Credit Score Question

Sanrith Descartes

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What features does it give that makes it worth taking/keeping?
I get all three credit reports each month plus credit scores. It also provides monitoring and alerts of pretty much anything that touches my credit with all three agencies.
 
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Siliconemelons

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Monitoring credit is useful when the cable company decides you owe them some random price of equipment you never had, they never asked for and it somehow magically gets to collections.
 
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Sanrith Descartes

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As is obvious, everyone is in a different socio-economic position. If you are somewhere in life that 10-12$ a month is disposable income, I have found that it can be worth its weight in gold. Seeing if someone pinged your credit and why, making sure nothing "mysteriously" appears on one of your 3 reports etc is so much easier to deal with "before" you are making a big purchase. There is little worse than applying for the mortgage and hearing "what about this unpaid $125 debt Comcast says you owe?". It is so much better handling it with no time pressure when you notice it hit your credit 6 months before you decide to buy a house.
 

Siliconemelons

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Correct, and yes- to many the additional cost is a burden etc. And that is understandable- this board varies GREATLY in income brackets.

Yet we have the commonality of a common balance...

Our love for elf pixles al la EQ!
 

Sanrith Descartes

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The thing about gamers is we all know (to some degree or another) how to figure out the system and min/max it. Your credit score is no different really. Its a formula. Learn to understand it as best you can and game the shit out of it. Know the cardinal rules and never break them.

Dont be late on a payment. Ever. And known what late means. "Most" companies have a grace period before they report it as being a late. Know the grace periods.

Challenge every single blemish on your reports. Even if it's a valid ding, if the company doesnt respond in time or properly to your dispute, it gets removed.

Evaluate your open credit cards. Only keep good ones. That gas station card you got 15 years ago with the 200$ limit? Hopefully you have better by now and it is taking up a slot in your open cards. There is a magic number (5 or 6) of cards. Too many becomes a detriment (just like too few).

Understand your credit score is really nothing more than your "risk" score. That is what it really should be called. How risky is it for someone to loan you money. What are the odds you are going to default if they loan you money. So when you look at it in those terms, a guy with 9 credit cards all maxed out is a much higher default risk that a guy with 4 and zero balance on all of them. Everything you do affects how "risky" you look to a bank.

Ps... dont be fucking late on your payments.
 

fris

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Too many cards dont have a negative affect. No reason to cancel a card unless it has a high annual fee you cant justify, many will let you convert the card to a no fee version, keeping the age on the account.

One aspect of your credit score is age of all accounts. If you cancel your oldest account, the average age will be lowered and thus lower your credit score.
 

Sanrith Descartes

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Too many cards dont have a negative affect. No reason to cancel a card unless it has a high annual fee you cant justify, many will let you convert the card to a no fee version, keeping the age on the account.

One aspect of your credit score is age of all accounts. If you cancel your oldest account, the average age will be lowered and thus lower your credit score.
My bad. You are correct. At one point many moons ago there was a prevailing thought that the number of cards was a factor. I knew better and typed it anyway. I an old enough to remember when the FICO formula was kept as secret as the formula for Coke.

You are also correct on length of open accounts. Once my credit (and my business' credit) was established I moved off of retail type cards since they tend to have much smaller credit lines in general. I also agree that cards with fees tend to be something to avoid. Most of their benefits dont outweigh the fee (which of course is why banks make money).
 

Captain Suave

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Too many cards dont have a negative affect.

At one point many moons ago there was a prevailing thought that the number of cards was a factor.

I have one credit card, which is my only debt (paid off each month). I have seen reports stating that my score is lower than it might otherwise be due to "insufficient use of revolving credit". My score is 800+ and I don't need credit anyway (except for rental applications) so this does not actually effect me, but it's still a thing.
 
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BrutulTM

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Credit score is a terrible vanity project, especially if it costs you money. Nobody sees it. Just tell people your score is 800. No one knows but you and the best way to save on interest is to not borrow money. If you're about to apply for a mortgage or something it might be worth worrying about, but I get the impression most people in this thread are just whacking off to their credit karma app.
 

Asshat Bubbles

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could someone explain to me what a credit score is and how it's calculated? here in socialist EU if I want to lease a car for example, all I have to do it give the bank my income info for the past 12 months and that's it.
 

OneofOne

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could someone explain to me what a credit score is and how it's calculated? here in socialist EU if I want to lease a car for example, all I have to do it give the bank my income info for the past 12 months and that's it.

It's just an accumulation of your credit history. Number of open credit lines - credit cards, loans, and closed credit lines (car, home, school, personal loans paid off). Plus your length of credit history, payment status (do you make payments late?), credit inquiries (too many inquires without corresponding new credit lines is bad - means banks/whoever isn't interested in loaning to you). IE do you have a good history of paying back money you borrow, and being responsible with your credit lines.

It's kinda stupid in some ways. As per most modern persons, I live off a credit card I zero out monthly so I can get my cash back reward (might as well, it's baked into all prices these days and you'd be foolish to leave that money on the table). But the larger your current credit card debt is as a percentage of your total credit limit between all lines, the more it's negative for your credit score. And this is reported monthly. So me for instance, I have $11k or so credit limit between 2 cards. Monthly I run up $1500-$2500 on one card as normal living expenses. So every damn month, my score takes a dive as I use up to 25% of my available credit (bad), yet I pay it in full every.single.month (good). I'm constantly yo-yo'ing between 790-805 credit score. Last month I put my gal's surgery on my credit card, and I lost 9 points. Even though I'm going to pay it in full in 2 weeks, it'll take longer to regain those 9 points than it did to lose 'em. In the scheme of things it doesn't even matter, but it's just one of those things that makes zero sense.

