A question some people may ask themselves is, do I really need credit? Do I ever need to borrow money and have a credit score or credit history.
The answer to this is very simple, no, you do not need credit, but you may need a credit score, and a good credit score at that. And you do not need credit as long as you can pay for any purchases you make with cash, or a debit card.
And here is where it gets complicated, needing a credit score, and paying for all purchases with cash.
In the course of a day, week, or month, you may be able to pay for all purchases, food, transportation, bills, etc, with cash, but what if you wish to buy a car, a property, or some other large purchase. Can you just save up and pay for it outright.
In theory yes you can. However, the reality is that not many of us can save the fundss to pay cash for large purchases. We need the item now, or sooner than the time it would take us to save the money for it.
So we require a loan, which usually means, we need credit.
For the sake of this little written endeavour, let’s say you can pay cash for every purchase you make, including large expensive ones, such as a car or property, which means you do not need credit, but what about a credit score?
If you have never had credit, you may not have a credit score, or a high enough credit score, but what do you care, you can afford to buy anything.
There are areas credit scoring is used, that do not involve the lending of money.
For some insurance policies insurers may review the insured credit score as a part of the underwriting process. A person’s credit score can be used almost as a character reference to get to know someone, without really knowing them.
In addition, there are some jobs where employers check a prospective employees credit and credit score, as a part of the hiring process.
These jobs may include where an employee handles cash, or in some financial sectors such as banking and other lending fields.
So you don’t need credit, but you may need a credit score in order to qualify or be approved or hired.
There also is the world we live in today.
So having a credit card and using one for some purchases is good, but which also necessitates having credit.
In attempting to answer the main question of do I need credit, the reality is we live in a credit society, so even if you could pay cash for all purchases, having a credit score is sort of required. And as we move into a Social Credit Scoring world, in which credit scores are only a small part of what makes up our Social Credit Score, we may still need to have a credit score as a part of this new scoring system.