Top 5 Credit Misconceptions Debunked

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Top 5 Credit Misconceptions Debunked

We've all heard the rumors...from neighbors, relatives or friends. A wide variety of myths float around about what you should and shouldn't do to manage your credit. Credit Karma has exposed these urban legends to provide you with the truth about credit.

Myth #1: You only have one credit score.

The reality is that you can have a wide variety of different scores, not just one... or three. Why? This confusing fact can be attributed to a few different factors.

First off, there are three main national credit bureaus, and they can all have differing information about you. Most lenders aren't required to report to all three bureaus, so one bureau may have information about one of your loans while the other two don't. Differing information can understandably result in different scores.

Secondly, there are dozens of scoring models that could be used to calculate your score. If one model emphasizes your on-time payment history while a different scoring model puts more weight on your credit utilization rate, you could end up with different scores even if they come from the same bureau and are based on the same information.

Lastly, credit scores can change constantly. Lenders are regularly sending new information to the bureaus, so your credit report (and subsequently your scores) could change on a day-to-day basis.

Myth #2: Your score will drop if you check your own credit.

You don't need to be afraid of checking your credit score or report. While hard inquiries, which can be made when you apply for credit, could bring your score down, checking your own score usually results in a soft inquiry, which doesn't harm your credit. Feel free to look at your scores and reports with Credit Karma as often as you'd like -- you won't be penalized or charged a penny.

Myth #3: Closing old accounts is always a good idea.

If you're considering closing an old account, thinking it'll help your credit score, think twice. Canceling old credit accounts could lower your score because you lose the credit limit associated with that account, which can cause your credit utilization rate to increase if you don't cut back your spending. In addition, if it's one of your oldest accounts, it could lower your average age of accounts and damage your score when it falls off of your report.

Myth #4: Being a co-signer doesn't make you responsible for the account.

When you open a joint account or co-sign a loan, you are taking on legal responsibility for the account. Any activity on these shared accounts, good or bad, could show up on both people's credit reports. This means that if you co-sign for a friend's auto loan and he doesn't make the payments, your credit profile could be hurt by his actions and vice versa.

 

Myth: Credit reports are always accurate. Fact: 1 in 4 consumers discovered errors on their report. [Tweet this]

 

Myth #5: Your credit reports are always accurate.

In 2013, the Federal Trade Commission found that one in four consumers identified errors on their credit reports that might affect their credit scores. If you want your credit reports and scores to more accurately represent your credit history, you can regularly pull your reports and dispute any inaccuracies you see.

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Advertiser Disclosure: We think it's important for you to understand how we make money. It's pretty simple, actually. The offers for financial products you see on our platform come from companies who pay us. The money we make helps us give you access to free credit scores and reports and helps us create our other great tools and educational materials.

Compensation may factor into how and where products appear on our platform (and in what order). But since we generally make money when you find an offer you like and get, we try to show you offers we think are a good match for you. That's why we provide features like your Approval Odds and savings estimates.

Of course, the offers on our platform don't represent all financial products out there, but our goal is to show you as many great options as we can.

All Comments

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1 Contribution
34 People Helped

Helpful to 34 out of 35 people

 ok let me tell you what else will hurt your credit so if you are married keep credit cards separate.  My husband and i both had our credit cards in both of our names of course we were married.  When he passed away and since I lost that income they stated I would have to close those accounts and then reapply.  Well now those close accounts will stay on my credit for what 7 to 10 years they don't state due to spouse passing away they just state closed so if we are going to have credit reporting agencies then they should report accuratley trust me I wish our accounts were still open that would mean he would still be here.  So not only did I have to endure his death I also got slapped in the face from the credit agencies.  Same thing happens when you get divorced and accounts have to be closed because they based it off both your incomes.  My advised is only get the credit that you as an individual can afford.

Reply by
Punchybird

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8 People Helped
Helpful to 8 out of 9 people

I learned early not to share credit. I'm going through a divorse right now and I'm glad that the credit I have is my credit and not his. I also made sure that the cards I applied to were given my income and not both of ours. I hope this measures will prevent my score from changing too much in the divorce.

Reply by
KimSilva69

4 Contributions
144 People Helped
Helpful to 12 out of 12 people

I'm so sorry for your loss. My daddy just passed away July 9, 2010 and my mother went through the exact same thing. She has a perfect credit score and one of the credit cards she's had the longest - that only had a balance of $1000 on it - was cut down to $1800 from $50000. That is total CRAP!

Reply by
BANDANA8531

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0 People Helped

That is very helpful because I plan on getting married soon. We have everything seperate right now and plan on keeping it that way. I never thought about the credit though. It does make sense legally though being that the other has passed can not be held responsible. Thank you for this knowledge.

1 Contribution
36 People Helped

Helpful to 36 out of 39 people

 My score is in the high 700's.I pay my bills on time,no collections,1 inquiry in the last 3 years and I have 4 credit cards or revolving credit with total available credit of  15,000 of which only 2900 is in use which I will have paid off in this month. By the way,no car note or mortage.

Here is what I know..

The essentials..

1) PAY YOUR BILLS ON TIME

2) NEVER CO-SIGN...UNLESS YOU ARE ABSOLUTELY SURE YOU CAN TRUST THEM

3) KEEP BALANCES LOW

Now the hard part....

1) Pay with cash if you can.

2) Check your report at least every 6 mos. or less.

3) Keep the oldest account open

4) If you do use credit,use little.Pay off balance before or at due date

5) If you open new account close the newest .

Credit card companies have the upper hand. We will never fiqure it out.Just try to stay out of unnecessary debt and credit.

Reply by
Star1320

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2 People Helped
Helpful to 2 out of 4 people

Credit Card companies upper hand "We will never figure it out." Ummm...if you realize that our banking institutions are the frauds that are draining our economy, then...it all makes sense. Yep. Figured it out. never say never. now...to just figure out how to undo that. OH!! A government run by proper Think Tanks with real Thinkers! Hmm...figured THAT out too!

1 Contribution
8 People Helped

Helpful to 8 out of 9 people

Don't know if this will help a lot of you, but I found out that I was killing my score by paying credit card balances down to zero, as soon as the card's website would let me pay it off on-line. I have only two cards, but I still pay each off as soon as it will let me do so.

I agree with so many of you on how FICO scores are handled and why. I just remind myself that it's a cash cow for the reporting agencies and let it go at that. I mean...seriously...why give a consumer a $5000.00 credit limit, just to have the FICO score processes drill it down to a usage amount of $1000.00 or so. It's very confusing to me, so I just use them and then pay them off. I don't care about FICO scores that much anymore. I run a clean process and I pay on time and usually in full. I hope that's good enough.

Best of luck to you all.

Top Contributor

Reply by
Martinho69

30 Contributions
44 People Helped
Helpful to 2 out of 3 people

Simply innacurate information.

Credit scores do not decline because you pay off your balance.

