61 People Helped
Member Since: June 2012
For the folks who use payday loans a few times a year....next time you pay one off, open an account at a different bank, and for the following 2-3 paychecks pretend you still have the payday loan, but make the "payment" to yourself in that savings account . Next time you need money you can "borrow" at least part of what you need from your personal "payday loan account" , pay yourself the fees, and by the end of the year you'll be a paycheck ahead & should never need a payday loan again.
Make sure you get a savings account that doesn't have monthly fees.
djopgenort's response was:
You might think about doing a small secured credit card with your local bank ($300). then just use that credit card for small stuff -- your weekly Starbucks or something. Set it up to pay automatically from your bank account a few days BEFORE it's due. In a year ask the same bank for a "real" credit card. A year later snicker at the 5+ credit card offers per week that flood your mailbox. Keep the secured credit card if you like, since it will add "age" to your credit card mix. This is the only mistake I made --I let my bank close out my secured card when they replaced it with a "real" one.
This whole routine is a bit time-consuming, but it's how the game is played. I started a bit over 2 years ago with a ZERO credit rating (never had any debt), now have @769.
djopgenort's reply was:
More credit cards will help FOR THAT INDICATOR, but total number of credit cards plays only a very small part in your overall score. I have an "F" in total number of credit cars (only 5), but still an "A" overall, because the few cards I have have been paid on time 100% of the time for 24+ months. Credit Karma seems to make it's money by getting people to sign up for credit cards, so there is a bias toward convincing people to sign up for (21+???) credit cards.
I did something similar that put 60% utilization on one card because of an offer of 0% interest for a year. It hasn't seemed to affect my credit score
(BTW, the "pay off" money is in an investment account for the year where it will sit until Dec. when I will pay off the 0% "loan" - I'm not about to get stuck when the rate goes up!).
Would a mortgage on income property theoretically count as DTI? or is that treated differently since it's really a business expense? It doesn't really matter to me right now (private money loan, so not recorded anywhere), but I am sort of wondering how my DTI would be affected if I re-fi with a conventional lender at some point