This article is a year old, but I just came across it today and thought it was worth sharing. It’s hard to know how much this sort of thing was really going on at credit card companies, and how much the credit card reform laws have changed things. But I find it particularly interesting that shopping at used clothing stores could be a red flag that a person is facing financial difficulties.
My husband and I make a very comfortable living. We’re on track to pay off our 15 year mortgage in less than half that time; we max out our HSA and both of our IRAs every year, and we set aside a significant amount of money each month into emergency savings and another savings account that we’ll eventually use to pay cash for a new (to us) car. We also fund our son’s 529 every month, and have never missed a payment on anything in our lives. We put all of our expenses on our credit card, and pay it off in full each month. In short, we’re a pretty darn good credit risk (and our credit scores do reflect that – when we bought our home last year, our scores were excellent and we qualified for a great loan).
But I’m curious whether the fact that we never purchase new clothing (or much of anything else, for that matter) has had any impact on our credit scores over the years? Back in April, I stopped going to the thrift store almost entirely. I pretty much stopped shopping all together, except for food. I started getting rid of clutter and stopped bringing more into the home. But before that, I went to Goodwill almost every week. I would usually purchase something, and I always used our credit card. There are never any charges on our card from malls or most of the major retailers. But our food tends to come from “upscale” places like the co-op, the local health food store, and sometimes Whole Foods. I wonder what people who analyze spending patterns think of us? If they believe that buying used clothing indicates financial distress, then our food purchases probably cause a bit of head-scratching.
For us, buying used whenever possible just makes sense. The fact that we skip a lot of purchases and buy used for a lot of others is the reason why we’re able to afford to stash a good amount of money in savings each year. It’s why we’re able to take out a 15 year loan and pay it off much faster than scheduled. It allows us to use our money on what really matters to us, rather than simply spending it on consumer goods that we can easily get used for far less money. And it’s also the most environmentally-friendly way to shop.
Personally, I don’t really care about our credit scores these days. I continue to monitor our credit reports to make sure that they’re accurate, but that’s more for avoiding scary things like identity theft. We don’t plan to apply for a loan again in the future. I know, life can throw some serious curve balls, and I’m not one to say never. But we’re setting ourselves up to not have to use our credit to apply for any more loans. We plan to stay in this house forever (or at least for a very long time). I know, that’s what we said about our last house… But if we do ever leave this house, it won’t be anytime soon, and will most likely be long after the mortgage is paid off. If we are ever in the position of needing to buy another home, hopefully we’ll be paying cash. We’re currently saving money to buy a newer vehicle one of these days, since ours are 20 years old and not going to last forever. But again, we’ll be paying cash – we would never finance a car. We don’t have any plans to apply for additional credit cards or other lines of credit either. So hopefully, our credit scores won’t be needed again (and yes, we could manage just fine without our current credit card – we use it for convenience rather than necessity).
But I know that credit scores are very important for a lot of people. And I find it odd that what I consider to be responsible behavior – buying stuff used – might be looked at as a potential problem when people apply for credit cards. Any thoughts on this?
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