Ask me anything about your Credit Score

SossMan · #1 02-20-2007, 07:11 PM

I've been meaning to do this for a while and I keep getting PMs about it, so have at it.

Chrisman886 · #2 02-20-2007, 07:41 PM

Hey Soss --

I've had only one credit card for nearly 8 years now. My credit score is 780. I've heard that 2-3 cards boosts your score as opposed to only one. Is the true, and is this really necessary as my score is already pretty high?

Strickly Bidness · #3 02-20-2007, 07:43 PM

what did I do to make mine so good? Or am I just a lucky SOB?

SossMan · #4 02-20-2007, 08:11 PM

[ QUOTE ]
Hey Soss --

I've had only one credit card for nearly 8 years now. My credit score is 780. I've heard that 2-3 cards boosts your score as opposed to only one. Is the true, and is this really necessary as my score is already pretty high?

[/ QUOTE ]

I will probably say this over and over again, but the single biggest factor is making timely payments.

That being said, the difference between someone who never has any missed payments, no derogatory credit, etc..and has a 700 vs. someone who has a 780+ is simply length of accounts. Adding a couple more will temporarily hurt your score due to the inquiries and the new accounts, but that will eventually go away (4-6 months before they start helping you). Whatever you do, don't close the one you have had for 8 years. That's gold. Keep it active and make sure you use it enough to have the company continue to report activity on it to the CBs.

One of the biggest mistakes people make is to consolidate their older cards with great deep history onto a new card because of some 0% balance transfer or something. You can do the balance transfer, just don't close out the old account.

That being said...if you have a 780, you are likely fine so long as you have a few other tradelines (auto loan, mortgage, etc...)

SossMan · #5 02-20-2007, 08:13 PM

[ QUOTE ]
what did I do to make mine so good? Or am I just a lucky SOB?

[/ QUOTE ]

You live in Indiana. I mean, how much debt could you possibly rack up. I've heard that you can get hookers and blow out there for the price of a 6 pack of Coors Original out here.

ilikeaces86_ · #6 02-20-2007, 08:15 PM

Is it true that to get a great credit score u have to take out actual loans and not just use and pay your credit cards?

latefordinner · #7 02-20-2007, 08:38 PM

so I still don't understand why late payments hurt your score so much - I have a truly godawful credit score - like 560 last time I checked - because and only because I have gone through periods of life where I am unable to pay a bill on time (through irresponsibility not lacking the funds)- yet I always end up paying (no defaults) so in essence credit card companies make even MORE off me than the already outrageous interest rates they charge me (25.6% booyah) because I pay once every 3 months everything that is due plus all their crappy late payment fees. i know its supposedly a risk-metric, but i wonder if late payments correlate so strongly with risk of default.

also, i have a car repossession (that I paid off with cash but it shouldnt have been repossessed in the first place) that i have been fighting for 6 months to get taken off my credit record - the car leasing company agrees that they made a mistake (at least verbally) but they say now that they have reported it it can't be taken off - true or untrue?

i don't really care about my credit score as i feel pretty strongly about never going into debt again beyond student loans - even to buy a house - but it might be nice to have that option at somepoint -

also i have 17 traffic tickets (don't ask) from 5+ years ago (that were paid off) that JUST went to a collection agency a couple months ago and now show up as defaulted debt - i'm not planning on paying them (again) nor flying across the country to fight them in court and will just ignore them until they stop sending notices - why does this show up on my credit history when it wasn't a loan that i'm failing to pay back but contested civil penalties?

Thremp · #8 02-20-2007, 08:49 PM

If my credit is busto... How do I fix is ASAP?

DesertCat · #9 02-20-2007, 08:56 PM

[ QUOTE ]
so I still don't understand why late payments hurt your score so much - I have a truly godawful credit score - like 560 last time I checked - because and only because I have gone through periods of life where I am unable to pay a bill on time (through irresponsibility not lacking the funds)- yet I always end up paying (no defaults) so in essence credit card companies make even MORE off me than the already outrageous interest rates they charge me (25.6% booyah) because I pay once every 3 months everything that is due plus all their crappy late payment fees. i know its supposedly a risk-metric, but i wonder if late payments correlate so strongly with risk of default.

also, i have a car repossession (that I paid off with cash but it shouldnt have been repossessed in the first place) that i have been fighting for 6 months to get taken off my credit record - the car leasing company agrees that they made a mistake (at least verbally) but they say now that they have reported it it can't be taken off - true or untrue?

i don't really care about my credit score as i feel pretty strongly about never going into debt again beyond student loans - even to buy a house - but it might be nice to have that option at somepoint -

also i have 17 traffic tickets (don't ask) from 5+ years ago (that were paid off) that JUST went to a collection agency a couple months ago and now show up as defaulted debt - i'm not planning on paying them (again) nor flying across the country to fight them in court and will just ignore them until they stop sending notices - why does this show up on my credit history when it wasn't a loan that i'm failing to pay back but contested civil penalties?

[/ QUOTE ]

I don't understand this post. You are wondering why you are considered a credit risk? You regularly pay late, you had a car repossessed, and you have 17 traffic tickets.

Don't you think the odds of you saying "f it I'm not going to pay my bills" are a bit greater than the average random guy who's always paid his bills on time?

You understand that lenders don't know why you didn't pay on time, and probably don't care? Not paying because you don't feel like it is probably worse than not paying because you are broke.

SossMan · #10 02-20-2007, 08:56 PM

[ QUOTE ]
Is it true that to get a great credit score u have to take out actual loans and not just use and pay your credit cards?

[/ QUOTE ]

Somewhat. They are looking for good credit mix. Having an auto loan, two credit cards, a mortgage, and a student loan all paid on time and not just recently opened is close to ideal. Every situation is different, though. In general, it will help if you get a good mix of obligations without overdoing it (after the initial dip for having a new account).