Dear Crabby,
I was trying to buy a new car the other day and they said my credit was just “okay.” What do you have to do to get a “good” credit report these days?
Sincerely, Ida Indebt
Dear Ms. Indebt,
We may be going slightly out of my expertise with these questions. I know I claim to have all the answers, but these financial things are usually a little over my head. I do know that in order to have good credit you have to have a good amount of debt. Sounds a little backwards to me, but from listening to that Dave Ramsey guy on the radio, that’s how they calculate it. I heard him say that if you pay off all your debt and close all your credit cards, then they will lower your credit score and make it harder for you to take out larger loans. I guess that can be a good thing if your goal is to get out of debt. I was talking to my good buddy Jeff the other day and he told me about his recent interaction with the Chrysler dealer. He said the salesman asked him if he had good credit or not. 
So Jeff quickly replied, “I think so. I always pay my bills, I have never filed for bankruptcy, and the government has never had to bail me out.” With that, the salesman smiled and said, “That is a good one, your point is well-taken.” Through the years I have really enjoyed new vehicles, so it seemed like I always had a car payment. Every time I went back to the dealer they told me that I had excellent credit and that I could pick out any vehicle I wanted. But a friend of mine had this idea that he would pay cash, save for five years and buy another car for cash and never have a payment to a bank. One year he was tired of always having to take his older cars into the shop, so he went with me to the dealer and wanted to buy a newer vehicle like I always bought. The salesman ran his numbers while we picked out colors and options. When the salesman came back, he asked if it was possible for me to co-sign the loan for my friend. He was appalled! He said, “Crabby has been in debt most of his life and I have always paid cash. Now he has to co-sign for me?” The salesman tried to explain that he had very little credit history and therefore a poor credit score, but it was too late. He was out of there. So this one has me stumped. I have never paid cash for a house and seldom ever paid off my vehicles before trading for a new one, and my credit score has always been great. But, if you listen to that Dave Ramsey or my friend without the car payment, there are many advantages to not having the debt over your head too. So good luck, my friend, and let me know how it all works out.
Sincerely, Dear Crabby
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