Kalen Omo, of Omo Financial Coaching, gave us a slightly rosier idea of living without credit:

“I believe people today can absolutely live without a credit score. If mom and grandma could do it, why can’t I? As long as cold hard cash is the primary mode of payment for goods and services, you can live without a credit score.”

Omo went on to offer some common issues you might run into when living without credit and how you could handle them:

“Buying a home: The best way to buy a home without a credit score is either through a process called manual underwriting, the way mom and grandma used to get mortgages, or the one hundred percent down plan (aka buy a house in cash).

“Buying a car: If you’re wanting to buy a car, the best way to do exactly that without a credit score is saving up your money over time and buying it with cash. Also, because you are a cash buyer, you are also in a better negotiating position with the dealership, as you have walkaway power, and are not held to a car loan or its interest rate.

“Renting a car: The best option is to do your research and find a rental car company that takes a debit card instead of a credit card. You may need to have a deposit put on your checking account, but as long as you bring the car back in the shape you left it in, you’ll get that back.”

So to sum it up, your life is going to look a lot like a cash-only venue.

As we said above, life will be easier with good credit. Even Shvartsman, who was doing really well with no credit history, eventually hit a point where he needed a decent credit score. But how can you go from no credit to good credit?

One of the most reliable ways is to get a secured credit card. That’s a credit card that requires a cash collateral but is much easier to qualify for. Then you just have to use about one-third of your credit limit each month and pay your bill in full and on time.

Source: https://www.opploans.com/oppu/articles/bad-credit-is-one-thing-can-you-make-it-life-with-no-credit/

A good credit score gives you access to premium credit cards, better loan products and more favorable interest rates.

But if you have a bad credit score — somewhere in the FICO range of 300 to 579 or VantageScore range of 300 to 600 — you’ll miss out on these deals and often pay much higher in interest on credit cards, loans and mortgages.

A bad credit score can make life difficult in a number of ways, and it can even delay retirement by costing you more money over time. But improving your credit score is about much more than luck, and it’s only possible if you understand just how much your credit score impacts your life.

Since banks like Citi, Bank of America and Discover have rigorous standards for determining who qualifies for lending, you might not qualify for traditional loans or credit cards when you have a bad credit score.

“The practical effect of having a poor credit score is that your access to mainstream funding is limited or nonexistent,” Ulzheimer tells CNBC Select.

But before you seek lending from less-than reputable sources like payday loans, pawn shops and title loan companies, Ulzheimer stresses the importance of reading the fine print.

Payday loans, for example, are an easy way to get fast cash if you’re in a bind, but they come with disclosures stating that the APR can be as high as 400% to 700%. These should be avoided if at all possible, explains Ulzheimer.

“If you’ve got a choice between a $10,000 personal loan from Wells Fargo or a loan from ‘Joe’s title loan,’ reading the disclosures and agreements will make it very obvious that the mainstream lender will give you a better deal — that’s just mathematics,” he says.

2. You pay more for your loan

Not only will a good credit score help you bank with more reputable institutions, but it also gives you the best interest rates on loans.

According to Ulzheimer, consumers get the best deals on APR for auto loans with a score of 720 or higher, and for mortgages, 750 or higher.

Let’s say you’re applying for a mortgage with a FICO score of 620. For a $300,000 house, you might pay about 4.8% in interest with the current rates, whereas a buyer with a score between 760 and 850 would borrow at roughly 3.2% APR.

A 1.6% difference sounds small, but in this case your lower credit score would increase your mortgage payment by about $275 per month — costing you $99,000 over a 30-year term.

Article : https://www.cnbc.com/select/side-effects-of-bad-credit/

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