Credit score, how does this work?

lovesclimbing · October 2018

I've been googling up a storm and can't seem to find an answer, so I thought you all might have some advice.

My H has had debt, but no credit cards, and he paid off his last loan about two years ago. So we just recently applied for a loan to get a vehicle. To our surprise, my H no longer has a credit score. I didn't realize it would disappear so fast!

So my question is, when we get credit cards or get a loan (the bank will still loan us money for the vehicle), will my H's credit history pop up again? Is he starting from a clean slate or will everything more recent than 7 years still be on there?

All my googling mostly turns up questions about "my good credit score disappeared and now it's been 10 years," with responses of stuff disappearing after 7 years, so all of that is gone and you're starting fresh. But what if it hasn't been 7 years?

Thanks for any insight you can give me!

MobKaz · October 2018

My husband and I used to literally pay by the "cash and carry" philosophy. Because NOT using credit cards shows no history of debt and payment responsibility, we had a low/poor score because there was no history with our finances.

We started to use credit cards to create a history. We just pay them off monthly. One point I do not understand is that when I started to cut up some cards (stores I no longer shop at,for example), someone told me not to do that, even if I no longer use them. That makes no sense to me.

missJeanLouise · October 2018

My credit is complicated because I had my identity stolen when I was younger but DH has worked really hard to repair his score after defaulting on his student loans. He learned a lot from reddit’s r/personal finance page of all places.

I am sure other posters will have better information, a lot of smart ladies here.

MyNameIsNot · October 2018

It's odd that a loan from <7 years ago would have completely disappeared, unless it was something that didn't report to the credit bureaus in the first place. There are 3 different credit reporting agencies: Equifax, TransUnion and Experian. Some creditors only report to one or two, and it's possible to have debt that doesn't report at all. (e.g. borrowing against your 401k doesn't report, since you're actually borrowing from yourself.)

I would go to annualcreditreport.com and pull all three of his reports to look for the old debt, and see what's going on with the current. This is the fed page and gives you the actual report, not the FICO score. While it's not as exciting to look at the history, this is the part that's most important to check up on. If you want to track the score, there are other services and sometimes free FICO scores from credit cards.

lovesclimbing · October 2018

We've pulled them in the past, but I guess we should consider pulling them now, even though the bank says there's nothing there.

My H did have mulitple years of history and several loans over the years. From my googling, @mynameisnot, it's not surprising that it disappeared. Apparently it can disappear after just six months of inactivity!

We do want a credit history and keep planning to get credit cards and pay them off monthly to help maintain that. Just haven't gotten around to it.

ahoywedding · October 2018

MobKaz said:

My husband and I used to literally pay by the "cash and carry" philosophy. Because NOT using credit cards shows no history of debt and payment responsibility, we had a low/poor score because there was no history with our finances.

We started to use credit cards to create a history. We just pay them off monthly. One point I do not understand is that when I started to cut up some cards (stores I no longer shop at,for example), someone told me not to do that, even if I no longer use them. That makes no sense to me.

Could they have been suggesting to not close the accounts? If you've had an account open for a long time, that helps with the average length of your credit history. Also, if that card has a decent limit but you don't use it, it will help with your overall credit limit vs. utilization ratio. If you cut the card up but keep the account "open" (aka just don't use it), it should help. I've got a few old accounts that I put things like Netflix on, so they don't get closed for non-use, and I just set up autopay for that $11 or whatever.

ShesSoCold · October 2018

ahoywedding said:

MobKaz said:

My husband and I used to literally pay by the "cash and carry" philosophy. Because NOT using credit cards shows no history of debt and payment responsibility, we had a low/poor score because there was no history with our finances.

We started to use credit cards to create a history. We just pay them off monthly. One point I do not understand is that when I started to cut up some cards (stores I no longer shop at,for example), someone told me not to do that, even if I no longer use them. That makes no sense to me.