Reply by
sabreyanks17

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0 People Helped

I'm not sure who Martinho69 is, but that can be the case. When you pay off the balance in full it can look like you're not using your credit. All the bureaus report at different times of the month so one may capture your balance before it's paid and others may always show zero. I had tried applying for a mortgage about a year ago when my score was around 630. While I have a very bad payment history and quite a few accounts in collections, I was obviously denied, but my score itself was just above the minimum qualification requirement for the type of loan I was applying. The loan advisor told me straight out that carrying a balance of 30-50% of the available amount was ideal. Always showing no balance is just as bad as having a high balance in her words.

Reply by
GreyPoupon

1 Contribution
0 People Helped

I'm in the same boat. We've paid off our house and nearly for most or our 25 year marriage have owned no credit cards. The one we have now we pay off each month. Now we want to buy a second home to retire to. Our credit scores were straight "A"s, except for a C for having no balance on our credit cards, and a "D" for having too few of them (and no mortgage) to begin with. Our rating? 695. That is huge punishment for being responsible. The advice on how much to keep on a card varies from under 10% to between 30 & 50%. 

The most common reason couples fight is over money, and no wonder, with this system.   

1 Contribution
68 People Helped

Helpful to 68 out of 75 people

i haven't got no more bills and never been late on what i do got...and every time i get on here my credit score drops. why is this????

Reply by
stitchcrazy

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3 People Helped
Helpful to 3 out of 4 people

Because your not hip deep in debt where these guys like to keep you.

Reply by
readybagel

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15 People Helped
Helpful to 15 out of 22 people

You're being penalized for poor grammar!

Reply by
Kaoss

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6 People Helped
Helpful to 5 out of 11 people

Poor grammar is factored into credit reports.

Reply by
teriod

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1 Person Helped
Helpful to 1 out of 4 people

perhaps you are reading it wrong

Reply by
vaporprice

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4 People Helped
Helpful to 4 out of 10 people

You lose 50 points for bad grammar.

Reply by
dckristen

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Helpful to 2 out of 2 people

Me too.  I get mostly As except for "credit card utilization" where I am rated a C.    I think something about CreditKarma is screwed up - I have paid 100% of my bills on time, and I typically pay off a balance of about $1000 a month on a card with a $15,000 limit.  That should put me in the "A" bracket (1-20%) utilization right?  Wrong.  They toss me in the "C-D" bucket, which supposedly is reserved for people who utilize over 50% of their credit each month.  I don't even come close to that.  What's up CreditKarma? 

Reply by
pwillc

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Helpful to 5 out of 10 people

They're probably taking your grammar into consideration.

Reply by
sonia1782

2 Contributions
46 People Helped
Helpful to 46 out of 47 people

dont trust the score credit karma is giving you, it is not always accurate. I recently found out that my actual credit score is 100 points higher than credit karma is estimating.

Reply by
Stephen851

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9 People Helped
Helpful to 4 out of 5 people

You might have extra activity on your account that you don't know about. Make sure someone is not using your credit behind your back.  

Reply by
kaliber44

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Helpful to 2 out of 3 people

check your update history. it will tell you what changed since the last update.

I will say credit utilization % or average age of credit history.

Reply by
Tamia75

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Helpful to 3 out of 5 people

Unfortunately because they keep how they come up with the credit score such a secret, none of us will ever be able to master it. It's a no win situation. Get what you need in life on credit/loan like your house and car and then save for everything else. The government knows most of us live beyond our means and therefore NEED them. We have to stop supplying the need. We are all being driven crazy by banks, insurance co's and loan officers in an effort to get our scores up but like the person below stated, he has been doing everything "right" and still has a problem obtaining credit. Lenders want us to have 2-3 credit lines in good standing at all times. Unfortunately that means we do have to carry a credit card that we continuously use but keep at a low balance. The ENTIRE system sucks and is meant to make money for someone, certainly not the customer!

Reply by
mamafox2011

1 Contribution
3 People Helped
Helpful to 3 out of 4 people

Probably because you don't have any credit accounts.  Somehow credit is hardest to get when you are without any accounts.  People want to see payments on time, etc.

Reply by
peterjones368

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1 Person Helped
Helpful to 1 out of 5 people

Holy sh@#, you must be from a trailer park. Maybe you should have revised your sentence composure before posting.

Reply by
bisky

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Helpful to 1 out of 5 people

Maybe they base credit score on grammar.

Reply by
Chmarr

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12 People Helped
Helpful to 5 out of 6 people

As indicated elsewhere by the CK staff, just because you have no debt, it doesn't mean that you'll have a high score. In fact, you'll get a higher score over time if you can show that you can take on debt and pay it back regularly. Keep credit cards open and paid off. Take on installment loans and pay them back regularly.

If you don't take on any debt, then there's nothing to show the CC companies that you can be responsible with debt. Ie, your credit score is a "credit practise" score, and if you don't practise.... then there's nothing to adjust.

Reply by
jonzobonham

1 Contribution
1 Person Helped
Helpful to 1 out of 5 people

It's your grammar.

Reply by
georgie2005

2 Contributions
16 People Helped
Helpful to 2 out of 2 people

I'm at 775  but when I'm on here it's 620, which i know it is not true cause I just paid all my debt off and seems like it should have went up , not down !!

Reply by
ballbeater

9 Contributions
120 People Helped
Helpful to 3 out of 4 people

Our credit system is unfair and a joke, it is amazing that if an individual wants to reduce their credit limits or close a credit account that they should be penalized. How about something real simple if you pay off all your balances on time that is what really counts.These credit agencies design the system to be very complex and there is really no need for it. 

Reply by
amnielsen

6 Contributions
3 People Helped
Helpful to 1 out of 4 people

They do take points off for poor grammar.

Reply by
clusterin

3 Contributions
2 People Helped
Helpful to 2 out of 3 people

FIRST, TAKE AN ENGLISH COURSE, man your comment is grammatically terrible.  Check your total history and make sure all of your credit cards are yours and check your balances on your cards.  If you are increasing debt each month due to interest charges on your card, your debt:income ratios are dropping and your scores are dropping as well.

Top Contributor

Reply by
BungalowMo

112 Contributions
818 People Helped
Helpful to 2 out of 4 people

because the scores here are BS.  And so are the algorythms to calculate this fake score

Reply by
bkerby11

1 Contribution
13 People Helped
Helpful to 13 out of 13 people

Not because of checking your credit. Something else you must be doing...or not doing.    LIke it says it does not affect your score.  Maybe you are applying for lines of credit?  Doing so adds a hard check which drops your credit score.

Reply by
gaigeybaby

2 Contributions
1 Person Helped
Helpful to 1 out of 2 people

i am in the same boat.. i have a few "little" credit accounts with tiny credit lines and i pay them on time now for 5 years, i paid off a $ 27,000 car loan was never late or missed a payment, and payed off a $9,000 personal loan , never missed or was late on a payment or on any of my credit cards and my credit score dropped!!! what the hell else can i do to build my credit. ???

Reply by
guenth61

1 Contribution
1 Person Helped
Helpful to 1 out of 1 people

If you have applied for credit, then a hard inquiry can cause your credit to drop.  If you have added more debt balance to your revolving accounts you will see a lower score too.  A higher debt to revolving credit available is seen as a negative.  Try and keep your balances below 30% of your credit available.