850 is max score, but the various tiers of shit, ok, good, awesome depends upon who's looking at the score. And some businesses divide it into 5 categories instead of 4. Long and short of it is, the higher the score, the more likely to get a loan, and the lower the interest rate (because you are less of a liability). Also, many home/apartment rentals and some jobs will look at your score to decide to rent to/hire you. The latter should be illegal imo, but it is what it is.
 

Asshat Bubbles

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this sounds like a totally insane system.
what if you're just out of uni and have a student loan for example. does that mean your chances of renting a place to live are hindered? Also when a 3rd party checks what your score is, do they see just the number or do they see anything else. Like, can they deduct from your score roughly what your income is and such.
 

Kithani

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In the US as long as you pay your rent and don’t have any bankruptcies I don’t think your chances of renting a place are that bad. You might not be able to buy a house as easily with shit credit. What happens in the EU if you go to lease that car but then don’t make the payments?
 

Captain Suave

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this sounds like a totally insane system.
what if you're just out of uni and have a student loan for example. does that mean your chances of renting a place to live are hindered? Also when a 3rd party checks what your score is, do they see just the number or do they see anything else. Like, can they deduct from your score roughly what your income is and such.

They get a lot more than your score. A credit report that goes to a landlord, for instance, would show everywhere you've ever lived as an adult, your history of credit card, mortgage, student, and car loan payments (not line-item purchases, just monthly payments), any other history of lines of credit or loans, if you have any liens on your income, have had any legal judgments against you, have ever had debt go to collections, or if you have ever declared bankruptcy. As far as income goes, they just straight up ask you what it is and require that you submit payment receipts from your employer to prove it. (Generally you have to authorize a report of this detail, but it's a requirement for things like a lease agreement.)

If you're a student you essentially have no history, and this can count against you. Young adults with no history will sometimes have a parent co-sign on a lease.
 
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Sanrith Descartes

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Your credit score is more than vanity. It is more than "can" you get a mortgage. The difference between the mortgage interest rate you get with 800+ vs 650 can amount to 10's of thousands of dollars (if not more) over the life of the loan. In today's low interest environment, the difference in rates has been artificially compressed. In a normal environment, a great score gets you a 3-4% rate. A low-end score gets you a 7-8% rate. Over 30 years this difference is massive in terms of actual dollars paid. Go look at mortgage rates back in the Volker years of the 80's.
 

Borzak

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I still haven't figured out why I have a 35 year credit history on my report when I'm 48. I really don't remember applying for credit at 13. It's been on there since the first time I looked when you had to go to the credit agency office and pay for a report or get the free one once a year.
 

Sanrith Descartes

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I still haven't figured out why I have a 35 year credit history on my report when I'm 48. I really don't remember applying for credit at 13. It's been on there since the first time I looked when you had to go to the credit agency office and pay for a report or get the free one once a year.
Just go through your report line by line and look for the oldest record. If the date matches when you were 13 see what it is and if it is accurate.
 

Arative

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I still haven't figured out why I have a 35 year credit history on my report when I'm 48. I really don't remember applying for credit at 13. It's been on there since the first time I looked when you had to go to the credit agency office and pay for a report or get the free one once a year.

I had something like that. My father and I have the same name and some JCPenney's card he opened in the 80s was showing up on my report. I just disputed it as not mine and had it remkvedt
 

Borzak

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The odd part it didn't have anything about the item it was just a history of X years. I've only applied and used credit in my life a handful of times. I used to have an American Express I got when I turned 21. I got rid of it several years ago. I financed one vehicle in my life. Never financed a house. Only one place I ever lived put it on credit report since I normally rent from someone that doesn't normally rent and doesn't do it for a business. The rest have been just utilities, and that just recently. When I lived in East Texas I got my water and power hooked up and the lady was telling me about a deposit and I said OK. Then she was like is XX your grandmother. Yes ma'am she is. Oh we can wave that. Small town life. And I have an Exxon credit card since I get a 4% discount on gas for using it.

Took 2 years but I got the ding on my credit report from the hospital removed. They kept saying I owed the money. I kept sending them a cancelled check in that amount. Nothing. I filled a grievance and apparently they didn't contest it and it was removed. After 2 years they finally sent me a refund for the amount. Nothing to explain what happened, just a check. From the sounds of it this happens quite often with medical.

I don't know a lot about the entire system obviously. But apparently paying bills on time over a long period is a big contributer. I was about to buy a house when I got sick and checked mine. One vehicle financed 25 years earlier, just paying my one credit card bill, paying my utilities, and I had an 805 credit rating.
 

Xarpolis

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My wife checks her credit score every month using the free program. She also pays all of her bills on time. In the last month, her credit score dropped 22 points because of "late payments". She's completely baffled because she pays everything on time. How can she fight this ding? Her score has been jumping a lot, it seems.

749 in March, 764 in April, 764 in May, 749 in June, 749 in July, now 727 for August. She has no idea what's going on.

She only has 1 loan, and it automatically pulls payments every month to make sure she won't be late. Her only other bills are credit cards, but she pays them off every month. Completely in the dark as to what's going on.

fico.png
 
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