If you do not have a credit history then you are not creditworthy.
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You did not prove your contention. In fact, you may have succeeded in proving the contrary point and only demonstrated that you have to ‘play the game’, whether or not that really succeeds in truely demonstrating true creditworthyness in the following:
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It is important to finance a large purchase, such as an automobile even though you can afford to pay cash for it. All you need to do is keep making payments on the car for about 12 months then write a check for the balance and pay it off.
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Financing a vehicle does wonders for your FICO score. I have not financed a vehicle for years, but the credit history of the few that I have in the past makes for a nice looking credit bureau.
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If you hadn’t ‘played the game’, where would your FICO be? Did ‘playing the game’ really change how you would pay off a loan in the future?
So does it mean you have better management of money if you need to use credit to buy something, or if you generally anticipate financial need and also make allowances for the unanticipated?
Having successfully financed and paid off a car does not make you creditworthy.. all it says is that you took out a loan and paid it off. The fallacy of it making you creditworthy is partially to blame for our current banking problems and the failure of Option-ARM and Alt-A loans. These loans were taken out by people with high credit scores. These are not the same as sub-prime which were taken out by low credit score individuals.
What has been happening is that the credit rating agencies have been trying to ‘enlarge’ their businesses, since companies using them have to pay a fee to the credit rating agencies. In many cases, the credit rating is being seriously mis-applied. This is also why:
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When you go to finance a car, the lender does not ask you how much money that you have in the bank and they don’t care.
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Before the heavy use of credit agencies, the lender would want proof of how much money you have in savings because if you could not generate at least some savings, you probably couldn’t afford additional expenses in the form of the car loan.
Finally, here is an older graph showing the various types of loans that were going to re-cast.
[img_assist|nid=8228|title=Mortgage Rate Resets 2007.10|desc=|link=node|align=left|width=100|height=92]
