However, don't overlook reestablishing your credibility as a borrower. If you are permanently classified as a "deadbeat" your borrowing power will suffer. You never know when you'll need to borrow for some unexpected need, to guarantee the debt of someone else, or to sign a lease or other contract that requires a credit check.

A strong credit rating is a valuable asset on a household's financial balance sheet. Unfortunately, many people don't realize that until the need arises -- often when it's time to buy a home. With bad credit, they may find themselves paying 11% interest instead of 8%. You have the option to pay cash, but it is your best option only because your alternative is to borrow under the onerous terms offered to deadbeats.

The first creditor to convince you are no longer a dead beat is yourself. When you withdraw $50,000 from your savings to make the purchase, you are effectively borrowing money from yourself. Repay it, with interest, just as if you had borrowed it from someone else. Charge yourself 8 percent, the going rate for a mortgage without points. To pay off the $50,000 loan at 8% over 10 years, pay your account $607 a month. To pay it off over 15 years your payment would be $478. To determine payments for other periods use the "Mortgage Payments on Fixed-Rate Mortgages" calculator on my web site.