exnavynuke
Thinks s/he gets paid by the post
My comment about red flags was about the "have ongoing proof of the ability to handle debt" and perhaps I should have said (one example is credit cards).
You are right, credit cards are not the only measure of credit worthiness.
It's not just the ability to pay, but more importantly the willingness and the responsible nature to pay bills on time.
That's why the current system of credit score penalizes quite a bit for missing payments on bills.
Which is why credit cards are a good indicator, as you are free to rack them up, and then every month face the decision to pay the credit card or not.
Exactly.
If you owe $800 in rent, and have $1,000,000 in your checking account but don't pay the rent on time, your landlord is still not getting their rent on time.
If you have nothing documenting that you will actually pay the bill (not just can, but will) and pay it on-time, then you're a higher credit risk than someone with a known track record of paying bills on time.
Opening a credit card (with no annual fees), then using it and paying it off regularly is a simple process that can actually be beneficial (with credit card rewards programs) AND it will quickly raise credit scores for people with no credit history. A single credit card alone can let someone get their credit score into the 800's in time.