Reply by
rwb1965

5 Contributions
1 Person Helped
Helpful to 1 out of 1 people

having multiple cards or accopunts and carrying more than 50% balances will effect your score, I learned this the hard way. I always pay my bills on time but carrying max ballances on 4 cards hurt me.

Reply by
walserb

3 Contributions
32 People Helped
Helpful to 1 out of 2 people

Psst....their ****ed cause u wont pay them any more interest so they can rob u of more money than they already have.Thats all it is about anyways...they keep peoples scores as low as ****ing possible in order to give them the highest interest rate they can.Legalized criminals is what they are.

Reply by
dubyasdada

1 Contribution
1 Person Helped
Helpful to 1 out of 2 people

Banks want to be able to make money on your credit cards. If you pay it off every month then the bank is not making money on you. This simply scores your account at about the same rate as a 50% user will get. To get the maximum score from a credit card you would need to carry a balance around 30% to show responsible usage and allowing the bank to make some money.

Reply by
triana77d

1 Contribution
0 People Helped

The same is happening to me.

Reply by
dfniev

4 Contributions
2 People Helped
Helpful to 1 out of 1 people

Did you check your CreditKarma report card to see what is affecting your score the most?   Check your report card to see what grades you are getting in each category.  This should help you figure out what is affecting your score.  You may be unaware of derrogatory accounts that maybe updating their activity every month.  This could be affecting your score.  Visit www.annualcreditreport.com to obtain a free detailed Credit Report from the three Credit Bureaus.  If you do so, check Experian's report first as they do a good job showing which accounts are affecting your score negatively. 

Reply by
dfniev

4 Contributions
2 People Helped
Helpful to 1 out of 1 people

You might want to check and make sure your creditors are reporting the correct credit limits on your cards.  For example, if you have a 15,000 but the creditor has reported your limit is only $5,000 this would affect your credit utilization ratio.  Visit www.annualcreditreport.com  to obtain free copies of you credit reports for accuracy.  

Reply by
dfniev

4 Contributions
2 People Helped

Credit Karma is only based on your transunion credit report.  If you pull your credit report from Experian or Equifax the score would be different.

Reply by
dfniev

4 Contributions
2 People Helped

Closing accounts may negatively affect your credit score so the fact that you paid off a $9,000 personal loan and a $27,000 car may have lowered your score.  Its not fair in my opinion but that's how it works.

Top Contributor

Reply by
Strapples

12 Contributions
20 People Helped
Helpful to 1 out of 1 people

im in the same bucket aside from bad grammar. i never have been late on a credit card bill. sure i paid one at LAST MINUTE. i do have kind of higher utilization with my peak at 27% but one card was near maxed out so single card utilization of my amazon card hit 94% one time. but really WHY THE CONSISTENT DROP!

Reply by
jade112000

1 Contribution
0 People Helped

You're totally right. Thats the sad thing. 

Reply by
vileniamora

1 Contribution
0 People Helped

Hahahaha.... I can't stop laughing!

Reply by
abbeygeorge

1 Contribution
0 People Helped

Maybe if you could grasp proper English you could grasp your credit score.  Kudos for trying.

Reply by
ppender

7 Contributions
14 People Helped

Double negatives will ruin your credit score.

Reply by
loveyourchild

1 Contribution
0 People Helped

to build your credit you have to use credit....car loans, house loans, credit cards and the like.

1 Contribution
252 People Helped

Helpful to 252 out of 278 people

There appears to be a flaw in the overall credit score calculaton procedure.

My wife and I score in the high 700's (a score that is OK - but, fails to reflect our actual ability to access credit).

Example, we have no debt (and have not carried any for many years).

Our finanical situation is:

1. No mortgage debt though we own our home in addition to a sizeable lake property.

2. We have in the past year spent upwards of $60,000 on home and cabin improvements - all paid for with cash.

3. We carry no month-to-month credit card debt and often pay in advance for any anticipated credit card charges.

4. We pay property tax and income tax obligations in a lump sum upon receipt of the tax billing.

5. We have finanical holdings that reach well into seven figures - holdings that were generated through careful handling of credit availablity.

We have never paid a late charge on any credit debt throughout our lives.

Yet, we are told that our credit score can only be raised if we acquire additional credit cards to "raise" our available credit.

It sure is a good thing that we can live without any "additional credit" since our availability to obtain this credit is limited due to our less than perfect credit score.

It's no wonder that so many of our citizens find themselves in finanical straits due to their need to carry an excess of credit cards to obtain additional credit debt.

You make a great point. Your wife and your financial situation looks very healthy. With that said, it is a common misconceptions that a credit score is about debt. It is more about ability to pay back a loan. You inspired us to write a small post on the subject. No Debt Does Not Mean Good Credit

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Top Contributor

Reply by
JohnHoer

91 Contributions
215 People Helped
Helpful to 16 out of 20 people

You're a wise man. I wish I would have learned that lesson earlier. My parents raised six children and only used credit when purchasing a home or an automobile. They only used a credit card when traveling. They also knew the difference between "I need" and "I want".

I think few users of credit pre-meditate that they will not pay their debts. It's just that credit cards are much too easy to abuse.

Reply by
ljdaystar

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Helpful to 19 out of 19 people

I would extend this man credit any day of the week... a role-model citizen indeed.

Reply by
ministerpaul

3 Contributions
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Helpful to 7 out of 7 people

 The math is against us and only legislation will change the measures by which our scores are calculated. You are in excellent financial condition, but the credit raters want to see history of payments to revolving credit or some type of loan. This in my opinion does not make anyone financially respondsible by paying monthly minimums. So until changes are made the only way to build your credit score would be to open an account and pay it off each month.

Top Contributor

Reply by
gatorman

12 Contributions
109 People Helped
Helpful to 13 out of 14 people

You said it all, And not only do they inquire at will but once they are on your credit report, Someone somewhere decided it shall remain 2 years. Why so long  its crazy who came up with 2 years i think 1 is fine.. Punish the working class.But our corporate Masters have us by the shorts.

Reply by
mmack1985

1 Contribution
7 People Helped
Helpful to 7 out of 10 people

So ministerpaul you want "legislation" changing the scoring formula that a private industry uses & are going to use the example of your own score not going up at justification? heee hawwww

Reply by
jenklemmetsen

1 Contribution
21 People Helped
Helpful to 21 out of 24 people

Well thank you....for making the rest of us feel like dirt!  Mr...we own our home and lake property, your life sounds cushy enough, why the hell on you on the site?!

