Responsible Behavior Punished by FICO Scoring

Discussion in 'The Okie Corral' started by MurrayNevada, Oct 19, 2020.

  1. ReaPer105

    ReaPer105

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    I accidentally stumbled on the secret. Last time we bought a car the young lady said ours was 840-something. 850 is the highest possible.
    I can't tell you the secret because I don't know exactly what we did right. I didn't think I made enough money to get in that range. My wife pays all the bills and I reckon she's been doing a good job of it!
     
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  2. czsmithGT

    czsmithGT

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    I never said nor implied that adding credit cards would raise your score in the short term. I never said canceling a credit card would not potentially drop your score. I never said maxing out a credit card would not drop your score.

    I know how things work because I know my credit scores and I know how they are impacted from month to month based on what I do.

    I know that a low % credit utilization is good for your score whether your available credit is $20,000 or $200,000. I know that 0% credit utilization is better than 10%.

    I know that every time you apply for a new credit card or for a loan your score will drop for a while.

    I know that canceling your oldest credit cards will probably negatively impact your score.

    I know that having a mix of credit cards and revolving credit is generally better for your score than having no active revolving credit.

    I know that using credit cards responsibly (paying them off in full every month) and using cards that have cash back of 2-5% on your purchases saves you money versus paying for everything in cash.

    I know that a lot of people don’t understand these things and I know a lot of people who borrow money they can’t pay back and wonder why their cars and houses are repossessed.
     
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  3. mmcbeat

    mmcbeat

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    Same thing if you apply for a car loan or other loan, known as. “hard hit” and slightly impacts your score for usually two years then drops off. Auto finance guys at the dealerships are famous for shopping for rates and checking with several lenders, maybe 5-6 minor hits to your score can add up.
     
  4. czsmithGT

    czsmithGT

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    Income does not affect credit score. It will affect how much you can borrow.
     
  5. czsmithGT

    czsmithGT

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    Several inquiries of different lenders for one loan should only result in one “hard” hit. If it results in several, it should be disputed with the credit reporting agency.
     
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  6. Green Dragoon

    Green Dragoon

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    Not many understand this. I explain to people that it shows how a person manages debt.
     
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  7. TheDreadnought

    TheDreadnought

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    It is a wonky calculation though. My score fluctuates between 815 and 835, depending how much I charged that month, even though I pay it all off at the end of every month.

    Score.JPG


    But, because I'm always shopping for the best deal on cards and financing, they ding me on account age.

    Score Details.JPG

    I could see being sketchy about it for someone who doesn't have more than a couple years of credit history. But if you have decades, why does this even matter?

    Whatevs. If people will give you a loan at a decent rate, don't worry about it.
     
  8. czsmithGT

    czsmithGT

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    Most credit card companies report your balance monthly on their closing date. If you have a balance on closing but then pay it off in total before the due date, your credit report will only reflect the balance at closing. For the best credit utilization you have to have a zero balance on all credit cards on their closing dates, not on the payment due date. But really it isn’t going to make a lot of difference- it isn’t like missing a payment and generally would not impact credit utilization much. Of course there are always exceptions like if you have a low credit limit and make a big purchase that shows up on your closing balance even though you pay it all off prior to the payment due date.
     
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  9. Hef

    Hef

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    Whomever made that credit decision against you is a fool.
     
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  10. rj1939

    rj1939

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    I got credit ratings as a come on for a program I used...........I liked how that every time a vehicle got paid off, my score dropped and of course they "suggested" keeping a line of credit going. I buy cars that last, not ones that are lucky to only last until the final payment. That eliminates the Not-so-Big Three.
     
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  11. IamtheNRA

    IamtheNRA

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    www.creditboards.com
     
  12. IamtheNRA

    IamtheNRA

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    To get the best possible score:

    Payments: 100% on time
    Revolving Credit Utilization: Around 2 or 3% (actually better than 0%)
    Age: The more age, the better

    Beyond that, it's just a few points here and there.

    I went from CRAP ~550 to GREAT ~730 in about a year. It's not hard if you know how to game the system.
     
  13. Valor1

    Valor1 Range Bum

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    they want everybody in debt so they make more money. i always make straight payments making my credit score like a statue (not moving up or down).
     
  14. mmcbeat

    mmcbeat

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    In theory you are absolutely right, but it happens and it can be hard to almost impossible to dispute.
     
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  15. IamtheNRA

    IamtheNRA

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    Two words: Dave Ramsey
     
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  16. SleeperSS

    SleeperSS

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    Why bother. There are always the haters that have nothing positive to say about his program.
     
  17. IamtheNRA

    IamtheNRA

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    When I was thinking of getting rid of my credit cards and sticking to debit only, I worried about being able to rent a car, but Dollar takes debit and has all the same cars the others do.
     
  18. Sharkey

    Sharkey

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    Well what should happen and what happens are not always the same thing. For all I know the insurance company is lying to charge a higher rate? The bottom line is people that actually try to have good credit and pay their bills get screwed. I just got my property tax bill and as I was driving around potholes in the crap neighborhood where the early voting poll is located, I wondered why I was paying thru the nose. In TX, we have no state income tax so property taxes are really high. A lot of school buildings aren't being used now. You think the comptroller is gonna refund that money back to taxpayers? They are no better than the folks at the 3 credit bureaus.
     
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  19. screwman

    screwman

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    My parents died not having any credit. They financed their house in 1946 and paid it off in 1960. They wouldn’t buy a car till they saved up the money and paid cash. They had a couple credit cards, but paid ‘em every month.
    Depression kids.
     
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  20. Sharkey

    Sharkey

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    Ramsey helps a lot of people but he is not the end all be all in handling your finances. The reality is some debt is a good to have to build your credit. The problem is most people aren't happy with that and want what the neighbors have. I invested in 4 multi family properties. We sold one and are investing in 2 more. I ended up doing a refi on mortgage to invest in 1 property. Now Ramsey would definitely be against that. If I get a 20% return on investment (that was off the 1st property) than the 3% on the mortgage is not that big of a deal. The refi provided liquidity I did not have to make another investment. We might end up making more on the actual property we used the refi for but we are at least a year out on selling it. The quarterly distribution is nice though. Once we sell, we'll find another and do it all over again.