Could they have been suggesting to not close the accounts? If you've had an account open for a long time, that helps with the average length of your credit history. Also, if that card has a decent limit but you don't use it, it will help with your overall credit limit vs. utilization ratio. If you cut the card up but keep the account "open" (aka just don't use it), it should help. I've got a few old accounts that I put things like Netflix on, so they don't get closed for non-use, and I just set up autopay for that $11 or whatever.

Yes, this.

We just had an account close due to 3 years of inactivity (was a medical credit card) and I was kind of disappointed to get that reduction in available credit vs. utilization. And it was right after we paid off H's truck so two dings pretty close but my score went down like 20 points for a month than popped back up. I think within 2-3 months its was back to within like 4 points of where it was.

Edit - Also, when we got the letter that stated they were closing the account, it said that they would notify the bureaus that the account was being closed due to inactivity and that it had been in good standing, not delinquency or anything. I assume that was less of a ding to our credit scores, especially since they included that note in the letter.

I agree with the suggestion of getting a card just to get that credit history going. I still have the first card I ever got at 18 and a $250 limit and my limit has increased to over 100X that in 12 years. Definitely look at points cards since it sounds like it'll be unlikely that you'll carry a balance. I have my phone, gas and cable bill charged to one card just so there's some activity every month. And a lot of cards offer great points at places like grocery stores and gas stations so you can get a little $ back on things you're buying anyway. I've got like $3,000 in CC rewards that I'm stashing for a big vacation in like 10 years.

But to your main point, does your H have any utilities or anything in his name? Even a phone bill? We have the gas and water bill under my name and the electric and cable under his, so there's some of that kind of activity on our reports too. If he does, then that's really surprising that he "doesn't have" credit.

I'm sorry I don't know the answer to your actual question. I feel like it makes sense that the last 7 years would be on there, but I can't put my finger on why that makes sense (and how often does the government do what makes sense?).

Edited for typo and to add another thought.

short+sassy · October 2018

I'm not sure why it happens that fast...that the credit score/history disappear...but I believe that it does. The history part, at least anything in the last 7 years, I'd think would come back if he gets something current back on the report. But I don't know that for sure.

On a Money Matters FB group I hang out on, one of the members is super into Dave Ramsey. Her and her H have no debt. For a long time, they just had a mortgage. But, when they paid that off with an inheritance, their credit reports/scores disappeared in (I think) just about 6 months.

One of the things I personally find extremely stupid about how credit scores work is that the "age" of your credit report is a medium factor in your score. HOWEVER, "age" is determined by the average number of years your current, open accounts are. They don't account for the fact that people can have great credit for decades. But, if all their open lines are relatively new, that is all that is looked at.

This is one of the reasons experts recommend that people not close old credit cards they aren't using. Use it 1-2x/year and then pay it off. A bit of a hassle, but that long history keeps staying factored into the "age" of your score. Though, of course, you can't really do that with loans. But you can with credit cards.

I had something really annoying like this happen a couple years ago. I applied with my local bank for a business credit card with my LLC. Business credit reports are (I think) a different "system" from personal credit reports, but the "factors" that compile a business credit score are similar to personal ones. At any rate, I already had two credit cards and one property loan under the Tax ID for that business. And I'd had each of those for at least 1-2 years at that point. NONE of those came up for my bank when they ran the business' credit report! Oh, but I'm sure if I'd ever missed a payment they would have magically appeared, smh.

lovesclimbing · October 2018

@shessocold, yes, but those have never been on either of our credit reports. ¯\_(ツ)_/¯ We have a cell phone and Internet bill and electric currently. Neither have ever shown up.

We are definitely planning to get a good rewards card when we do. Need to do that soon!

short+sassy · October 2018

lovesclimbing said:

@shessocold, yes, but those have never been on either of our credit reports. ¯\_(ツ)_/¯ We have a cell phone and Internet bill and electric currently. Neither have ever shown up.

We are definitely planning to get a good rewards card when we do. Need to do that soon!