Reply by
lovemymuffie

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Helpful to 19 out of 19 people

I am a strong believer in "no debt" because I will be paying for everything with cash in the future. I have a $1000 emergency fund which will get us through the next 1.5 years until we're debt-free except for the house. Our income will be very substantial at that point, since we will have no debt, and paying extra on our mortgage every month. Currently we're able to pay down $1800-$2200 a month on debt, due to working our debt snowball since last October. At the end of this month, we'll have paid down over $18,000 in debt in 6.5 months! After our debts are paid, we'll save for our 3-6 months emergency fund and then begin contributing 15% of our income towards retirement. Wake up people, debt is slavery! The bible states that the borrower is slave to the lender. We will finally have our freedom when our mortgage is paid off, and we'll never look back. We will be so strong in our monthly income and emergency fund, we will never have to use surety again. Dave Ramsey showed me the way, and you can achieve your freedom too!

Reply by
deltour

1 Contribution
3 People Helped
Helpful to 3 out of 3 people

I thought of Dave Ramsey as soon as I saw the $1000 emergency fund.  Started his program 2 years ago and still have some debt but being laid off did not become a crisis.  Thank you Dave.

Reply by
TeeJustice

1 Contribution
1 Person Helped
Helpful to 1 out of 1 people

Dang! I feel ya...wish I had your financial standing instead of being one of those people who 'need to carry an excess of credit cards to obtain additional credit debt.' :(  I am happy for you and yours...keep up the great work! :)

Reply by
jwbmining

2 Contributions
48 People Helped
Helpful to 46 out of 50 people

Why are you full of yourself to the point to not only explain your glorious 7-figure financial situation to those on CreditKarma who are mostly regular people looking for advice, but to also be trying to increase your credit rating from the "high 700's" to the 800 range? Sounds like you're living the dream already, what could an 800+ credit score give you that you can't already get credit for or just simply pay cash like you have everything else? 

Reply by
delsgirl25

2 Contributions
19 People Helped
Helpful to 19 out of 19 people

I have found out that ppl with impecable credit actually get ASKED by some credit card company (not sure who it is or if it is a multitude of companies that do this,) but it's basically and elite credit card (that is actually...metal.  Yes, METAL...) and it's has a ridiculous cap on the spending limit allowing them to spend so much on the darn thing because the company has faith that those people will pay it back without fail.  In other words: you have to be invited by the company to be able to use the card so who knows...maybe that's what this guy is shooting for with the 800+ credit score... =p  still though,  i think instead of berating the poor guy, let's cheer him on because this is the kinda inspiration we need.  A real person who worked hard to get what he has.  I envy of course, but I know that if I work hard enough I can one day bask in the same glory.  Just saying =]

Reply by
mexa

2 Contributions
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Helpful to 9 out of 9 people

  • I would add also if your situation is so perfect why do you even bother about your credit if you can get anything with cash. It doesn't make sense.just chill

Reply by
dzco1

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Helpful to 2 out of 2 people

I hope you used credit cards to pay of your 60k spend?

Top Contributor

Reply by
dbatl2012

34 Contributions
776 People Helped
Helpful to 12 out of 12 people

Larryaw, that is the whole design of our country - DEBT. They want you to owe because that is how they make money. Right now they don't make money off your wealth, so you are actually a bad prospect because the banks feel that you won't give them an opportunity to take advantage off them.

Have you ever noticed whenever you go to a department store (Target, Macy's, etc) everytime you check out, they want to push their credit cards on you by telling you that you could save 20% right now if you get their credit card. This is the problem they want us to be indebted for ever..

The funny thing is that in Asia, "owing" is perceived as shameful and during the recession Asians are able to buy everything because they don't carry any debt. So I would tell you be thankful that you don't have the need for credit and stay that way. Who cares about when the banks deem you if you don't need it. You own your house, you have money put away that's better than any loan or credit a bank could ever give you!

Reply by
tany1958

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Helpful to 2 out of 2 people

yes indeed ,is more easy to use credit card since you do not see the money , but is sad when you see the bill

Reply by
SCUBAsabre

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Helpful to 23 out of 25 people

Shame on you for being envious. They are on this site just like the rest of us... to better their situations and protect thier investments. It has NOTHING TO DO WITH YOU... Grow up and perhaps learn from them rather than be such a hater.

Reply by
AnxiousUser

8 Contributions
31 People Helped
Helpful to 19 out of 19 people

There's an easy way to fix this. Stop paying for so much in cash. Paying $60,000 in cash is silly when you can make the system work for you by using credit to pay for it. Pay for things with a credit card and then pay them off immediately. In fact, with online bill pay, you can pay immediately after you get home from making a purchase.

Also, carrying a few credit cards is not what puts people in dire straits. Maxing out one's credit cards buying things they can't afford and then paying the minimum balance forever is what does that.

Reply by
gogreen1716

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Helpful to 1 out of 1 people

so true! my negatives are no credit cards or mortage my home has been paid for a long time and this is a negative. paid off a home before this one. paid off numerous cars and credit cards, student loans and this is a bad thing??

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carriemeback

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When I got my 1st credit card I told my banker that I would be paying off my card within the week after my purchases in order to build a good credit score. She (my banker) advised me that, I should wait until after the bill comes out, then pay it off. The reason for this is that if I pay it off before the bill comes out, it registers as if I hadn't used the card at all, and you have to use your credit in order to prove your credit worthiness.

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ailesjan2012

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oh nice..i heard about mr ramsey..im 46..i have no debt..i also rent and dont own

Reply by
rherce2002

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your just a bs...  if you can pay anything with cash, you dont need a higher credit score... credit score are for people who's trying to get credit and lender base it on the score. thats why its called "credit score" duh???  you have everything except brains hahaha...

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jcfors

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some ones jealous

Reply by
renrutekim39

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Amen brother!

Reply by
brighterfuture

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@gogreen1716: the thing about waiting is that the balance will be registered on your credit report, impacting your score.  If this balance is above 10 or 30% (depends on who you talk with) then it will negatively impact you score regardless if you pay the entire previous balance off.  Continue paying off the balance and keep the balance below 30% and your score should do fine - from what I learned.

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I agree, in addition to that applying for a job? They too need credit scores, what does that have to do with my work experience/history. Unemployed without meand to pay your way in life. Sounds like a system designed for failure and a way to wipe out middle class.  

Reply by
freesurfer

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Well I will tell you what you are doing wrong. 1st! A credit card is not for you with the way you pay off everything immediatly. What you need is a prepaid card preferably an HSBC that reports to all credit scoring systems. On that you will pay your heating bills, taxes, food bills, gas bills, electric bills, anything that is a monthly bill. In fact you can take all past bills you have ever paid that are monthly and turn them in as they are never reported to credit scoring systems! That is up to you to do otherwise everyone would have pretty decent credit.  You also have no revolving credit thats your problem. your holding at 700 because technically your ok but in the eyes of lenders you may only have good credit because you have never done much with it. 2nd dont pay everything off on your unsecured credit card! lenders hate that pay off 75-85% of it let it ride for a few months paying on it each month this tells them your not worried bout money and you can buy other things. you may be losing a few bucks a month but "THEY" are making money which is all they want. then they give you more positive points. any other questions i would be ever more happy to help.

Reply by
doganugurlu

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thanks for providing proof for my argument: Credit score, "your credit worthyness", is not an indicator of how well you manage your finances, it's an indicator of how much money you can make for the bank, with how low of a risk. 

