How does one get credit?

[R8RFAN]

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

[Dayze]

Originally Posted by 3rd&48ers

The way I keep my spending in check is I pay the credit card off every damn week (yea it sounds anal but it's free to do so) This prevents me from over spending... My direct deposit goes in on friday morn... I usually pay credit card off every wed night before I go to work.

I usually immediately come home and transfer what I just charged into a different account from our primary checking etc; then when the bill comes, I pay it.

but I'll probably also do the weekly thing too lol. I hate cc debt after all the crap we've been through.

[Kidd Lex]

Originally Posted by Stewie

My credit score is available through my CC company. I score 849 out of 850. What the hell? Did I put a stamp upside down on an envelope? How do you have a perfect score minus one point? I can look at my history and everything is perfect.

Inquiries?

[Chiefs4TheWin]

I'm sure it's been answered, but I can't go through 10 pages lol. The answer is you pay stuff off too fast! That's pretty much it in a nut shell.

[Kidd Lex]

Originally Posted by EyePod

Why do you need credit? You have a paid off house and can live off <$30k easy. Retire early and screw credit. You can always open a HELOC if you needed cash in an emergency.

http://mrmoneymustache.com

PM me if you have any other questions.

Anyone else ever hear of this cat?

[ThaVirus]

There seems to be a lot of misinformation out there about building good credit.

When I was 20 I was looking into getting a credit card and was told to keep 35-45% balance at all times.

This thread seems to imply that you should keep as little as possible on your card/pay it off in full every month.

I've also been told you don't even build any credit with a credit card.

I don't know what to believe...

[Kidd Lex]

Originally Posted by ThaVirus

There seems to be a lot of misinformation out there about building good credit.

When I was 20 I was looking into getting a credit card and was told to keep 35-45% balance at all times.

This thread seems to imply that you should keep as little as possible on your card/pay it off in full every month.

I've also been told you don't even build any credit with a credit card.

I don't know what to believe...

My credit score went way up using this approach, although I am sure some sort of car/student loan with revolving balance is important to grow your credit score as well. The keeping 35% balance sounds like something credit lobbyist would sell, its complete bs imo unless you have no other form of revolving balance. Hope that made sense.

[Jewish Rabbi]

Originally Posted by The God Hypothesis

My base is just under $200k with some bonus potential.

My debt consists of wives daily driver which is 18 months from payoff, but at 0% why pay early? I also owe about $200K on my house that has a 30 year mortgage at 3%, and has about $100K of equity.

Credit rating is around 800, I use my Chase to buy everything and reap the rewards at the end of the year in cash back, but I guarantee the wife and I spend money we wouldn't otherwise if cash based. I pay it off in full; every month without fail.

My question to the CP gurus is what to do next, pay off the 0% car just to get it over with, start paying off the mortgage, or start heavy investing in IRA's, mutual funds, etc...

My 401K is low six figures, have about $60K in stocks, and $75K in my online checking/money-market account.

I'm mid 30's, so I obviously need to get my retirement rolling, but I am at a total loss what to do next due to my low cost of money borrowed. Start heavy debt elimination, or heavy investing? The money in the bank is just losing value, although inflation is non-existent and the feds are taking steps to avoid deflation I hear.

It's a personal preference. With your mortgage rate right at inflation, I wouldn't feel like you need to pay that off. Same goes with the car, no need to pay it off early. Some people just don't feel comfortable holding debt, however.

I would make sure your company match is met in 401(k), then max out a Roth IRA for both you and your wife, max out your 401(k), then put whatever remaining in index funds, in that order.

[ThaVirus]

Originally Posted by The God Hypothesis

My credit score went way up using this approach, although I am sure some sort of car/student loan with revolving balance is important to grow your credit score as well. [B]The keeping 35% balance sounds like something credit lobbyist would sell[/B[, its complete bs imo unless you have no other form of revolving balance. Hope that made sense.

That's exactly what I thought. They want you to be paying interest every month or they don't make anything off of you..

I'm going to go back to paying my card off in full every month to see how that works out.

[Kidd Lex]

Originally Posted by Jewish Rabbi

It's a personal preference. With your mortgage rate right at inflation, I wouldn't feel like you need to pay that off. Same goes with the car, no need to pay it off early. Some people just don't feel comfortable holding debt, however.

I would make sure your company match is met in 401(k), then max out a Roth IRA for both you and your wife, max out your 401(k), then put whatever remaining in index funds, in that order.

Can you do Roth catch up all at once? Also would you suggest hiring a financial adviser, or use a site like Vanguard and do all this yourself. I read on these topics all the time but at the end of the day I get total paralysis by analysis, so I turn to CP, where everyone has their financial phd's.

[lewdog]

Originally Posted by The God Hypothesis

Can you do Roth catch up all at once? Also would you suggest hiring a financial adviser, or use a site like Vanguard and do all this yourself. I read on these topics all the time but at the end of the day I get total paralysis by analysis, so I turn to CP, where everyone has their financial phd's.

Originally Posted by Jewish Rabbi

It's a personal preference. With your mortgage rate right at inflation, I wouldn't feel like you need to pay that off. Same goes with the car, no need to pay it off early. Some people just don't feel comfortable holding debt, however.

I would make sure your company match is met in 401(k), then max out a Roth IRA for both you and your wife, max out your 401(k), then put whatever remaining in index funds, in that order.

I agree with all of this as well. You make quite a bit of money so no reason you shouldn't be maxing our your 401k and contribuiting the max to your Roth but if you can't do both, make sure you contribute enough to your 401k to get the highest match from your company as you can. Then contribute rest of money earmarked for retirement into a Roth. Calculate what you think you'll need in retirement per month, how long you might live in retirement and determine if you savings amount will meet your needs. There are many online calculators to help you with this.

If you feel like you are going to be into mostly low cost mutual funds or ETFs with investing, I'd just manage that yourself and re-balance maybe twice a year to keep within whatever risk you are comfortable with. If you plan to mix in quite a bit of individual stocks or make quite a bit of moves, a financial planner might be an option but I'm not sold that they get you ahead since you have to pay them a percentage of what you are making. If you plan to work quite a bit longer I'd manage much of that myself and get a financial planner later is your feel uncomfortable with how large your assets become over time.

[lewdog]

Originally Posted by The God Hypothesis

Can you do Roth catch up all at once? Also would you suggest hiring a financial adviser, or use a site like Vanguard and do all this yourself. I read on these topics all the time but at the end of the day I get total paralysis by analysis, so I turn to CP, where everyone has their financial phd's.

Sorry missed this but no, only 1k extra per year into Roth as catch up and must be put in before the due date of your tax return.

[vailpass]

Originally Posted by Stewie

My credit score is available through my CC company. I score 849 out of 850. What the hell? Did I put a stamp upside down on an envelope? How do you have a perfect score minus one point? I can look at my history and everything is perfect.

Because Chiefs

[Dayze]

"Retirement". Lulz. Good one.

[SAUTO]

Originally Posted by Dayze

"Retirement". Lulz. Good one.

It's what I'm working for.
Posted via Mobile Device

[vailpass]

Originally Posted by JASONSAUTO

It's what I'm working for.
Posted via Mobile Device

Semi retirement is where it's at...