How does one get credit?
Yall know the story about me... I am going to be a bit vague here..
#1 100% Debt Free #2 Low 6 figure savings #3 Mid 6 Figure retirement (401k) #4 No Credit Card debt #5 DTI (Debt to income ratio =0) #Paid 30 yr mortgage off in 5.5 years #Bought car on 4 year financing in 2005 paid off in 2 years #Bought Car with 4 year financing in 2002 also paid off in 2 years # Have 1 bank credit card (Visa) Pay off in full every month Income per year is High 5 figures to low 6 figures per year No bankruptcies or late payments ever on any thing I ever bought since the early 90's. I am not interested in buying anything or looking to buy anything but why is my credit score in the mid 600's and how do I get it to go up? I am fully prepared for a bunch of stupid comments that I am just going to filter through to get to the legitimate ones so fire away... I know there are a bunch of people on this forum that make good money and are pretty smart except for their choice in a football team so give me some pointers. Being Debt free is wonderful but if I ever choose to go buy someting like a stupid cell phone on a contract (which I haven't) I am going to be super pissed having that kind of coin and getting turned down... Fire away |
Do you have open credit cards with zero balances?
EDIT: Saw that you have one. |
you get credit by having lines of credit open. having a larger credit to debt ratio is better.
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The more you have open and current the better I guess. The logic doesn't make sense to me either.
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You won't get turned down for a cell phone if you went to get one. They'd ask you for a cash deposit. And I'm pretty sure that with a credit score in the mid 600s....they won't even require one of those.
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Credit report is a fraud. In order to get credit you have to create dept to pay off in time. When you have everything paid off and don't generate more credit debt then you just stay the same. It's ****ing dumb. Kids out of high school have to earn credit to start out in life and that meens they have to create debt to have credit. This is how I see it.
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do you have an income?
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Try to get your limit raised. That will help. The more credit you have available = better. The less debt you have against that available credit = better. |
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The older your credit lines are also plays into your score.
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Open some more high limit credit cards and keep them paid off or something. Yeah, I know, the way this thing works is absolutely reeruned. If they just looked at your situation they'd see that you can easily pay off whatever... |
two words: Title Loans.
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You need a few cards that carry a balance each month. They don't need to be high balance just keep the amount carried each month at 35 -40 percent of the card limit.
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dude - your FICO score is your " I love debt" Score or "I care what banks think of me" score
If you truly live debt free you shouldn't care about your FICO score Also Cell phone companies don't use the Traditional FICO they have an Industry specific credit calculation - but if I was debt free i'd probably look into something like Ting. We have been working the Dave Ramsey Baby steps for the past month and we should be debt free except the house by the end of the year. I have cancelled all my credit cards and I vow never to borrow money again - meaning I could give a flick about my FICO score.. Good luck to you |
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Having a line of credit for 3-4 years looks better. |
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Go take out some loans and pay them off within a year. My credit score is in the 800s.
I have zero CC debt, but i will take out loans for stuff like furniture from time to time even though i dont have to. |
It sounds like that card is a debit/credit card that's tied to your account. Those won't report the credit bureau.
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# Have 1 bank credit card (Visa) Pay off in full every month Only one card. Does it have a low limit? That hurts as well. Not having much credit extended to you/available to you makes it hard to get more credit. Makes sense to them. |
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5 years ago-ish; laid off; foreclosed; job making 45% less; horrible situation
2013; making more than i did in 2008; paid off 2 cars, sold the motorcycle; paid of 3 cards; just paid 1/2 of the remaining balance of 1 card; paying the next 1/2 here in a few weeks;. paid off another card in full last month. 2 cards to go that are interest and penalty fee because we got on a payment plan. should be 'done' by summer next year. and not have any debt. haven't used a card since 2008. aside from buying something online, then immediately going to my card site and paying it off/crediting it etc. |
By doing something, typically in a good way, obviously.
