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.

Just that one and I pay it off in full every month, Should I keep a 10 dollar balance on it or something?

The more you have open and current the better I guess. The logic doesn't make sense to me either.

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.

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.

do you have an income?

So what do I do? Go borrow money I don't need and just pay it back to get credit?

No, having it is a good thing.

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.

High 5 figures to low 6 figures per yr

It's set at 4k limit.. is that too low?

You can....yeah. It can be as simple as taking out a $2000 loan....putting the money into a savings account and then making the monthly payments every month. You'll lose a little money in the interest you pay over the loan....but it will build your credit history.

The older your credit lines are also plays into your score.

You COULD...but it might be cheaper to just pay the high interest rates for having bad credit.

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.

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.

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

Yeah, probably. Just call and ask them to raise the limit. I'm sure they will.

Where should I go? My local bank where I have my money at... I heard once you should never have loans where you bank is there any truth to this?

This.

Having a line of credit for 3-4 years looks better.

:spock:

myfico.com forums suggest keeping about a 10-15% of limit balance to keep score high

Go wherever give you the lowest rate.

Link to the Dave Ramsey baby steps?

F that mess

i have had the card for like 10 years and never had a late payment of any kind on it... Weird thing is I go to creditkarma and it does not list that credit card on me and it's in my name.. are they not reporting it or is credit karma just not accurate?

That's weird. You DO use it, right? And it IS a credit card, not a debit card, right?

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.

Just make sure they don't have early payoff penalties tied to them.

Probably this:
# 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.

I have lived like this for years and it just pisses me off to all end to know how diciplined and responsible I am with money that I probably would struggle to get a 10k loan somewhere if God forbid I ever had too :cuss:

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.

So by law we are always allowed to pay off a loan at any time but the slimey bastards can penalize you for doing so?

That is real nice

That's what they told me, and I have a 799 credit score, also have a 12 inch penis, and I run a 4.3 fourty. #comeatmebro

Here is the book:
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.

I'd give you a loan mr R8ers

Think about it. The bank is loaning you the money because they want to make money (interest) off of you. If you pay it off early.....they penalize you because they aren't going to make that money. A lot of banks don't do it anymore.....but there are some that still do.

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+

I think that stuff falls off of your score after 5 years, right?

That is completely not true. Ridiculous.

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

I actually looked at some credit cards that said I had a high possibility of being approved for but they are shit cards that want 39 bucks a year for the privy of taking space up in my wallet...

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

Man I shudder to think about paying 24% interest on credit cards with 3k on them

im not 100% but i heard a similar call on a radio show i listened to and the host said even if you dont need it, secured loans are huge on your credit score....but yes i think 7 or 5...trying to cite it now

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

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.

try to find some with no fees - like credit union or open another savings at another local bank etc...

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

Mine jumped from the low 600s into the low 700s because I paid off about half of my debt. I still have 2 cards left to pay off and the student loans that are hanging over my head.

That sounds good right there.. I am not above doing this...

I heard paying the cards off is ok but don't close the account or it will actually hurt your score

There are tons of credit cards out there with no annual fee. Get a couple from different companies, buy some stuff and pay off the balance. It will raise your score.

http://www.capitalone.com/credit-cards/

The wife and I are friends with a younger couple who did precisely this after going through a bankruptcy. It apparently works.

I have thought about a Lowes card to buy something then pay it off.. That will probably work

Yep. Although I did close one of my credit cards because they refused to increase my limit and lower my interest rate even though I've been with them for 7 years.

Absolutely no need to carry a balance/pay interest. It won't necessarily hurt you, but it would be crazy to do so for the purpose of trying to raise your score.

True.

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.

I wanted to help build my score by using a credit card to pay off all of my monthly bills and then pay it off at the end of the month.....but my bills don't take ****ing credit cards as payments. Dicks.

Austin is rich, he does not need my chump change :D

All that I contribute to this forum, You guys should be stroking me a check

yeah, but do that with EVERYTHING

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).

Yep we are brainwashed into thinking we need a good FICO score. All that does is show the bank if you are a good little customer. Meaning you like to borrow money and you are pretty good at paying them when you tell you too.

The ultimate goal is to have a fico score of zero because that means you don't need to borrow money.

I've got a credit card with Wells Fargo that takes 3% of everything I purchase and applies it to the principal on my mortgage. Best credit card ever.

Yea I will probably try this...

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.

I don't need to borrow any money ..

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.

It all stays there for 7 years.....unless you have a judgement or a bankruptcy which can cause it to be there for 10.

Hell I don't even see a credit card without a yearly fee I qualify for :cuss:

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.

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.

Buy a Porsche; sell to Dane. pay off in full.

The FLAW is that you think you need to have a good credit score

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

Well I think it would be better to have it and not need it than the opposite.

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.

Well I tried to buy a new Harley with cash one day and they told me I didn't get a dime discount for buying it with cash so of course I walked (this has been several years ago when the economy was good, don't know how it would work today)

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.