Bad Credit Rating - a good thing?

A bad credit usually regarded as a problem, but is it always so? Are there situations where it may be beneficial? 

Credit is a tool that must be handled with wisdom to be of value. Being able to borrow money or obtain credit cards are not automatically make a person able to handle that power. Indeed, it has led many people into serious financial problems. Would not it have been better for many of them if they had not been able to obtain credit? 

Bath Credit Rating - Two True Stories

A friend who we will call Jill, has not paid a phone bill in early adulthood, and made a few other minor mistakes that hurt her credit rating. While it was true that this made it difficult to get a home mortgage later in life, it is also true that it made it nearly impossible for her to get credit cards. It was a good thing that even she will admit. She just was not ready to handle such responsibility, and so her bad credit rating has prevented her from getting deep debt. 

As a result, Jill to pay cash for things, or wait until she saves enough money. Does this make her less happy person? Not as far as I can tell. While it is true that she wants to borrow and get credit cards, her inability to make it also means that she does not have debt stress, which is so typical now. 

Another friend who we will call Mark, began his adult life with a good rating. He could get credit cards at will and finance cars and snowmobiles also. He did it all. With a decent job, he was unable to make payments on its debt - at least initially. But by the time he was 30 years old, he had over $ 22,000 in credit card and other consumer debt. 

Eventually it became too much to handle, and he only escaped bankruptcy by convincing the credit card companies to reduce his debts. To do this he had to stop paying on the cards, or businesses would not believe his reason for his dilemma. Most cut at least 30% off what he owed, provided that he paid the balance immediately, as he did with a home equity loan. 

As a result of this maneuver, his credit is not as bad as if he had actually filed for bankruptcy and he was able to rebuild his credit score - and his credit balances. He started fast again stressful process overburdening themselves with debt. So was Mark's decent credit a good thing? He has some nice "toys", but when his friend, I'm also the added stress and unhappiness. 

Credit experience and opportunities

A poor rating is certainly not something to strive for. On the other hand, if you already have one why not see it as a lesson and an opportunity? The lesson? Your habits got you there and they would probably get you into more trouble if you could borrow even more money. The opportunity? Learn these lessons and develop better habits. 

Pay cash. Get in the habit of saving for things. Knock down those credit card balances. Start setting aside money to a good used car can be bought without a loan. Then start putting what would have been a car payment for future payments on the house or even a business. Your bad credit rating can be a good thing if you learn your lesson and take the opportunity to become a better manager of your personal finances.