I've never had utilities show up on credit reports either. Though they potentially will if someone has an unpaid balance for a long time and the utility company submits it to the credit bureaus.

For my tenants, I have an option where they can pay their rent through an online service. One of the benefits of that is their rent payments will then be entered as positive marks of payments on their credit reports. On the credit report, I think it's classified as a line of credit. However, it doesn't enter negative marks. I remember when I was a renter, I found it frustrating that the biggest bill I paid every month made no difference on my credit report. I understood why that was, but it still didn't seem fair. And I found a way to solve that for my own tenants!

ShesSoCold · October 2018

Interesting!

When I bought my first car, they told me that my phone bill and that tiny credit card were the only things on my credit report. And it's probably untrue, but someone (with bad credit) told me once that our gas company reports to the bureaus every month so I'm always careful about making sure that's paid.

climbingsingle · October 2018

I've also never seen utilities on my credit report. Or my cell phone bill. Just my credit cards, car lease and mortgage. But none of those have had late payments, so I'm not sure if that's why I've never seen them show up.

I didn't realize your credit report could disappear for inactivity. I do know that my H's score is not as high because the length of his credit history is not as long. He also always paid things in cash, and rarely used credit cards.

VarunaTT · October 2018

short+sassy said:

lovesclimbing said:

@shessocold, yes, but those have never been on either of our credit reports. ¯\_(ツ)_/¯ We have a cell phone and Internet bill and electric currently. Neither have ever shown up.

We are definitely planning to get a good rewards card when we do. Need to do that soon!

I've never had utilities show up on credit reports either. Though they potentially will if someone has an unpaid balance for a long time and the utility company submits it to the credit bureaus.
For my tenants, I have an option where they can pay their rent through an online service. One of the benefits of that is their rent payments will then be entered as positive marks of payments on their credit reports. On the credit report, I think it's classified as a line of credit. However, it doesn't enter negative marks. I remember when I was a renter, I found it frustrating that the biggest bill I paid every month made no difference on my credit report. I understood why that was, but it still didn't seem fair. And I found a way to solve that for my own tenants!

I had a company like this advertise. I signed up for their service, only to find out that neither my company or my bank would allow this. I was really annoyed, b/c I need to rebuild my credit and this seemed like such a convenient way to do it.

banana468 · October 2018

What about looking to see if you can now qualify for Amex? There are so many cards out there that get you rewards that unless you know that a piece of plastic means you're going to be making unrestrained purchases it's almost silly to not use them. Plus

-There's purchase protection in a lot of cards
-Carrying cash offers no protection if you lose it
-The benefits can mean that you are accruing other benefits to be used like cash. My Amex points could buy Christmas gifts for a couple people this year. If I traveled more I'd use a card with miles.

We haven't done a credit search recently but years ago when we bought the house there were no flags. DH and I have both had a CC since we started college and then started using Amex when we were in the business world. Unless there's a 0 interest option then we carry no balance ever.

short+sassy · October 2018

VarunaTT said:

short+sassy said:

lovesclimbing said:

@shessocold, yes, but those have never been on either of our credit reports. ¯\_(ツ)_/¯ We have a cell phone and Internet bill and electric currently. Neither have ever shown up.

We are definitely planning to get a good rewards card when we do. Need to do that soon!

I've never had utilities show up on credit reports either. Though they potentially will if someone has an unpaid balance for a long time and the utility company submits it to the credit bureaus.
For my tenants, I have an option where they can pay their rent through an online service. One of the benefits of that is their rent payments will then be entered as positive marks of payments on their credit reports. On the credit report, I think it's classified as a line of credit. However, it doesn't enter negative marks. I remember when I was a renter, I found it frustrating that the biggest bill I paid every month made no difference on my credit report. I understood why that was, but it still didn't seem fair. And I found a way to solve that for my own tenants!

