Credit Trends

I completely agree! Heck, I didn't have the benefit of being added on someone's card before I got credit, but I'm only 22 and have a 770+ score! Being rich isn't living lavishly. It's all a mindset.

Actually, a lot of it has to do with not knowing what's out there.
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Are you a veteran with an honorable discharge? VA home loans give you a mortgage with low (620 or so) FICO requirements and no down payment or mortgage insurance requirement. If you're not, an FHA loan can do the same thing, just that you pay the mortgage insurance and a ridiculously low down payment. If you're not afraid to live in the countryside, you can do all of what an FHA loan does but via a USDA home loan.

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Otherwise, forget the rent for a minute... do you have and use a top-end smartphone (iPhone/Galaxy/etc) w/ a major carrier? That's $100 or more a month you're tossing up a bird's backside, when you can get a cheapie $50 unlocked smartphone and a $35/mo StraightTalk plan. *poof* - you now have $75/mo more to put towards a house down payment. Why are you buying all new clothes when a thrift store can provide a lot of decent clothing for next to nothing? I bet that if you looked deeper into your monthly spend, you'll find a lot of stuff you blow cash on which you shouldn't - from starbucks to fast food to the club to...?

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Long story short, even a millennial can buy a house, if he or she is willing to stick to a budget, know what programs to look for, and live below one's means wherever possible.

If they already went to a debt collection you can dispute them. Use reason as other and reason is no contract, contract cancelled. I was able to knock a few out once I learned this and it works for basically any debt but loans. This is because the agency you did owe, wrote you off on their taxes and sent your account to a collector to see if they can make money at that point of time.

Your credit score is inflated. That usually happens to first time credit holders. While your score may be high, you don't have a long credit history, which is a big thing people look for. It's better to have had credit for 5 years with a score of 700, than to have a credit history up to a year with a score of 750. 

If you're paying them off before they report, it is harming you more than helping.  Be cautious of paying back too often or too quickly.  And don't forget that your debt to income ratio is a high factor when being considered for loans, mortgages, financing, etc.  If it doesn't look like you're pulling more money into an account than you're spending on your bills each month your dti ratio might keep you from utilizing that good credit score,

Don't listen to anyone who tells you that paying off your credit cards 'harms' you. It is quite the opposite, NOT paying off your credit cards each month costs you money each month in the form of interest. You are better off to have a lower credit score and pay $0 in interest each year, than to have a slightly higher credit score and lose hundreds of dollars in interest each year just to 'improve' your credit score.

I had a Bankrupsy 5 years ago and thought I was doing the right thing so applied for every credit card that was offered to me.  I now have about 18 credit cards.  I'm never late with my payments but Im  living pay check to pay check and my score is very poor.  NOW WHAT?

Cogin, First off, a bankruptcy stays on your Credit Report for 10 yrs. (hit 1)  If you went and applied for every credit card offered (hit 2 to many). ..the Interest rates you have on those cards, I'm guessing are not below 15% (hit 3 all your payments go to interest and unless you are paying 3-4 times the minimum amt, you'll be drowning again in no time). Its never a good idea to close credit cards but I would suggest to you that you either take a finance class or find a CPA or financial counselor that would sit down with you and help figure out what your best course of action would be. Having 18 credit cards doesn't improve your credit score when you are taking them out right after filing bankruptcy, then it hurts you. Ask that Financial person, if in your case, it might not hurt so much to close some of them. I love to watch and listen to Susie Orman, there are others, just my preference. You can probably get some of her online shows on Youtube..Or just look on Youtube for financial guidance..Listen to several and see what makes the most sense to you. Hang in there, one day, with some work, your score will get back up there. Good Luck. 

Simplysue2u - FYI: Not always 10 years. A Chapter 7 bankruptcy stays on for 10 years, but a Chapter 13 stays on for only 7 (seven), due to the fact that you partially paid off the outstanding debts.

Dave Ramsey. He's rabidly anti debt because of personal history, a Christian, and he sells stuff. But a lot of his resources are free and the information is there for you to use as you see fit.

His brand also has a "foundations in personal finance" class that is available to high school kids, and another scaled to be appropriate for middle school age.

Marketing starts working on kids immediately, high time we offer the knowledge to defend themselves.

Aloha Folks,

Good morning. Your admission of your issues is the 1st biggest step on the road to a better place financially speaking. The closest thing I've ever seen to something like what you mention is Dave Ramsey. He is a nationally syndicated talk show host and a best sellers list famous author that talks about what you asked. He and his books and courses are the best financial education I've ever received. I've read 3 of his books and have listened to his talk show a lot. You can start off by going to your local library and borrowing some of his books for free. After that, I went to Amazon to buy some other gently used books and courses of his, which were worth every penny. It's hard to put it in a paragraph, but he deals with the A-Z's of financial literacy and if you've read up on him, you'll be in an AWESOME position not to repeat any of these types of mistakes ever again. Just my humble opinion, but I'm teaching my own kids what Dave taught me, so they aren't doomed to repeat the same mistakes I've made when I fell flat on my face since my parents didn't teach me fiscal and financial smarts. Take care and God Bless!

