I still don’t really have savings (outside of the 401k I just started and can’t really touch), and don’t really expect to be able to properly invest in a proper emergency fund for about a year. I am pushing to raise my credit now because I’d like to have the ability to actually buy a home. It won’t be easy, but it’s cheaper than renting.
Lenders and creditors use this information to determine how likely you are to repay borrowed funds. Then, they decide whether or not to approve your application, and what kind of interest they want to charge you. Since someone with a lower credit score is deemed less likely to repay the loan, they’ll receive a higher interest rate as extra insurance to the lender in case the loan defaults.
It also does not help when the stock market crashes twice in the final 8 years of a person’s working years. There is nothing worse than having to live on Social Security because all you worked for in 45 years went down the tubes. That happened to a dear friend of mine who spent many years since high school and the military working as a mechanic. The only thing that allows him to live on SS is because his health care is free with the VA from his military during Vietnam. And his non-taxable income (tiny) as a Commander at an American Legion.
Common ways that consumers improve their credit ratings are by contacting the major credit bureaus (Experian, Equifax and TransUnion) and asking them to remove reporting errors, paying down credit card balances and paying off accounts that have been placed in collections. Another tactic is to ask for an increased credit limit on your credit cards. For people who carry credit card balances, an increased credit limit lowers the credit-to-debt ratio, a key factor in credit scoring.
I have a 669 credit score from Equifax, never can get thru to them & has been going down & was sent to me by my insurance co. USAA in Feb. but will not show up very well even though I make all payments. They do show some mistakes, bad ones that I never had anything to do with but is next to impossible to get thru to. Been going down for about 6 yrs. In the Natural gas industry & spot price of gas is at about a 20 yr. low plus had to sell some expensive , paid for luxury property because housing bust hit at the same time along with expenses going up & doubling of property taxes.. Grew up with excellent credit but sinking. Plus drilled 2 dry holes, just trying to keep my income at a good healthy level. At the same time of everything else.Not much hope. I’m 68 now & the ups * downs have been going on for many years.
Although it’s nice to have a perfect or near-perfect score, it means very little, other than having a badge of honor that less than 1% of the population could achieve. Once your score gets and remains above 780, lenders see you as a low credit risk. You’ll get the best interest rates and are pretty much guaranteed a “yes” to any loan you apply for that appropriately fits your income level.
Practice with rewards. Cards for fair or average cards will sometimes have rewards, such as 1 percent back on all purchases. This is a good way to practice for getting a rewards card down the road. Make sure you don’t carry a balance, because interest charges will negate your rewards.
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Actually you’re just off the mark in some areas. I have a 8 year history with no loans just 3 credit cards the newest of which is about 4 years old and 1 credit unquiry for a utility recently. My score is is between 780 and 810 (depending upon the credit agency). I would suggest a few things, first get your debt ratio down to about 15% (under 20%) that makes a big difference. Second try not to use all your credit cards, limit the use to one credit card or maybe 2. (this also helps your auto insurance score). Third never let your debit limit per month cross 20% to get top notch scores. I pay off my card mid month if I’ve made some large purchases. With this you should see a good increase in your score in a few months.
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Although explanations and agreements were sent to the court, along with the fact that the Atty who was to do the work WALKED OUT OF THE FIRM WHEN HE SAW THEIR TREATMENT OF ME, a PARTNER, decided to send a bill 5x higher than was ever quoted (and again, NONE of the work was done.) Although there were documented phone messages left to return the calls, THEY NEVER DID. When a phone message was left for the CEO of the Law firm to return the call, HE NEVER DID. When faxes were sent to their Accounting Division asking for a breakdown on what and where this number came from, they only sent THE AMOUNT DUE WITH NO BREAKDOWN OR EXPLANATION.
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Do you mean an authorized user? (A co-signer generally uses his or own good credit to help someone with little or no credit history get a card, while an authorized user is allowed to use an account but has no responsibility for paying it off.) And yes, your poor credit could hurt him. Another way to help him get a credit history would be to get a secured card. Here are a couple of Credit.com resources that may be useful to you:
If you have a grandparent or someone who has a very old account, get them to put you as an authorized user and it will skyrocket your length of history and ontime payments. Then contact the dental company with a goodwill letter just simply asking if you could please have it taken off. The worst thing they can do is say no, but they usually have no problems if you’re polite. If the dental bill is in collections or is charged off, don’t contact them. Just wait for it to fall off unless it is brand new. Then get yourself a couple secured cards and up your available credit, use them just for gas and things and pay them off each month. Within a month you can have 100 pts added just from some simple measures.
However, being in debt doesn’t mean that you have bad credit. In fact, it likely means the opposite. You have a good enough credit score to have the debt, and as long as you are actively paying it off (not missing payments, not making payments late), then your score will remain high (and keep growing).
“It’s almost impossible to have a perfect credit score. If you use credit and you have debt, there’s always some risk you will not be able to repay it,” Griffin said. “You could become ill, you could be in an accident that’s not your fault. Because there’s always some risk from things beyond your control that you won’t be able to repay the debt, you won’t have a perfect credit score.”
A debit card can be convenient for ordering online and so forth, but it won’t help you build credit. If your parents have good credit, you could ask to become an authorized user on one of their cards. You could also consider using your savings to get a secured credit card. In that case, the amount you put on deposit (minus any fees) becomes your credit limit. If you can keep your balance at less than 30% of that amount, you’ll help yourself establish a good score. You’ll find more information here:
Don’t Get Discouraged: Even if you never reach 850, “merely” having excellent credit is an amazing achievement. It will save you boatloads of money over the course of your life. And it won’t ever stand in your way like a “bad” score. Plus, you may find consolation in the fact that having excellent credit means your score is higher than over 60% of people, according to WalletHub data.
The Debt-to-Income Ratio is yet another element that lenders will look at when determining if you are a suitable candidate for a credit account or not. An individual’s debt-to-income ratio is calculated by dividing the total recurring monthly debt they have by their gross monthly income, and in doing so, they will reach a percentage.
Actually, we did this for our daughters and son and it has raised their credit scores by 143 points! We also co-signed for a used car for our son, who in a year, traded it in and bought a new one on his own!
Pavelka isn’t sure what the other part of the letter means, that his score is “higher than 100 percent of U.S. consumers.” Fair Isaac spokesman Anthony Sprauve said it does not mean he has the absolute highest score in the nation. There are other 848s, and even 849s and 850s out there. But his score is higher than perhaps 99.7 percent of consumers and the disclosure letter simply rounded up.
Bear in mind that the credit performance highlighted above is by no means universally representative. It’s certainly possible to achieve perfect credit with a different background. And it’s entirely possible that you won’t reach such heights even with this sort of exemplary record.
I’ve read that keeping various cc’s in use (pay off every month it is used, and use quarterly) then this helps boost scores. When taking out new cc, know that it will lower your score for a month or two after. I’ve learned a lot from Suze Orman about this aspect of building credit. Today my score is 796.