Living with Bad Credit

[quote author="IrvineRenter" date=1252021898][quote author="autox" date=1251780086]Since bad credit seems to be the only real downside to walking away from an underwater mortgage. How hard is it to live with really bad credit?</blockquote>


There is a premise hidden in your question that you need to examine: Why do you need credit at all?



The premise in your question is that credit scores matter to your daily life. Your credit score is completely irrelevant if you do not borrow any money. If you save for things and pay cash for them, nobody is checking your credit score, and you don't need to either.</blockquote>


I would wager that the vast majority can not pay cash for a house and hence need credit. Like others have eluded to, your credit scores affect things like setting up utility services, renting a place, or even getting a job.
 
From experience - bad credit will haunt a person for several years. The key is understanding the ramifications, being prepared, and making good decisions.



Back in the CA RE dump of the early 90's, we lost our house (not to foreclosure, we filed bankruptcy instead....I don't think that method is do-able any longer). The stigma with filing BK was modest, for a few years - at that time, many were in the same position, and banks/etc were understanding once it was explained. However, we worked pretty hard to rebuild our credit.....but it didn't happen over night. Try ~5-7 years.



What I see now is people losing their homes/filing BK/etc, and expect to rebuild their credit in ~12-14mos and buy another place.....eh, I don't think so.
 
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