You wouldn't make money for any bank, you're not worthy of credit. If you want credit, banks should charge you higher interest, you don't ever come around anyways! ;) they gotta make the most of those few transactions. ;)

Reply by
tonsoriel

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I agree BUT even better is what I do

Purchase with credit card get the insurance on the products because it was purchased on a credit card. And THEN use the INTREST FREE TERMS.

You MAKE money by using THEIR MONEY interest free all the while getting better credit ratings...

After all that when your credit rating is at the point where you can get a loan at a ridiculous rate refinance some property for 30 years.

Then MAKE MONEY again by investing that loan cash into something that gets a nice return MUCH more than the 4.5 percent loan rate. THEN pay it back as SLOOOOOOW as possible as your investment makes money and you pay back the loan with inflated dollars

MONEY in YOUR POCKET in both directions!

Reply by
Moochacha

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While it's true that credit scores are most often checked when we apply for credit or a loan, some employers are now checking credit scores, depending on the type of job we may be applying for, and if our credit history is non-existent, or poor, it may be cause for the potential employer to pass us by. Something to think about...

Reply by
ehw

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As a credit counselor volunteer, I would like to make a comment. Credit scores are based on how you handle credit not your net worth. With no history of using credit financial institutions have no history as to wehther they can make money on you. Why would I lend you money at some set interest rate only to have you pay back the principle within the time frame of me ever getting any interest. Credit scores are not only about if you are worthy of credit but also if I can make interest off of you. In your case, you should be very proud of your accomplishments and your disipline but understand why someone would not want to loan you money.

Reply by
hthree

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What is an HSBC?  A prepaid card to pay food, gas, electric?   Not sure how to do that.

Reply by
clarissa13

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I agree.

Reply by
judkinsfam

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Davey Ramsey!!!!!!!

Reply by
judkinsfam

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I am going through FPU right now, and I can't believe what a slave we have been to credit. We are breaking our chains, and thank God every day for leading us to the teachings of Dave.

Reply by
JDinFL

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I don't care what you pay cash for.  I don't care if you pay your telephone, electrity, garbage, sewage, water, rent or anything else that is not allowed to be reported on time or paid 29 days late.

It matters nothing to me what you pay cash for.

Credit is a different matter.  They don't care about what you can afford to pay for.  Why should anyone lend you money now when you have no history of repaying borrowed money?  No credit is worse that bad credit and if you have any good credit on your report, some of it can start going away after 10 years.

It is a combination of account types and credit limits that keep a score high, as long as you pay them and use them intelligently, such as no more than 10-20% of your credit cards.

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Reply by
JohnPublic

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That's an Amex Centurion Black Card, and you get it by spending at least $250k on an Amex Platinum in a rolling twelve-month period. It used to be invitation only, but, if you meet the requirements, you can ask to apply now (it's not that hard to put that much through a card if you have a business).

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Reply by
JohnPublic

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I'm in a similar situation, though - I have a mid-six-figure portfolio, but little experience with credit, only a twelve-month history - and no income beyond capital gains (which have been lousy in the past couple of years) on that portfolio - I'm 22 and retired - and can only get $1000-2000 lines of credit, although I expect that will increase twice a year or so (perfect history, just a thin file - I relied for a long time on the "cash only" philosophy, and missed out on massive cashback rewards - I would have probably made $10k cash back or have received 10 or more free round trip aeroplane tickets, depending on the card, in the past four years if I had used credit instead of cash, cheques, and debit.

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Reply by
JohnPublic

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And that's not counting signing bonuses. In the past month, I've made almost $500 in signing bonuses, and over $100 cash back on a cashflow of about $3k a month through credit cards (once I get higher limits, I'll put everything through plastic, so the only purpose my checking account will serve is to pay of CC bills). I never carry a balance. I own no property - I rent a townhouse for $830/month. I can't stand the price of taking care of a property or owning a house or paying for maintenance - I'm not going to mow lawns or do anything else outdoors, nor do any of that demeaning manual labour ****, no matter how "manly" it is  - or property and school taxes. Property is a really bad investment recently, although I don't see it getting much worse, so "buy low, sell high" probably applies now.

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vnes1

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I totally agree. Why are you complaining about your credit score? When technically speaking you obviously dont need anyone to loan you any money....???Am I missing something here like the whole point of credit  is to live the American Dream most people cant afford out right. I mean dont get me wrong yea i would figure you would have an 800 credit score with your 7 figures and loads of cash but boo hoo you dont and guess what you also dont need credit to live the good life appearently.

Reply by
gypsygal65

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Me and my husband are the same way, but we own a Construction co. a small one, I have only one credit card, in my company's name,  pay faithfully always in full, house and property are paid, all trucks are paid, I am so glad that in our 40"s we can breath now

Reply by
gypsygal65

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I checked my insurance credit score and it was an 849, do we have a sperate insurance score?

Reply by
dusvi

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Wow I thought I was the only one.....I'm in this same situation.  According to the credit companies my credit is not really that great, i get denied for credit cards left and right, but my credit habbits reflect yours exactly.....I can't stand the way these companies try to force you to play the game and tell you it is better to let creditors rape for a little cash rather than buy something outright.......

Reply by
jackieblue43

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No doubt.  Must be nice eh?  

Reply by
jackieblue43

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I was told that came about from people getting a job quick, paying for a few things and then quitting so employers or someone else came out with the idea that if your credit is bad, you wont stay on the job very long to make it worth hiring you since it supposedly costs so much to hire and train someone.

Reply by
jackieblue43

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They are a credit company.  They carried my loan for a vehicle several years back when I was being dumb about trading in vehicles every so often trying to get a better lower payment and interest rate.  Unfortunately, I didn't realize the stupidity of doing that by way of how you have to throw out a huge chunk of cash for tag, title and tax which you then just wasted only to do it again.

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Jst4uqt

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I couldn't agree more. I have yet to be late on payments or have a deregatory remark on my credit, am a young adult and my score should be higher than low to mid 700s. The two things holding me back are length of credit history and amount of credit lines.

As the future of america, I shouldn't have to overload my credit with more cards (I don't rack up debt, have plenty of savings, pay everything offi n advance and in totality) and be throddled becuase some stupid equation says that I ahve to have at least 8-12 credit lines to be "excellent"

Reply by
laveya

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I agree!  We are slaves to our credit reports!  And they in NO WAY reflect the accuracy of our financial responsibility.  I will vote for the man who runs for office and says he is going to FIX this problem!

Reply by
skippydog17

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BAD CREDIT  NOT BAD PEOPLE

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Reply by
cygnusx3

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Well said.  The corporate interests in this country want you to be indebted to them so they can continue to control your actions.  Further, I am struck by the replies the original poster received from those that are just envious of his position but most of all by Teejustice who has bought into the corporate proganda completely.

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Reply by
sheepdog21

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A 2002 study 79% of all credit reports contain errors...Actually 100% do..Bad credit scores not bad credit people

Reply by
clusterin

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You are absolutely correct.  there is no payoff for using cash.  All they care about is debt to credit card limit.  To increase your score, increase your credit card limits and get the denominatior elevated.