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That is real nice |
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http://www.amazon.com/The-Total-Mone...money+makeover I picked up the Kindle version for $10 He is on the Radio everyday too you can listen here: http://www.daveramsey.com - hes on for another 30min or so But here are the steps: Step 1- Save $1000 Emergency Fund Step 2- Pay off all Debts Smallest to Largest - using the funds you free up to add to the payment of the next debt - aka the debt snowball Step 3- Complete the ER fund with 3-6mo of savings Step 4- Put 15% of your income toward retirement Step 5 - Save for Kids' college Step 6 - Pay off House Early Step 7 - Become Wealthy and give a lot of it away Thats the VERY high level overview but the Key to step 1-3 is budgeting - give every dollar a name -- on paper - on purpose every month - Keep a $0 Budget meaning every dollar has a Job we are hooked We want to live like no one else so later we can live like no one else. |
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from what i understand you should have 3-4 credit cards that you charge things to (you can still pay them off) so they remain active....(unsecured aspect)
also, if it has been a while since you have had a secured loan (car or house etc...) you should try and get a secure loan, even if you just pay it off...this could be the biggest factor in why your score is low. You might try to get a HELOC....use it once a year to make a large-ish purchase, then pay it off.....that may be all you need to do for the secured aspect. I think you are wise to want to raise your score. I'm in a similar position, but my score is now 750ish...I would like to try for 800+ |
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It would be stupid to purposefully carry a balance for the purpose of paying interest. |
Step 1- Save $1000 Emergency Fund--------Done X 100+
Step 2- Pay off all Debts Smallest to Largest - using the funds you free up to add to the payment of the next debt - aka the debt snowball---Done, Years ago Step 3- Complete the ER fund with 3-6mo of savings--- Done several times over Step 4- Put 15% of your income toward retirement--- 15% 90% OF THE YEAR 25% when I feel frisky Step 5 - Save for Kids' college---- Got it covered, Daughter not interested in being a brain surgeon Step 6 - Pay off House Early--- Done... Step 7 - Become Wealthy and give a lot of it away ---- Already give alot away, I pay the hell out of taxes while others sit on their ass and play xbox |
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The system sucks if you ask me |
http://www.clarkhoward.com/news/clar...t-score/nTWGX/
a quick blurb, but around 45% (15+30) has to do with number of lines, utilation rate, and open accounts vs closed.......i think you could raise your score pretty drastically by just having more accounts, higher limits and keepingyour utilaztion rate at zero like it is now.......just use them every few months and pay them off. ill try to find a link about the secured aspect |
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Oh, like a year ago my credit was like 699 then it dropped to mid 600's and I haven't done a damn thing
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I think a buddy of mine has a 800 score; he's debt free etc; he just uses 3 cards; and rotates them each month in terms of what he buys, then pays off.
he'll use card A for a month for food, gas, etc. then card B for the same thing etc. I'm sure there are other things he does to improve it, but it seems like that helps significantly. |
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also if you shop at home depot or something...even dept store cards will work... you just need something you can use once in a while |
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That sounds good right there.. I am not above doing this... |
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http://www.capitalone.com/credit-cards/ |
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i think my buddy has also done the same thing with like a Best Buy card etc; he'll 'buy' a TV with the CC, then go home, log in and pay it off in a day or two. Same thing at Lowes (Lawn mower) etc.
He said something to the effec that he'll use a card for everything he can pay off in full, without penalty. I might be mis-speaking a bit, but you get the idea. |
Donate a $1000 per month to CP and pay for it with a credit card.
Problem solved. |
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All that I contribute to this forum, You guys should be stroking me a check |
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Get some kind of card that gives a cashback reward, such as my costco amex or my wells fargo visa. There's no annual fee and I just charge everything I can to the cards - all groceries, gas, bills, everything that is eligible. I just pay them off at the end of the month. I pay no interest and I get 1% back on everything from both of them (sometimes up to 3% back from the amex, depending on what I buy). |
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The ultimate goal is to have a fico score of zero because that means you don't need to borrow money. |
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Thanks to all of you. |
If you really want to have a high credit score, put everything on credit cards. Seriously.
It will take a while to build up your average age of accounts, so your score may take a short term hit, but will benefit in the long run. Make sure to pay them off every month though. |
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I get the FICO thing but it should also go by the Debt to credit ratio thing The system is flawed and penalizes disciplined savers |
You dont need to carry a balance at all. Just open up 2-3 more credit cards with no monthly or yearly fees and let them sit.
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Did I miss why you are wanting good credit? The only thing I can think of is some insurance companies factor in your credit score. It seems to me you are well off without a decent credit score.
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If you don't want to spend the rest of your living month to month this is the best advice you will ever find.
I have not had a credit card in at least 5 years. It is silly to maintain a bunch of credit crds to keep a high FICO score if your long term goal is to be financially healthy and independent. Quote:
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Buy a Porsche; sell to Dane. pay off in full.
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It only Penalizes you if you need to borrow money - from what you say it seems like you don't need to borrow any. I don't understand why you are obsessed with your FICO score. You can usually get a substantial discount no matter what you're buying if you take your cash out of your wallet ask for a discount or tell them you're going to walk - watch their mouth drool |
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I am blessed and very grateful for the ability to take care of my family. Everything I own is average. Average cars, boat, Home.. It takes me days to buy something for myself that costs 100 bucks, I think it's some sort of mental problem with me. But when I was a kid my family was dirt poor, My mom cooked in a restaurant and my Dad (who died in 1981) never made over 6.50 per hour in his whole life that I know of... I have nobody to turn to in life if I ever needed money. |
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I couldn't get mine above 720 until I decided to run a balance on my credit cards for a few months and then pay the balance off. I've done that a couple of times and my score is 805 now. Forever I paid the balance off every month and my credit score wouldn't change. It seems a little silly now, considering the fact that I have about 80K in my savings account now but I can't refinance my home with that high of a credit score because my mortgage with BOA wasn't sold to Fannie Mae or Freddie Mac. Banks punish people for being responsible and paying their bills on time every month yet will refinance and modify loans for all of the people that are months behind on their mortgage and borrowed more than they can afford.
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