:)

Your life experience sounds exactly like mine, and I think you're spot on with the need for financial literacy education. I learned through my parents' habits which were...non-ideal. I had a really rough 5-6 years crawling out of the hole from my mistakes. I know better now, but I could have saved a lot of stress (and a lot of interest) had I learned lessons the "easy way" ahead of time.

Glad to hear things are better for you now as well.

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Because they want people to stay stupid with their thug rap booogaaaa boooogaaa violence and brutality racism stuff.

I concur with everything.  I have had my fair share of financial bombs and wins.  It wasnt until I was in my 40's that I actually grabbed the concept.  I am married with 6 children so believe me when I say when it came to paying a bill or buying food, shoes or doing the laundry that bill got pushed aside.  I have had several cars but I only paid off 2, 4 were repossessed, and well I still have one that I am paying for.  I am getting close to retirement and my mindset has changed .  I no longer make hasty decisions.  My feelings now if I don't have it now what is one more day to take into consideration everything that I am responsible for during the month, do I have enough emergency money to handle an additional expense if I have to.

That has kept me from falling into traps and pitfalls.  But after all that work I'm still not where I want to be.  So yes I agree, why not educate, equip, empower our youth BEFORE they get out into the world of adulthood giving them the financial confidence to build up credit wisely starting out instead of trying to tell them after the fact.  That seems redundant

<b>yeaah

I was in your position 10 years ago.  The only credit card I was approved for was Chevron/Texaco.  Generally, they are the easier to get cards and are a great way to re-establish your credit.  Your secured card will help as well.  Even if you don't need a gas card, I would suggest trying to get one.  You may want to wait for the hard inquiries to drop-off before trying to get a gas card.  Good luck! 

<b>naah

A personal loan is not a line of credit, so when you pay it off, you just pay it off. However, when you pay down a credit card balance to zero, your available credit will go up, causing your score to go up in turn.

A friend who worked at costco signed me up for an amex to boost her sign up participant numbers and there I was, 19, $10k limit amex. It ended HORRIBLY. I'm still making up for it five years later :-( At least you didn't dig yourself a whole as deep as I did. Had I known the things I know now back then, I'd be in a much different situation. I totally agree that working at a bank forces you to look at your own situation and better yourself. I started working in retail and my paychecks normally went back into what ever store I was working at. 

I'm seeing a lot of young people with this type of credit. A high score doesn't always equate to good credit, or even if you have a high score, lenders will not always pick up for a loan. Young people tend to have hyper inflated scores because in reality, they have no credit. 1 year of paying off your card is not good enough. Lenders don't really start taking you serious until you have had quite a few years under your belt. It took me about 3 years to get a good visa card from my credit union with a limit of $7500, and only then they did it after I had several installment loans that I paid off, and an auto loan. In the same way, not using your credit but having several open accounts is also bad. Lenders will the potential debt you could get into, and if you have 10 cards with $1000 limits each,  you have the potential debt of $10,000 and they actually take that into consideration when they look at your debt to income ratio. The best way is to open maybe 2 cards (major cards not store as they have high interest rates) and use them only occassionally being sure to pay them off in 1 month.

I had the same problem! I saw that  my credit score was high so I was thinking hmmm why not go and apply for a credit card, thought I could manage it but then temptation got out of hand. So my credit score is EXTREMELY low, very shortly after opening up the accounts. Its good to know that if I just pay off the balances and keep the balance lower than 30% my credit will shoot back up :)

I have children fifty years old that have yet to learn what you did in a few short years. You are an perfect example of one who uses their head for something besides growing hair.My congratulations to you and whoever raised you.

I'm 20 and my score is 770+, I've got 6 credit cards and always have utilization under 20%, often under 10%. I never spend money I don't have, I always pay in full. My lowest line of credit from any issuer is $6K, which I got when I was 17, at 19 I got a no set limit Amex.

Best advice: never carry a balance to the next month.

way to go! you tought a lot Thanks

Get rid of the credit cards. Get rid of the problem.

