Credit scores

[MOCHAakaMOCHA]

I'm paranoid .. check mine twice a year.

[doinky]

Long lurker here and would love to put my experience and knowledge into the mix. Been living all cash for 5 yrs and now running 4 yrs with credit cards.

As a kid, I gathered too much credit debt and havent paid it. Debts usually fall off after 7 yrs. If you make any payments during that time, the time resets. Debt has to be untouched, no payments for 7 yrs.

Credit karma, which I use goes off Transunion score. Its free and has good forums and advices. Credit Sesame uses Experian. Also free. It will give you a general idea of your score. But annualcreditreport.com if need to get detailed report. If you are serious about your score, its smarter to utilize most free resources out there.

Between all cash and now credit cards.... using credit cards are not bad. You have to be smart, diligent and restraint. Do not overspend.

Factors in improving / building your score and history.

Age of credit, payment on time history, and credit utilization. Those 3 are biggies. First 2 are self expanatory. How long you have credit and % of time you been paying on time. Credit utilization is the most important and harder to understand. % of debt to credit available. Common number to have is 20% or lower. I perfer 15% or lower. For example, having a $500 credit limit. 20% of that is $100. Credit score heavily base off your debt to credit availabilty. If you are heavily in debt and maxed out, it will negatively lower your score. But if you spread that same debt over several cards but doesn't go above 20%, it will help your score. Kinda weird but thats the way it works. And it doesn't matter if you can pay it off every month. If you go over a certain credit utilization %, to the banks you are a risk. One of main reasons I do not like department store cards. Low credit limits and you are limited to that store.

Myth I keep hearing is to carry debt over to the next month to build credit. Not true. Most of my cards report to the credit bureau in mid month my balances, payment history, etc. I charge everything on my cards and pay it all every month. First 30 days are interest free loans. After that you will be hit with high interest rates. Smart way is to charge little every month then pay it off. Higher credit limit, you can charge more. Once you understand the dynamics of what consist of a credit score, you can use it to your advantage.

[doinky]

If you are starting from scratch, apply for secured cards. Or get someone to add you as authorized users. Some banks report it, others dont. I know amex does. If you planing on a house, open up a personal loan and pay it off in 7+ months. It will show you can pay on time and loan history. Helps for car and house loans in the future.

Google "slickdeals" and "chase slate". Good link that explains about that card. 0% interest rate for 15 months and no transfer fee for 2 months. Good card to transfer if you want to get hold of your credit card debt.

I am one of the few that take advantage of credit cards and actually get nice perks. Maximize these reward credit cards to get the best perks. Earn miles for every $ you spend. I sign up some for soley for the benefits, some solely for just sign in bonuses. Mix it with regular spending and some with "manufacturing spending". Pay it all off every month.

I think of these as discounts. Amex blue perferred offers 6% off on groceries, chase freedom is offering 5% on gas, etc. Cash does not offer these benefits. But you have to have the will to not overspend. They are not the devil like people portray it as. If you over spend and carry balances over which will activate the high interest rates..... it will cancel out the benefits.

Google "How the Rube Goldberg of Credit Cards fly first class for free".

[Guest042015]

Doinky = Dave Ramsey

Whole new meaning to the envelope system huh guys?

Lmfao

[Guest101314]

Thanks doinky! That was a lot of good info!!

My next plan is to definitely get a secured card and start building that. I haven't had a credit card in so long, so it will be interesting. Trying to get my budget down, hoping for an uptick in business soon. (super quiet lately)

[hittinit]

Unfortunately the world is designed - in America anyway - for you keep "consuming" goods and services and for you to pay for those goods with future earnings. Trade deficits, national debt, household debt - it's all a house of cards really. Chances are you will outlive the debtors you owe money to because they are gonna go broke with all that they've lent to everyone else so hang in there!

[Klittylicker]

Just my two copper.... about medical bills that no one mentioned.... Info about balance billing....which some hospitals or labs attempt to do after they already been paid

http://www.tdi.texas.gov/consumer/cp...cebilling.html