I had a company like this advertise. I signed up for their service, only to find out that neither my company or my bank would allow this. I was really annoyed, b/c I need to rebuild my credit and this seemed like such a convenient way to do it.

Oh no! What a bummer. Now I'm really curious what went wrong. With the company I use (Cozy.co), I think it's just an ACH transfer from their account to mine. Similar to how all kinds of bills are paid. This particular company is a big one in the industry and has been around for at least 10+ years. But there are a few others. I wonder if the others do their processes differently.

I've been really happy with the service and haven't had any issues. It's a win-win for everyone. The tenant can pay their rent with a few clicks and get positive entries on their credit report. It's free for them if they use their checking account, but they can also pay with a credit card for an additional fee. I don't see any of their account numbers. They don't see mine. It's free for me also, if I don't mind waiting a few days for my money to be automatically deposited into my account. Or I can expedite payments for $3.50 each and get the money in only 1-2 days.

lovesclimbing · October 2018

Banana, I will probably have to start with a bank credit card through my bank for a year or so because I have no credit history at all. And if H's score is gone, he might have to, too.

We do use plastic currently, it's just debit cards. Never have had a reason to have a credit card, I just want one for the credit history and rewards. We don't need them.

We did pull H's credit history, and it's all showing up, it's just not showing a credit score when banks pull it, I guess.

banana468 · October 2018

lovesclimbing said:

Banana, I will probably have to start with a bank credit card through my bank for a year or so because I have no credit history at all. And if H's score is gone, he might have to, too.

We do use plastic currently, it's just debit cards. Never have had a reason to have a credit card, I just want one for the credit history and rewards. We don't need them.

We did pull H's credit history, and it's all showing up, it's just not showing a credit score when banks pull it, I guess.

I know a lot of people who like using their bank card for debit purchases but I'm not a fan.

If you have any kind of fraudulent activity it's an absolute pain in the ass to deal with your bank and there's a freeze on your account. In that time you can be completely stuck not having the ability to withdraw funds while the account is frozen and changed. That may not be a huge deal for a couple days but good luck if it happens on the exact days that you have no cash and your kid is sick.

A credit card through your bank however will have additional purchase protection and you aren't stuck going through the giant pain that it is if there *is* fraud on the account. Some banks are better to deal with than others to boot. When I had fraud on my Amex they called me and I had a new card in two days. In the meantime I used a different card as a backup.

I get that you and your H are looking to make a start but I'd do this sooner rather than later rather than "not getting around to it".

How do you not *need* one? Do you never leave town or buy expensive things? I would flat out not buy a TV in cash and wouldn't put a trip on a bank card.

short+sassy · October 2018

lovesclimbing said:

Banana, I will probably have to start with a bank credit card through my bank for a year or so because I have no credit history at all. And if H's score is gone, he might have to, too.

We do use plastic currently, it's just debit cards. Never have had a reason to have a credit card, I just want one for the credit history and rewards. We don't need them.

We did pull H's credit history, and it's all showing up, it's just not showing a credit score when banks pull it, I guess.

You would probably both be eligible to get a credit card. Even considering you don't have any credit and his can't be pulled up anymore. It's usually only people with bad/mediocre credit that sometimes have trouble with anything but secured cards. If you all have an account with Credit Karma, they'll have a helpful area in your account that shows credit cards you are the most likely to be accepted for. I applied for a credit card within a couple weeks of turning 18, ie no credit, and didn't have any trouble. Though, let's just say that was a really long time ago, lol.

You all won't pay a dime of interest, as long as the balance is fully paid off every month. If you all do start to carry a balance, make sure that total stays below 25% of the total credit limit, at least 2 months before you try to get a pre-approval for a home. Having credit balances above 30% of limits is a major negative factor on a credit score. That's called the "utilization rate". And the higher that rate is, the more it beats your credit score down. Under 25% is even better.

