The assumption being that one needs a credit rating. The only reason to have a credit rating is so that you can aquire more debt.....so you can have a better credit rating....so you can acquire more debt....
This is fundamentally untrue, because one of the most important factors in a credit score is the ratio of accessible debt versus utilized debt. This means as your long-term debt is paid off, and you don't acquire new debt, your credit rating improves. If you get a new credit card with a $25k limit, and carry a $0 balance, you just bumped your credit score up, and it didn't cost you a dime.
Of course, you have to use the card every once in a while, or they'll close your account. So, you use it to pay for dinner a couple times a month, and pay off the balance when the bill comes.
There are still mortgage companies that manually underwrite home loans at reasonable rates for people with a zero credit rating.
Who? And what rate will they offer, say, a household earning 1.5x the local median? Because I'm well aware of loans to people with nonexistent credit backed by significant assets, but if you have those types of assets, you're kinda already rich to begin with.
Everything else (and preferably the home too) save up and pay cash, everywhere I know stilll takes it.
Except that life happens. There's an accident, medical bills are coming in (medical bills are the #1 cause of bankruptcy in the US), your rainy day fund gets used up, and your car fails... now what? You lose your job, and now you're riding the bus and standing in line for a block of government cheese (is that still a thing?).
Credit is an economic shock absorber.
Also, the thing about "saving up" is that you get less than 1% a year if you put your money in a savings account (which won't even keep up with inflation, so your savings lose value day by day), but you can get far better returns putting that same money in appreciable assets, though it may not be immediately available. So you can continue to use credit on a situational basis, while your nest egg continues to grow. This is an important path to acquiring wealth.
Yes, there are a lot of thought patterns to possibly teach your children concerning money. All I ask is that you look at how many times people have gotten into deep trouble with debt....and how many times they get into deep financial and marital trouble with debt, and how man times people get into deep financial and marital trouble by having no debt. Seems and open and shut case to me but you're free to apply your own logic.....their your kids you're teaching for the future.
You won't get any argument from me on the point that many people are bad at managing credit, but we're a gifted forum here, so we expect our children to be smarter than most. Teaching financial literacy is essential to that, though.
