FI = low FICO score

[harley]

I assume someone FIREd has pretty good income from Dividends or pension.

With high ratio even 850 FICO will not help you.

If you pay off your mortgage and DTI goes to 0% your FICO will nose dive (if you have no credit cards or other loans). Do you think Bank will refuse to give you mortgage on vacation house because of that?

BTW it is that DTI ratio that decides how much of the house mortgage you can afford

If you are FIREd and living off of investments, either cash/interest or dividends, you have no income in the eyes of the mortgage company. A pension or rental income is a different story. But just living off investments will make it nearly impossible to get a mortgage.

 

[eta2020]

If you are FIREd and living off of investments, either cash/interest or dividends, you have no income in the eyes of the mortgage company. A pension or rental income is a different story. But just living off investments will make it nearly impossible to get a mortgage.

Personally if I did not get best mortgage rate I would pay cash so this is not something that worries me much. I am not against having single Credit Card which in my case is Costco Citi Visa, but I do not care about obtaining ton of credit since I simply have no use/need for it.

I probably would pay cash even if I did get best rate. I may not completely agree with following video but there is something to it.

 

[phil1ben]

Your issue is one of the reasons we have not paid off a fully amortizing 10 year mortgage with 6 years left at 2.875%. It represents only about 6% of the fair market value of our primary residence but is the only debt we have. Even though I have been mostly phased out of the mortgage deduction during my working life, when I retire in December I will revert to being permitted to deduct about 50% of the interest. Also, although I have no intention of ever borrowing money again an excellent credit score provides benefits other than credit.

My view is that if the mortgage is painless and is at these very low interest rates it is better to keep it. Also, this is not an all or nothing proposition. Interest rates are still very low. Perhaps those that have a mortgage should payoff half and refinance the balance.

 

[Badger]

Last time I checked was maybe a year ago at over 800. No mortgage for 20years, no debt except for a Costco-Visa and a MC CC that are paid off each month but we usually pay cash for everything. I froze our credit with all 3 bureaus so no one can take credit out in our name. Since we have enough to see us through to the end at our present comfort level I don't really care what our credit rating is. This is one thing I don't have to worry about.

Cheers

 

[-Jackson-]

Anyone who does not have Credit cards, is either very very poor at handling their money or is a bad credit risk, wait, that is the SAME thing....

How does not having a credit card indicate a person is poor at handling money?

 

[Looking4Ward]

For me, I didn't consider myself FI until I reached the point I no longer needed to borrow money. I accepted the fact I would never be able to get a mortgage and would pay cash for a home if moving. I only finance vehicles if the rate is less than what my investments yield and while I've got about a dozen different credit cards I pretty much only use the one with the highest rewards and pay it off each month.

What's interesting is my credit score is now the highest it's ever been (831) at a time I no longer need it.

 

[Sunset]

How does not having a credit card indicate a person is poor at handling money?

Someone good at handling money should not turn down free money by definition, and that is what is being done if you don't have a credit card.

• Credit cards often give you free bonus and ongoing bonuses for having it.
• They are loaning you money for free for a month until you pay it off, who else will loan you $25,000 like that if you need to book a trip for example.
• Other expenses in life are cheaper because you have a good credit score (which credit cards help you obtain) examples are insurance and mortgage rates.

Now, I know folks who are poor at handling money and they wisely chose not to have a credit card because they are poor at handling money. If they have a credit card, it is like a demon monster yelling buy, buy, buy at them constantly and they rack up a huge debt on piles of useless stuff, that takes them years of misery to pay off.

Credit card companies usually pay me between $500 and $1,000 per year in bonuses and benefits, while making my life easier and safer than carrying around hundreds to a thousand dollars all the time.

There are some other folks who don't carry credit cards, but they are a very low percentage of the population. The paranoid ones who don't want the government to track their spending, or know what store they bought stuff at, and credit cards allow this (so do loyalty cards).

 

[Mulligan]

According to Sunset, I got better at handling money today. I never have pushed for best CC,because I have too many in a filing cabinet never used. However, I bought about everything on one paying balance in full each month and getting 1% cash back. Noticing I rarely took advantage of the 5% categories, I accepted another CC I own offer today to switch to a 1% on purchase and 1% back on payment. So to the filing cabinet you go, Chase. Citicard is now in the starting lineup and I am 1% smarter with my money.


Sent from my iPad using Tapatalk

 

[eta2020]

Now, I know folks who are poor at handling money and they wisely chose not to have a credit card because they are poor at handling money. If they have a credit card, it is like a demon monster yelling buy, buy, buy at them constantly and they rack up a huge debt on piles of useless stuff, that takes them years of misery to pay off.

I only have one CC because I like simplicity just like I like simplicity in my investing.

That being Costco I imagine cancelation of Amex and now having new credit Visa from Citi is what had driven me down to 660. It also looks like I carry huge balance but it is payed off every month.


I am far from poor in handling money

 

[ivinsfan]

Right well your beef is with FICO not with us. No one said you were poor at handling money.

 

[Sunset]

I only have one CC because I like simplicity just like I like simplicity in my investing.
....I am far from poor in handling money

I know, as you have a CC, so of course you are not poor at it.