You also said something about he can still get the car loan. He should and have you put on it, as well. On top of that building more credit for the two of you, it's also an installment loan. Which is a different "type" of credit than a credit card. Having more "types" of credit will help credit scores, though this is a more minor factor. However, mortgages are also installment loans. And the bank underwriters will specifically like seeing that you all have successfully been making on-time payments to one.

You'll probably need to have the loan at least 6 months for it to be "seasoned" enough to make a difference on the credit score and be impressive to a loan officer looking at the credit history. Keep that loan open until after you all close on a house. After that, if you all have the money and want to do it, then pay the car loan off.

lovesclimbing · October 2018

banana468 said:

lovesclimbing said:

Banana, I will probably have to start with a bank credit card through my bank for a year or so because I have no credit history at all. And if H's score is gone, he might have to, too.

We do use plastic currently, it's just debit cards. Never have had a reason to have a credit card, I just want one for the credit history and rewards. We don't need them.

We did pull H's credit history, and it's all showing up, it's just not showing a credit score when banks pull it, I guess.

I know a lot of people who like using their bank card for debit purchases but I'm not a fan.

If you have any kind of fraudulent activity it's an absolute pain in the ass to deal with your bank and there's a freeze on your account. In that time you can be completely stuck not having the ability to withdraw funds while the account is frozen and changed. That may not be a huge deal for a couple days but good luck if it happens on the exact days that you have no cash and your kid is sick.

A credit card through your bank however will have additional purchase protection and you aren't stuck going through the giant pain that it is if there *is* fraud on the account. Some banks are better to deal with than others to boot. When I had fraud on my Amex they called me and I had a new card in two days. In the meantime I used a different card as a backup.

I get that you and your H are looking to make a start but I'd do this sooner rather than later rather than "not getting around to it".

How do you not *need* one? Do you never leave town or buy expensive things? I would flat out not buy a TV in cash and wouldn't put a trip on a bank card.

Like I said, we use our debit cards. Yes, we travel, and, yes, we make large purchases with them. We've never had an issue using debit cards for anything we've ever tried to use them for. Anywhere credit cards can be used, our debit cards can be used. The only thing that we've had even approaching an issue with using our debit cards for is renting a car. Many rental agencies won't let you use a debit card, only a credit card. But there is one rental agency that lets you use debit cards (Enterprise, IIRC), so even that isn't really an issue.

I seem to recall having this discussion before in here, and I was quite surprised to hear about limitations on debit cards. Ours are Mastercard, and don't seem to have really any limitations on them, but apparently some banks do?

I'm curious, why wouldn't you buy a tv in cash? Obviously, it's nice to get CC points for large purchases, but if you don't care about that, what's wrong with using cash? You'll still get a receipt for it.

I have heard what you've said about freezing and getting money back, disputing charges, all that stuff before with credit cards. We've never had issues with that so far. Yes, we do want them, primarily to build credit for house buying in the future and for the points. But I definitly don't think they're a necessity.

ETA: short+sassy, interesting, I'll definitly keep all that in mind. Buying a house is further out than a few months or even within a year. We can still get the vehicle loan, but at above 8% interest!

So, we're considering pulling back on what we were going to get with a loan and pay cash for something a little less new with a few more miles at this point.

climbingsingle · October 2018

I use my Amex for purchasing protection. Also, as someone mentioned before, if your debit card gets compromised, you're fucked. I had that happen to me after booking plane tickets. It's much easier to remedy with a credit card, and not your debit card.

banana468 · October 2018

lovesclimbing said:

banana468 said:

lovesclimbing said:

Banana, I will probably have to start with a bank credit card through my bank for a year or so because I have no credit history at all. And if H's score is gone, he might have to, too.

We do use plastic currently, it's just debit cards. Never have had a reason to have a credit card, I just want one for the credit history and rewards. We don't need them.

We did pull H's credit history, and it's all showing up, it's just not showing a credit score when banks pull it, I guess.

I know a lot of people who like using their bank card for debit purchases but I'm not a fan.

