Cash/Check/Credit/Debit

[Aliantha]

nope...it gets used by people less crass than me over here too.

[Juniper]

I have a really simple plan for improving/maintaining my good credit rating.

I pay my bills on time.

Seriously, I am a simple gal - I figure, if you have to play games to get a good credit score, I don't want to play. How hard can it be? Buy stuff, sometimes on credit - I like the "x months same as cash" deals; this is a good way to build credit without paying interest.

We do that a lot but generally only one loan at a time. We're going to have two of those going soon, 'cause we NEED a new a/c installed! But both are due to be paid off soon, it's not going to be a big problem.

if I carry a credit card balance, it's for a really good reason - a short, short term loan vs. unplanned spending. Therefore I know it'll get paid off in 3-4 months. If I need a loan longer than that, I get a home equity loan.

Sometimes I mess up and pay a bill late, but generally all that gets me is a late fee. I think you have to be >30 days late before it affects your credit rating.

[monster]

you sound like a gal with a decent rating.....

[Aliantha]

I don't know what it's like over there, but you basically have to not pay a monthly bill for at least 3 months in a row before it's even close to going on your rating (in general).

[Undertoad]

LJ will know as he reviews credit histories every day

[Juniper]

Well, I tell ya...never once in my life have I had a problem getting a loan or a credit card. We've bought houses three times, gotten five car loans, refinanced mortgages twice, gotten three home equity loans, and bought many appliances, carpets, and electronics "x months same as cash."

The only problem I have with loans is applying in my own name, because I am self-employed. And I still think I could, I just don't choose to because it can get complicated -- their systems just aren't set up for those who tend to get paid $5000 one month and $500 the next. So I just let hubby do it.

The whole credit score game is really simple. All you have to do is buy stuff using the appropriate form of credit (meaning, don't use a credit card for something you could get a home equity loan for) and pay it off on time. Take out credit cards wisely, with a purpose in mind, and be disciplined enough to use them for that purpose. Resist temptation to fiddle with your accounts any more than need be--the length of time you have an open account in good standing counts for more than almost anything else.

The whole deal with the credit card limits is to keep them at a reasonable ratio to your income level - and it's fine to leave the balances at zero. Too little open credit means you might not know how to use credit wisely - they don't know if you've only got a $500 credit card limit by choice or because the banks don't trust you enough to give you more. Too much open credit means you could conceivably go out tomorrow and max it all out, even if it's currently at zero.

There's no game to it, really. Just behave sanely and make your payments, keep it up over time, and you'll be fine.

[lumberjim]

this is actually an area that I have experience in. REAL actual non made up experience.

Your credit score is a constantly changing thing. The information that effects it is typically posted once per month by each reporting creditor......at varying times. It has many factors. One of those factors is availability of revolving credit(credit cards). If you have a $20,000 credit limit on your Visa and have $2000 balance, this will HELP your credit score. you have 90% available revolving. If you have a $19,000 balance, you're more of a risk and your score will plummet.....even if you always make that payment on time. NOW>>>>here's the worst part<<< if your score is low, and the CC companies check periodically.... the CC company may be able(based on your card holder agreement) to RAISE YOUR RATE! talk about fucking you long and hard.

But monster.....just so you know....available credit is a good thing. having had High credit (meaning having had a large balance reported to the bureau at one time) and currently having a low or zero balance is a positive thing. You could have a $15k limit on a card, but if the highest balance ever reported was $3k.....a human credit analyst will only count is as $3k worth of experience.

As for car buying power......you can slip thru automatic approval programs with all revolving credit history...if you have a high score, and long enough time in the bureau...and adequate income to afford the projected payment...but when an analyst looks at the file, they like to see previous Installment credit (car payments, mortgages, fixed payment loans) that are at least 50% of the applied for amount.

[monster]

Originally Posted by lumberjim

this is actually an area that I have experience in. REAL actual non made up experience.

snip

But monster.....just so you know....available credit is a good thing. having had High credit (meaning having had a large balance reported to the bureau at one time) and currently having a low or zero balance is a positive thing. You could have a $15k limit on a card, but if the highest balance ever reported was $3k.....a human credit analyst will only count is as $3k worth of experience.

large balance cleared is way different from retaining small balance.

and yes, nice when you get to deal with humans.

may be a sahm now, but I've sold credit cards, cancelled credit cards and approved them n my murky past... as well as having awesome credit now that's sort of like not made up experience too, just so's you know and all.....

[monster]

Originally Posted by Undertoad

LJ will know as he reviews credit histories every day

right. and none of the rest of us can possibly know what we're talking about. Tell me, does he never approve loans that people default on?

[lumberjim]

yeah....I'm just saying that I know of what I speak. Not that you don't. retaining a small balance is relatively irrelevant. pattern of payments made on time, and available credit on an account that has been at a high point at some time is a helpful formula.

also....when you said that taking credit advice from people that have bad credit steams you.....that's kind of like not taking advice from a doctor that's been sick.

Some times, people have to make choices about what bills they can pay.......credit ratings can suffer as a result. It doesn't mean they don't understand how it all works.

[monster]

Originally Posted by lumberjim

also....when you said that taking credit advice from people that have bad credit ....that's kind of like not taking advice from a doctor that's been sick.

hmm well I'd take advice from a doctor who was better, but not one who'd been perpetually sick and was stillcoughing and spluttering. Better analogy for what I said, I think you'll find.

[lumberjim]

whatever.

[Aliantha]

Why don't you both say you know what you're talking about, but from different perspectives?

[monster]

Originally Posted by lumberjim

Some times, people have to make choices about what bills they can pay.......credit ratings can suffer as a result. It doesn't mean they don't understand how it all works.

sometimes. But usually poor understanding of their situation or poor financial choices is what got them there in the first place, so for all of the people out there wanting to offer advice, they wouldn't be the highest on my list.

[monster]

Originally Posted by lumberjim

whatever.

Anytime, fresh....