Reply by
clusterin

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Agree.  Paying in cash right away without using credit is not the way to work the system.  Pay with credit, use cash to pay off at each statement date.  Most online payment plans allow you to schedule a payday a few days before your bill is due.  This way, you get miles, cash back etc....  Using cash immediately is NOT the best way to work the system.  Remember not to use your credit more that 10% of your limit or it hurts your credit.  Spread the charges over cards to maximize their impact

Reply by
rfriel

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why do you care about your credit score, you dont need credit, why are you on this site anyway, sounds like your telling us a fantasy instead of your own dismal reality. if you were really that well off, you wouldn't be on this site.

Reply by
rfriel

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do you really think people believe you? what? is that another dismal fantasy of your, people believe you. what are you on this site for anyway??

Reply by
summer5862

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This is so very true.......and tell me why in this complicated day of age.....why do we all "get so

severelyy measured" by only our credit/credit score.......I am a bill collector and I do not ever

ever measure a person's humanity or goodness by what their credit report shows........

This whole credit world is unnecessarily complicated and weighted to do nothing but make

the "Fat Cat's" richer than they already  are!  What ever happened to the "good old days" where

CASH  in hand actually mattered!!!!!!!!!!!!!!    A country that has grown in to debt to the point of almost a depression a few years back because this country is greedy and most people who

live in our great country live BEYOND THEIR MEANS because THEY CAN.......thanks to the fabulous banks who extend credit to people who have not enough to repay their debts!!!

Reply by
shh123

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If you alway's pay in cash you will never build a solid credit report.  You have to owe money and show that you can pay these bills on time every month (build a credit history) or your credit score will never go any higher. If you always pay in cash this will not happen. You need to prove that your able to pay your debts.

Reply by
Pandora65

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Why don't you view his post as something to strive for, man? I'm having to start all over again after a bankruptcy a few months ago. I want to be in his position, at my level, someday. How cool would that be? And it is true that the credit industry looks down on those who pay with cash when they can, but they will tear ya a new one if you fall on your butt, too. All I can say is to hope for the best, but prepare for the worst.

Reply by
Pandora65

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Amex will go after you personally if you sign for a card through a business (even if you are only an employee and have nothing to do with ownership of said business) if the business goes "tango uniform"...for no other reason, other than the fact that I'll never have a score to meet their requirements, would I EVER get one of their cards...and I heard that on a consumer talk radio show from the host himself...

Reply by
KingMotley

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Wow.  Maybe because he cares about his credit rating.  Maybe he's planning on buying a new (larger) house, a boat, a fancy car, co-signing for a student loan for his children, wants his credit score to be higher on job interviews, or maybe it is a sense of self pride or any number of other things.

I'm not in his exact situation, but I'm personally trying to figure out how my credit score is only 752, with no lates, 20 years of credit history, mortgage, 1% revolving debt, and a 10% debt to income ratio.  No matter what I select on the credit simulator, the number doesn't go up.  Personally, I like lower mortgage rates which is my I first started re-monitoring my credit, and I'll be purchasing a new car, partly with a loan in the next year or so, and I would like the interest rates on it to be as low as possible as well.

Reply by
brianathews

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You say that you save between 1800 and 2200 per month to use to pay down your debt and that you have payed down 18K in 6.5 months.....hmmmm maybe we went to different grammar schools but I was taught 2200 X 6.5 =14,300       So I'm calling BS on this one.  And I would love to know how a $1000 emergency fund would get you by for 500 days.  I hope you enjoy Ramon Noodle soup and using the sears catalog for TP cause 2 bucks a day ain't gonna cut it.  I do however give you points for trying.  At least you are on this site which could be a good start for you.  Bottom line is, spend less and save more.  Good luck and God speed to you and Muffie.

Reply by
brianathews

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The card you speak of is the American Express Centurian Card, AKA, "The Black Card" and yes, you do need to be invited to become a member.  The card is made of titanium and comes with a $5000.00 annual fee.  You are required to maintain an annual spend of at least $500,000 to keep the card.  It does come with some perks like 24hr concierge, special events available only to the members like meet and greets with sports teams or musicians, but just like a Rolex, you are paying for the name and the exclusivity of being able to hand the waiter at Ruths' Chris Steakhouse your metal black charge card in hopes he bows to you.  Don't get me wrong, if I was invited to be a Centurion Black Card member, I would except the invite it faster than you could say "pretentious jackass".

Reply by
jasystems

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This is  all due to Congress and the SCAM they have going as they lend aide to financial institutions when they make and break promises in order to keep us all in debt. You are NOT rewarded in paying your debt, instead, you are punished. The people that get rewarded are those that steal, rob and default, as they are all allowed to default, declare bankruptcy and start all over again ..... the system works  against those that protect it, in thi scase you and I. It instead helps those that do the least to rpay debts and act in a fiscally responsible manner. The 3 credit card companies have a point scoring system that is out of touch with modern financial needs and hasn't ben touched in over 30 years. Yet they all rely upon it because it makes money for the few that depend on the many. You are always punished, no matter what. It is the most blatent misuse of power that has ever been entrusted to any industry. I can get a loan faster from an out-of-country non-resident than a local/state bank. That is the sad reality of what a pure scam this country has become and there is only one group to blame - congress.

Reply by
trusso11783

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But only irresponsible morons fall for it. When I go to Macys or other department stores during the holidays, I will use or open an account being offered to me to get 20% off and buy my items. I then pay the bill right there and there, at the register. Instant 20% savings and I never use the card again until next year when they offer 10% off for using the card. They are betting we will be irresponsible and use the card. Usually they are right. But only irresponsible people do that. They dont make you use the card. People are weak, If they cannot control themselves, then they deserve to be in debt. Screw em. I dont have a lot of money but I certainly have no credit card or auto loan debt. Been there, done that.  Dont blame the credit card issuers. No one forces us to use the card.

Reply by
jnfr14

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Exactly right !!!!!!!!

Reply by
lioness45385

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jenklemmesten let me guess. your salary is or was in the three figures, correct?

Reply by
lioness45385

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twlyanntoniohunter, tell me more about the prepaid HSBC card?  they will report your payments IMMEDIATELY?

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There are some insurance companys that dont check your score,  now are they inyour state? Check around.what is vantage score my credit score is low due to having had a lot of doctors bills but the vantage score and insurability are high, why? 

Reply by
rwb1965

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****ed if you do or don't. carrying no credit is almost as bad as delinquent credit. bnanks want to use every avenue to be able to charge high intrest. Paying off cc don't help either, go figure..

Reply by
rwb1965

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Very true, Obama recently changed the rules, who did he change them for? Paying off your cc is not the thing to do, buy something, don't go over 50% of your limit, and pay it off in payments just over the min., and repeat, this will raise your score..

Reply by
rwb1965

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over time you have no credit history so if you get credit they can chrge high rates

Reply by
rwb1965

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Right

Reply by
kykels

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insurance inquirys are soft hits...