You forgot one simple thing in your practice. each new credit account splits your credit age average. So taking on that many accounts at once is what hurts your score. But good news is more account less of a split and the faster year lenght of credit goes up. Most people don't realize there is several factors to a heathy credit report. Also having to many types of the same line of credits will hurt you in the lenders eyes. Good example 1 visa,1 master card, 2 store cards, 1 personal loan. 1 morgage. If all your credits are loans it shows you got less borrowing potential, if all is revolving credit it shows you can max every thing out to fast. just few things to consider for a healthy porfolio

hawkne, you are incorrect.  One of the biggest impacts on a credit score is the length of credit history, which for young people, is usually very low.  In order to get the best score, you need to have at 7 years of credit history.  Another factor is number of accounts, also low for young people.  And credit utilization, which is directly impacted by your credit limit, which is almost always orders of magnitude lower for people with little credit history.  The other factor - number of inquiries in the last two years - is also high (lower score) for people just starting to utilize credit, since they have just started opening their accounts.  Basically, a person who is just starting to build his/her credit history has a terrible score.  I can tell you this from personal experience, as a person who has a relatively new credit history, with no late payments, and has been monitoring it like a hawk. 

hawkne, you are incorrect.  One of the biggest impacts on a credit score is the length of credit history, which for young people, is usually very low.  In order to get the best score, you need to have at 7 years of credit history.  Another factor is number of accounts, also low for young people.  And credit utilization, which is directly impacted by your credit limit, which is almost always orders of magnitude lower for people with little credit history.  The other factor - number of inquiries in the last two years - is also high (lower score) for people just starting to utilize credit, since they have just started opening their accounts.  Basically, a person who is just starting to build his/her credit history has a terrible score.  I can tell you this from personal experience, as a person who has a relatively new credit history, with no late payments, and has been monitoring it like a hawk. 

 Keep your balance at 1/3 $1000 credit line at $300 credit utilazatuion. my credit limit is $3300 with only three CC. My spending limit is $130 a card a month $490 or less total a month.... My Fico is 750 to 785.... credit utilazatuion is (A) less then 9% a month .....

I turned 18 in Nov 2012. I got my fist card the (Discover). That summer I got a card through my Credit union. Last fall I got a BOA card. This March I got that limit raised to 5,000. This week I got approved for a Chase Saphire Rewards Card. Total credit avaliable is $14,500. I havwe a 745 credit score. I will be 21 next month. 

Opening a new account lowers your time with a card, thus affecting your score negatively. The longer you have a card the better. Example if you have 1 card for 8 years Your average is 8 years. Open another new card and now your average time with 2 cards is 4 years. The longer you have a card the better.

Enter Your Reply How true!! I am 57 and did not learn my credit lessons until I was 54 so congrats to you on learning at a young age

Sounds to me like hawkne is a little butt mad at his own score... I'm "young" but have 5 years of solid credit and a great score. sucks to suck :p

The problem here is buying everything on cash. Cas has no money trail, and therefor leaves you with no credit history. It would be wise to get a small credit card, and use under 30% of your limit, paying it off monthly with your cash. This leaves a money trail, eg., your credit history. 

I have friends who believe that having everything paid for in cash and no credit cards or loans is the way to live, and yes, that would be ideal, but what happens when you suddenly need a line of credit to buy a home, a large purchase (appliances) or need to pay medical bills. You suddenly need a loan and lenders cannot know whether they can trust you to payback a loan without a history, and you may not be granted the loan. 

I have built my credit back up from my low score due to  delinquencies from my abusive ex. He ruined my credit, and it has taken me about 4 years to fix my credit. My scored was up to 719 in Nov 2016, and I was able to get a loan and buy my first Home. I also was finally able to get a decent credit card. My previous one was a 250 dollar limit First Premier card with monthly and annual fees (those without credit have to pay to start building credit) Currently my score is 675, since I just got a new mortgage,  but I  applied and got two other major credit cards, and cancelled my First Premier one finally, after 7 years usuing that one. My score will take a little time to get back up past 700, but I don't need the credit now, having made my home purchase and currently having 5100$ credit limit, which I use responsibly, keeping my limit under 20%, and paying them off every month on time. I am sure my credit will be back up in 3 months. 

It is important to have some type of credit history. You can get a small credit limit card, and since you have a low credit score, you might only qualify for one that you have to pay an annual fee for. Start somewhere, keep your balance low, pay off monthly, and in a few years, you will have enough credit and history to be able to get any type of loan you need. On just a 250$ credit limit and 7 years with that one card, I overcame my delinquencies (which happened actually about 4 years ago) and got a score of 697. My score took me a few years to bring up, because I had no idea about keeping utilization low until about 5 months ago. If you follow all the correct advise, your score can be up in mid 600s in about a year. You can do it too. Just be consistent. 

Pay the debt then ask the creditor to report it as paid to the credit bureaus if they do not put in a dispute with credit Karma they will dispute it for you.  The creditor has 30 days to respond and fix it.

If you have a grandparent or someone who has a very old account, get them to put you as an authorized user and it will skyrocket your length of history and ontime payments.  Then contact the dental company with a goodwill letter just simply asking if you could please have it taken off.  The worst thing they can do is say no, but they usually have no problems if you're polite.  If the dental bill is in collections or is charged off, don't contact them.  Just wait for it to fall off unless it is brand new.  Then get yourself a couple secured cards and up your available credit, use them just for gas and things and pay them off each month.  Within a month you can have 100 pts added just from some simple measures.