If you have any kind of fraudulent activity it's an absolute pain in the ass to deal with your bank and there's a freeze on your account. In that time you can be completely stuck not having the ability to withdraw funds while the account is frozen and changed. That may not be a huge deal for a couple days but good luck if it happens on the exact days that you have no cash and your kid is sick.

A credit card through your bank however will have additional purchase protection and you aren't stuck going through the giant pain that it is if there *is* fraud on the account. Some banks are better to deal with than others to boot. When I had fraud on my Amex they called me and I had a new card in two days. In the meantime I used a different card as a backup.

I get that you and your H are looking to make a start but I'd do this sooner rather than later rather than "not getting around to it".

How do you not *need* one? Do you never leave town or buy expensive things? I would flat out not buy a TV in cash and wouldn't put a trip on a bank card.

Like I said, we use our debit cards. Yes, we travel, and, yes, we make large purchases with them. We've never had an issue using debit cards for anything we've ever tried to use them for. Anywhere credit cards can be used, our debit cards can be used. The only thing that we've had even approaching an issue with using our debit cards for is renting a car. Many rental agencies won't let you use a debit card, only a credit card. But there is one rental agency that lets you use debit cards (Enterprise, IIRC), so even that isn't really an issue.

I seem to recall having this discussion before in here, and I was quite surprised to hear about limitations on debit cards. Ours are Mastercard, and don't seem to have really any limitations on them, but apparently some banks do?

I'm curious, why wouldn't you buy a tv in cash? Obviously, it's nice to get CC points for large purchases, but if you don't care about that, what's wrong with using cash? You'll still get a receipt for it.

I have heard what you've said about freezing and getting money back, disputing charges, all that stuff before with credit cards. We've never had issues with that so far. Yes, we do want them, primarily to build credit for house buying in the future and for the points. But I definitly don't think they're a necessity.

I want both the purchase protection and receipt. Also, if I'm buying something expensive like a TV such as what we bought 4 years ago that was $800. I have some kind of bonus point ability through my cc. I then have the ability to seek out any issues with my purchase through my credit card company vs. just the cash payment.

We do this with the daycare too. We have payments put through on the credit card. At the end of the year we pay them in cash and have more points.

It's free money!

And as for traveling, I do not want to leave the US without a major CC. I have read enough horror stories but also the success stories of dealing with a credit card company when theft strikes.

Amex can have a new card sent to your hotel. Your bank may not be so responsive.

And when you have a house, I agree you want both. We've had a lack of power enough to know that having zero cash is foolish. But sometimes a disaster can hit quickly and it's easy to flip out the plastic rather than start to move funds.

Agree that keeping a balance is just not smart at all.

ShesSoCold · October 2018

Yikes, 8%?!?!?! I'd be waiting a bit too; you're smart.

I will say, though, that establishing good credit isn't as hard as it seems (at least for me). 5-7 years ago, I had 2 maxed out cards that I was only paying the minimum on, a car loan that was still new (so a bad utilization ratio) and late payments.

I've since paid everything off, haven't carried a balance or had a late payment in 4 years. My credit is already considered "excellent" and we've gotten the lowest interest rates possible on H's truck and our mortgage. My cards keep upping my max, which is a good thing for me since now I have a utilization ratio of less than 10% (and I'm more mature than I was before and can handle not maxing out the card).

All 3 of my cards (discover, amex and a capital one visa) have monthly credit score checking (without dinging) and at least the capital one and discover give you why and tips to improve. It's handy and pretty interesting to me.

littlemushroom · October 2018

We basically use our credit card as a debit card since we autopay the entire balance every month. We never carry a balance. We switched to using the CC because it had other perks on top of cashback/points as well.

Our CC includes travel insurance for trips paid for with the CC, price protection so we can get a refund of the difference if something drops in price, extended warranty on items purchased with the CC, etc. We didn't have to pay for an extended warranty since we bought our new TV with our CC, and we got money back when the price dropped a few weeks later. We haven't needed the travel insurance yet, but are glad to have it when something eventually happens.