Reply by
alalineman

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Your in a rare group that doesnt need a credit score a "0" score wouldnt help you or hrt you for that matter. Youve have done the right things and could bankroll any purchases plus the power of cash will usually get you a better deal anyway. Im working on it hope to be apart of the group soon.

A credit score is for people are looking to in debt, This is a great web sight for a general overview. But it is sponsored largely by "loan shark" credit card companys.

Reply by
shaitand

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Yes it is ridiculous that inquiries are counted against you at all. Opening accounts should cause the drop not trying to open them. Inquiries also stay on your credit for an unreasonably long period of time.

Reply by
shaitand

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This is a private commercial system. The purpose isn't merely to determine if you are a responsible payer. This is a system for companies issuing credit to determine your quality (how good a choice you are for lending) that is about more than just whether or not you pay or can pay but also how much interest they are likely to get back if they loan to you.

Reply by
shaitand

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Sadly, credit score is used to get a home, get insurance, and get a job.

The scoring system is private and indicates not financial responsibility but a combination of ability to pay and indications that you will make payments over time and therefore be profitable for the lender.

I am not opposed to the lending industry having a scoring system that includes how likely you are to be profitable should they lend but they need to be forthright about it and discourage its use for evaluating financial responsiblity or responsibility in general. If they don't do so, then yes, legislation should be imposed.

It is more important to prevent discrimination in employment, shelter, and transportation than to protect some private industry.

Reply by
shaitand

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That is fine. Credit score therefore is not an indicator of financial or personal responsibility but rather an indicator of risk/profit potential for a credit lender. There is nothing wrong with that if that is publically expressed but it isn't.

You aren't taking credit when you rent an apartment or apply for a job and the misrepresentation that a score indicates finanacial and personal responsibility is why these industries are looking at it.

Someone indicated legislation to change scoring. I think that is extreme. A publically funded nationally televised information campaign discouraging private industry from choosing to use credit scores for anything but credit evaluation is good enough.

The parent who started this thread has plenty of liquid and hard assets he can leverage to get good rates despite his score should he need credit.

Reply by
shaitand

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What puts people in dire straits isn't buying things they can't afford. It is buying things they can afford in advance of being able to afford them. The vast majority of the population and the middle class lives pay check to pay check. You don't buy some big thing you can't afford. It's a little thing like getting gas this week instead of waiting till you get paid next week. Next week comes, you pay the gas off. So this time maybe you do school supplies and you've got another card so now you get gas on there (by filling early you failed to conserve gas like you normally would have and run out sooner). You start the next check with a bigger deficit.

Eventually you have a week with a big expense like maybe an insurance payment and can't catch up the card so you make a smaller payment with plans to catch up the next check... except you need gas. Now you are carrying a balance but its small. This repeats and goes on and on. But you've got multiple cards and low balances so your limits are extended and you slowly get deeper.

The only responsible use of credit cards is to not use them.

Reply by
d4rkened

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You credit score isn't a measure of your ability to repay debt, it is a measure of your ability to carry debt.

You get a high score by playing the game, not by being financially sound and responsible.

You can easily be 1 pay check away from defaulting on every single debt you have and still have a 750-800 credit score.

I too find it silly that your score isn't truly based on your ability to repay debt.

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Reply by
bernhardtra

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Your strategey at this point should be to continue exactly what you are doing except one thing.  You should wait until the bill prints to pay it off.  This utilization will report to the bureau.  Open a savings account and earn some interest on it.  Use or get a rewards card to pay for everything.  That $60,000 you spent on improvements would have netted between $600-$1200 as a return to you.  This will also insure that the credit card companies will increase your limits and thereby your score.  The savings account would add extra income to you.  If you wait until the last day possible to pay off the credit card, you will maximize the use of the money and the interest paid on the savings account. 

You might see a drop in your score if the utilization rate goes to high, even on any one card.  As the limits are increased this utilization will become lower and your score will increase.

If you have multiple rewards cards then spread the spending amongst them to avoid a decrease in the utilization rates overall.  However, if you want your limits higher, you will need to charge up to your limit occassionally.  Even if you pay it off before it the due date, the banks computer will notice how high you have charged it and allow limit increases.  This method won't affect the utilization rates and should have the same effects inregards to higher limits. 

By reporting a zero balance to your credit report it causes your score to be low, just as high usage does also.  Letting it report shows that you know how to use the credit you do have.  And if nothing else, utilizing the credit cards with rewards will reward you with the perks they offer.  Since you can manage the credit properly, you should take advantage of these rewards.  By not keeping the usage of the money you have for as long as you can means you are sacrificing the interest.  Even if you only make $50 extra year, this is a nice dinner out or the price of a hotel room. 

The rewards could actually be even higher it could have amounted to a vacation or at least the free ticket for the airlines. 

Just a few things for you to consider.

Reply by
lexy5427

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I work for an insurance company and one thing that I always make sure to tell our customers is that when we run an insurance score, it is considered a "soft inquiry" - there is no effect on the customers' credit score by running the report.

Reply by
DragonXDynasty

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What your doing is great and you should be comended on doing an excellent job.  Credit scores have less to do with debt and more to do with repaying the debt.  All the improvments you done with cash will not affect your credit score.  If you use a credit card for a purchase and pay it off when the credit card bill is due, that is also not helping raise your score. If you want your score to raise then purchase something with the credit card and take 3 to 6 months to pay it off. The credit companies want to see you following through and paying your debt on time consistently. With the way your now living i wouldn't change anything. I'd rather have low credit score with no debt than, high score drowning in debt.

Reply by
doowoplover534

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I'ts all planned that way. The more negatives the higher the interest rates the corporations will give you. Seems like COLLUSION  between the credit agencies and the companies extending credit.Monitor the reports and challenge anything you don't agree with

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Reply by
thegrunt286

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I agree on the insurance companies...makes it difficult to change companies if you are unhappy with your present one.  Are there ANY insurance companies that don't require a credit check?  I think if companies did that, they would get a lot of people switching to their company for the simple fact that a lot of us are not happy with our insurance companies.

Reply by
rollingscd

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I'm not sure that he really wants legislation... he simply pointed out that that may be the only way to change this system.

2 years for a hard inquiry does seem a little long.  Consider the person who is "offered" a credit increase (as happened to me).  I applied for the increas "due to my excellent credit", so they said.  The credit card company pulled my credit and denied the increase. 

So, now I get whacked twice: once for a hard inquiry that stays on my report for 2 years and again for being denied.  It seems to me if the inquiry is from an existing credit provider, you should not be assessed a hard inquiry (if you are not applying for an additional account, that is).

Reply by
walserb

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Yes well like I said to someone else...it is because their ****ed that they are not able to gauge you for money by charging people outrageous interest rates.Pretty much it is legalized robbery and the only way to stop it is for people to reduce the need to use such bad credit usage.

Reply by
Yahootie

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That sounds about par. Finger Hut re-opened my acct without me requesting to do so and when I closed it again, my credit score went down. I hate these shady companies. I was on a dating sight. (Plenty O Fish) and they re opened my acct as well. It makes theyer numbers look good so others will look at them a see the new numbers and think to themselves, wow , they must be a good group or good co., look at therey numbers. They should be penalized for such activities. It makes the consumers look bad just so they can look good. It cost the consumer but not the company reporting false numbers. What can we do?

