICO score ranges from 300-850 it is based on your payment history 35%, How much you owe 30% The length of your credit history 15% The type of credit you use 10% and applying for new credit 10% is based on that.
Instead of working on your credit sscore till you need a car loan, why don't you save up and pay cash for the car instead?
The average car payment in America is $378 over 63 months (source: USA Today) If instead you pay cash for your vehicles and slowly move up in car over time you will be far ahead of the finacial game and have a lot more money than your broke friends who tie up their money paying payments most of their adult life.
Remember, "The borrower is slave to the lender" Go here www.daveramsey.com to change your financial future. |
In theory I agree with you. The reality is, I'll need a new car next summer. It doesnt have to be "new" as in 2006 model, but I need something very reliable and decent. I dont know if I'll be able to have $6,000+ banked by June. To make up for that, I plan on having a short-term loan of only 2-3 years. Taking out a 5-10 year loan for a car so that you can have small payments is stupid. I dont give a rat's ass what the payments are (within reason), as long as the interest is low and the duration of the payments are short, I care more about the dollars paid out at the end of the loan. All the extra interest you pay for 2-3 more years is money not invested or spent elsewhere. I'll seriously think about investing some extra money each month after this summer for the next 4-5 years to pay cash for the next car, though.
In other topics we are probably not far apart. I put away about $200/month (50% matched, so really $300/month) in an extremely diversified 401k with some moderate risk (at 28, I am still young enough to tolerate a lot of risk). I dont own a home or have a mortgage, I rent. I see absolutely no reason not to continue to rent as long as houses continue to be massively overpriced. Everyone is pre-programmed to buy a home as soon as they start making money, but the low price of rent is one of the best-kept secrets in America. In theory, a "fair" rent/month should be 1% of the home's value. Right now, in many places where I live, either the rent is about half the price it should be, home values are nearly twice as high as they should be, or a combination of the two. Even when you figure in the income tax deduction from paying interest, rent is a bargain right now.