We also save all our cashback bonuses each year and use it to pay for plane tickets when we travel.

maine7mob · October 2018

My new SIL is terrified of debt to the point where he never got a credit card and paid for everything in cash. He and my daughter had a hard time passing the credit check to rent their first apartment because of their lack of credit history (she has some, but just graduated from college last year). He finally got a credit card and has started to establish some credit. The best thing you can do to establish credit is to have some debt that you pay down each month. It's your history of managing your debt well, rather than not having any at all, that establishes credit.

short+sassy · October 2018

ShesSoCold said:

Yikes, 8%?!?!?! I'd be waiting a bit too; you're smart.

I will say, though, that establishing good credit isn't as hard as it seems (at least for me). 5-7 years ago, I had 2 maxed out cards that I was only paying the minimum on, a car loan that was still new (so a bad utilization ratio) and late payments.

I've since paid everything off, haven't carried a balance or had a late payment in 4 years. My credit is already considered "excellent" and we've gotten the lowest interest rates possible on H's truck and our mortgage. My cards keep upping my max, which is a good thing for me since now I have a utilization ratio of less than 10% (and I'm more mature than I was before and can handle not maxing out the card).

All 3 of my cards (discover, amex and a capital one visa) have monthly credit score checking (without dinging) and at least the capital one and discover give you why and tips to improve. It's handy and pretty interesting to me.

Interesting fact about 'cc utilization rates. That is about the only piece of a credit score that can be changed rapidly. Which can be good or bad, depending on which direction you are going in, lol! Everything else...missed payments, credit age, credit inquiries...take years to change and/or for negative items to fall off.

Here's the other wacky thing about utilization rates. It doesn't matter how low your credit limit is. If you're balance is more than 30% of the credit limit, the score can still start getting dinged. Even if the total debt is only a few hundred bucks. So, by this logic, a card with a $20K balance and $100K credit limit won't hurt someone's credit score at all. But a card with a $400 balance and a $500 limit will be a major, very detrimental ding to the score.

Example of how fast and how much utilization rates change credit scores:

A couple years ago, I used my credit cards to temporarily fund a duplex renovation. My utilization went from almost 0% to over 80% in a short period of time. And my credit score dropped, just as fast. I went from being in the 720's to the mid 600's (for most of that time). At my lowest, I was even in the 580s. Not one, single thing was different in my credit report. No missed payments. It was just the utilization rate that dropped me over 100 points in just a few months.

And then the vicious cycle started. Credit cards a person have will periodically do soft pulls on your credit. So, as my credit score dropped, most of my cards cut my credit limits also. Which made the utilization rate even worse. And my credit score dropped more. And so on and so on! It was incredibly frustrating.

My original plan had been to refi the property about 6 months after I purchased it and added all that equity to it. Except, by the time that happened, my credit score was too low for most banks to talk to me. And, the loans I did qualify for, had much higher interest rates.

I had no choice but to pay those 'cc's off the hard way. Scrimped and threw most of my disposable income at them for about 18 months. It was definitely not pretty. However, I watched with my Credit Karma account how fast my score rose, as I chopped down the utilization rate. About 6 months ago, I finally conquered 'cc debt mountain and am back to paying them off every month. Except the ones that have a promo 0% interest rate. And my credit score is finally back to the 720's.

climbingsingle · October 2018

So true about the utilization. Also, any time a company has offered to raise my limit, I always accept. Amex has raised my limit super high (that I NEVER would use), but it's helped raise my overall credit score.

short+sassy · October 2018

climbingwife said:

So true about the utilization. Also, any time a company has offered to raise my limit, I always accept. Amex has raised my limit super high (that I NEVER would use), but it's helped raise my overall credit score.

Yes!