Reply by
GregPWH

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I recommend you carry an American Express card and pay for things using the card and quickly pay off every couple of weeks.  Their website is super easy and allows regular payoffs.  By paying with cash you are missing out on Membership Rewards points that accrue on all dollars charged through the account.  I have all my utilities automatically charged to my AMEX.  With the membership rewards points you earn, you can purchase free "stuff" - you would be surprised at how quickly the points add up.....

Reply by
GregPWH

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Like you, I have a high net worth but carry near zero credit card debt.  

I recommend you carry an American Express card and pay for things using the card and quickly pay off every couple of weeks.  Their website is super easy and allows regular payoffs.  By paying with cash you are missing out on Membership Rewards points that accrue on all dollars charged through the account.  I have all my utilities automatically charged to my AMEX.  With the membership rewards points you earn, you can purchase free "stuff" - you would be surprised at how quickly the points add up.....

I also carry another low rate credit card (travel award points)  that I can use at retailers that don't like to take AMEX.  I pay it off online immediately too to avoid/limit any daily finance charges.

Reply by
mdcarver

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This is probably one of the most frustrating things about monitoring our credit scores. I was recently turned down for a car loan because Equifax was the agency my bank was working with. Even though my score was around 715, Equifax had me at 620 ... so I just went out and ;paid cash for my car.

Reply by
housebroke

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CK comments were helpful because now I know why my auto insurance went up and my score went down!

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Reply by
asa4ever

116 Contributions
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Helpful to 2 out of 2 people

Now that you have told hoiw wonderful you are, why bother us?

Reply by
dmlauffer

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High 700's is good. You basically qualify for the best rates on everything. 

Reply by
MKC5150

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Taking out the credit cards doesn't mean you have to use them. The more active credit you have available to yourself that you wisely use, i.e. pay off every month, the higher your scores will be. Food for thought.  MC--Mortgage Banker in St Louis, MO

Reply by
happybuddha

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Definitely ! Am an alien worker and I pay in taxes what an average American earns in a month. Yet, I couldn't get loan for a car. I couldn't proove my ability to pay my EMIs. My paystubs didnt matter either. I then was forced to use a credit card to build a proof that I can pay on time. My score went into the very high 700s. Then when I shopped for a car, I was not aware that it is supposed to be a hard pull. And my score dropped. Now, am I not allowed by the system to even shop for the best price ? It is appalling what Americans bear through and don't even complain ! 

Reply by
Animolies

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We are manipulated by the bbanking industry in order to create additional revenue, after all, it's actually against  the law for corportion to not use every method available, immoral or not,  to crete profit for the share holders.  We are but fodder.....what a perfct place for us to be....grazing material for the machine!

Reply by
CJHarleman

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This is essentially my issue as well.  Income to debt ration 1%, repayment history 100%. Credit score 627 because I only have one credit card and no mortgage, car loans, or other credit because I "gave it all up" for 'cash'.  Now, I am planning to remarry and my fiance has credit in the upper 700's.  So, even though I don't need or want 'credit' I am forced to play the game and get cards I will only fake to use (as in buy gas, pay off, buy groceries, pay off.....rinse and repeat) just so I won't damage HIS credit with our 'financial union'.

Reply by
porto2828

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If you are actually living the way you say, screw credit cards all together. Just pay cash! Credit Cards are a high interest loan, and apparently from your situation you dont need one.

Reply by
Star1320

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Larryaw, you are very very correct. It is time for a New Way. Our Financial Institutions and Draconian Ways are keeping our country in the Dark Ages and preventing us from flourishing!! 

Reply by
pcfanatic

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u are the apitomy of rude

Reply by
Manicho1

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Larry Law--You are right on -everyone suffers from the abusers --Credit Card companies,as well as banks make profits on late charges and fees,

Reply by
Loos95112

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That may be all very well and fine, but for those of us NOT in financial bliss, a credit score is very important. As a young woman working full time, paying bills on time, and going to school full time, it is extremely important to me. I would be happy to go ahead and swap if you would like.

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Helpful to 2 out of 2 people

The credit system is out dated and needs to be compltely redone. They add very little but points for the hard work but one small thing and BAM! 60 PTS GONE 

I have brought myself out of dept through consolidation and a score of 500.

I jnow have a score close to 800. It was a lot of work and its a job everyday to keep it high. 

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10 Contributions
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Helpful to 3 out of 3 people

what does charge-off means 

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Reply by
ktjojo74

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Helpful to 14 out of 14 people

charge off means that the original creditor has written the loan off of their books and has most likely sold it to a collection agency in an effort to lessen the damage. 

it also means you will most likely NEVER get a card or loan from that company again. 

For example. In 1993 I bought a brand new car that was co-signed by my then fiancee.  I was in an accident on the way home from the dealer and totalled the car.  Yes the same day i bought it. 

Well, the bank was first interstate now wells fargo.  There was an insurance issue and the vehicle was listed as a charge-off 4 months after the  accident.  I had to get a lawyer because of how the bank handled the sale of the vehicle. I won $10k for bad faith.  But to this day Wells Fargo will not approve me for a loan. 

Does that make sense?

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Helpful to 1 out of 1 people

We filed for bancruptcy in 8-2003. The bancruptcy should be coming off of our credit report this year... Should we wait until that is off of our credit report to refinance our mtg? Or will it really make that much of a difference in our credit score. We are paying 7% interest right now and would like to take advantage of the low interest rates , but we want to get the best rate possible.

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Reply by
asa4ever

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Helpful to 2 out of 2 people

If you have a personal banker, ask him or her.  My son has a bankrupcy and 5 late mortgage payments on his report and still has a score of 702.  Go figure.

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Reply by
Martinho69

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Your credit score could jump as much as 50 points after the BK is gone.

So I would hold out so you can get a better rate.

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Helpful to 12 out of 13 people

If you want an excellent credit score, there's just a few simple steps to follow.

1) Borrow ****loads of money.

2) Pay debtors on time.

3) Go to step 1.

Reply by
Bartell

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Helpful to 3 out of 5 people

Pay "debtors" on time sounds wrong. You mean creditors I'd think.

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Helpful to 9 out of 9 people

Lets say I applied for a credit card. Is it possible for the lender to tell me what reporting agency they check before they actually do a hard inquiry?? My equifax score is 784 and my Transunion is 755 both through FICO. My CK score is a 750 I'm still hesistant because I hear of people with stellar credit getting declined all of the time. I don't want to risk my score for an approval that's not guaranteed. I think its good to know who they're checkin before they check. Holla

Reply by
Cidaroni

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Helpful to 12 out of 14 people

Check www.whogavemecredit.com or the "credit pulls" database in the forums section of www.creditboards.com.  Both of those allow you to search databases that show which creditors pulled which credit bureaus when people applied for accounts with them.  I like the credit boards site better since it allows more search options.

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