Our credit report is full of debt that we are expected to acquire in order to prove we can purchase a home. In order to purchase a home, income and monthly costs to sustain that property should be accounted for, but NOT based on Credit score. Why are we required to put ourselves into debt to prove we can afford a home? This is contradicting. Our money is going towards credit cards and other debts we are expected to use to maintain our scores. This money could be used to pay our mortgages and utilities. Many American’s don’t need/want unnecessary debts, but are expected to take out in order to “show” lenders we are responsible. Many middle/lower class Americans are in debt in hopes to one day purchase! We are not teaching our children how to understand credit in schools but are expected to just know what to do without guidance once they graduate. These children become parents who do not have the same knowledge and cannot teach the next generation these things, because THEY weren’t taught at home or school.
Rent payments should be allowed to show proof we can afford a mortgage. Utility payments should be allowed as proof of on-time payments. Bank statements showing incoming and outgoing payments as proof. But Credit scores should not be apart of a homebuying process. We need to bring homebuying back within reach to our current and future generations. Make homes affordable and attainable again!
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Currently, you can add rent and utility payments to your credit report; you just need to sign up. Below is one source but I’m sure there are others.
Personal finance should be part of the school curriculum (separate issue). Credit scores do exactly what lenders need them for - to determine if the borrower can properly handle debt. Credit cards are one example. Proper use means paying the balance in full every month. If you do this, the cost is zero and you build a history of using credit.