But, oh, the big mistakes I've made over time. In my younger years, I applied for a 'cc and got turned down because I had "too much credit". So I canceled all the cards I didn't use very often. Now I know that is the worst thing to do. Sure wish I had some of those old cards still sitting on my report to improve my "credit age" AND raise the total of my "credit limits".

ShesSoCold · October 2018

short+sassy said:

climbingwife said:

So true about the utilization. Also, any time a company has offered to raise my limit, I always accept. Amex has raised my limit super high (that I NEVER would use), but it's helped raise my overall credit score.

Yes!
But, oh, the big mistakes I've made over time. In my younger years, I applied for a 'cc and got turned down because I had "too much credit". So I canceled all the cards I didn't use very often. Now I know that is the worst thing to do. Sure wish I had some of those old cards still sitting on my report to improve my "credit age" AND raise the total of my "credit limits".

Yes to both points!! I always raise that shit!

I was going to cancel my first card because it didn't have as good of a reward program but thankfully I didn't (and they changed me to a different card with better points but with the same account!). I also still have the Kohl's charge that I got as my first ever credit anything just for that same reason.

I was mad when I had to get my AmEx card for a Rolling Stones ticket presale because I didn't want an "inquiry". But now I LOVE that card and they're very generous with their limit increases. It's definitely a good card to have.

climbingsingle · October 2018

short+sassy said:

climbingwife said:

So true about the utilization. Also, any time a company has offered to raise my limit, I always accept. Amex has raised my limit super high (that I NEVER would use), but it's helped raise my overall credit score.

Yes!
But, oh, the big mistakes I've made over time. In my younger years, I applied for a 'cc and got turned down because I had "too much credit". So I canceled all the cards I didn't use very often. Now I know that is the worst thing to do. Sure wish I had some of those old cards still sitting on my report to improve my "credit age" AND raise the total of my "credit limits".

Gah I did something like that too in my early 20s!

I've basically come back from the dead with my credit score. I had really great credit in my early 20s. Then I co-signed for a car lease for my ex-H (he was H at the time). The car was repossessed after we split. He also had run up thousands of dollars on my credit cards. I spent many years in financial ruin. So to see my credit score now "excellent" is an amazing feeling.

banana468 · October 2018

ShesSoCold said:

short+sassy said:

climbingwife said:

So true about the utilization. Also, any time a company has offered to raise my limit, I always accept. Amex has raised my limit super high (that I NEVER would use), but it's helped raise my overall credit score.

Yes!
But, oh, the big mistakes I've made over time. In my younger years, I applied for a 'cc and got turned down because I had "too much credit". So I canceled all the cards I didn't use very often. Now I know that is the worst thing to do. Sure wish I had some of those old cards still sitting on my report to improve my "credit age" AND raise the total of my "credit limits".

Yes to both points!! I always raise that shit!

I was going to cancel my first card because it didn't have as good of a reward program but thankfully I didn't (and they changed me to a different card with better points but with the same account!). I also still have the Kohl's charge that I got as my first ever credit anything just for that same reason.

I was mad when I had to get my AmEx card for a Rolling Stones ticket presale because I didn't want an "inquiry". But now I LOVE that card and they're very generous with their limit increases. It's definitely a good card to have.

LOVE Amex. They called DH because of a suspicious charge at a gas station in PA was showing up on his card.

He was IN the gas station when they called.

Compare that to BofA who waited until days after DH was making suspicious purchases in Poland.

short+sassy · October 2018

For those of you with Amex cards, the one I have has a program I like. I think they call it "Plan It".

Any purchase over $200 can be put on "Plan It". You can choose an 18, 24, or 36 month plan for that specific purchase. They then take that purchase amount and divide it by however many months you chose. That monthly amount then gets added to your minimum payment. They charge no interest to any charges on "Plan It", but there is a small monthly fee that works out to be 7%/year. No matter which term length is chosen. You can also pay it off whenever you want and avoid any additional monthly fees.

Credit score, how does this work?

Re: Credit score, how does this work?

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