Can you live without credit?

Yes you can, but it’s not recommended because it’s more beneficial to use credit to your advantage. You can use credit cards wisely and responsibly to build credit history, add to your credit mix and improve your credit score to increase your chances of loan approval, save money on interest rates and more.

Trying to live your life completely credit-free is possible, but it can cause you difficulties in the long run.

Challenges of living without credit

Getting a loan may become harder. Most people are unable to pay for big purchases (such as a house or vehicle) in cash and will need to take a loan for it. Without any credit history or score, it’s incredibly difficult and complicated to get loan approval from banks or lenders.

No access to credit for emergency use. If you need funds urgently and don’t have enough cash to cover the emergency (such as for medical treatment) having a credit card is very helpful and convenient, and can help you get things sorted faster with less hassle.

Travelling can become a hassle. Without a credit card, even simple things such as trying to book a hotel or rental car in advance can become problematic. You’ll need to do a lot of planning ahead, such as checking if your debit card is accepted in places you plan to visit. You may also need to carry large amounts of cash on you and have enough spare cash in your bank account.

Trying to find a place to rent can be difficult. Searching for rental housing can become stressful as many rental agencies refuse applicants who don’t have credit history and credit score. Others may ask for more money as a deposit or insist that you find a cosigner or guarantor.

How a good credit score can benefit you

Even if you don’t plan to apply for a loan anytime soon, having a good credit score can still make life easier. Here are 5 reasons to have a good credit score.

Check your latest MyCTOS Score report today to stay on top of your credit health, increase your chances of loan approval and fix any credit issues early, such as a low credit score or missed payments.

How to build credit

It’s possible to build credit, even if you’re starting from scratch. Learn how here.