I too have ruined my credit
 

In late December 2011/early January 2012 I used my meager bonus to pay off my small credit card balance and the remainder on my car loan. Since then I've made it a point to keep ahead of my CC balance. So, not only did I not pay any interest, I got ~$300 in cash rebates, which gets deposited straight to my account.

FWIW, my FICO score was ~15pts lower when I refi'd this summer; I wonder if this had anything to do with it. I only closed one account this year - my car loan, and I had looked into doing a refi in the spring, but never went through with it, so there may have been several inquiries into my credit.

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You are viewed as a "risk" to credit companies because you are smart enough pay off your debt. Backward from the consumer side of things.

Multiple inquiries lower your rating. Don't ask me why, but they do. Paying off the CCs will raise your score, esp. if you have a lot of CC debt.

I'm not a banker, but my wife was a loan officer.

The less you need credit the better your credit score becomes.

Go to annualcreditreport.com and pull a free copy of your credit reports. I think you have to pay a few dollars to get a score, but if you do, it should tell you the top four reasons your score is lower than it could be. You probably only have to see the reasons on one bureau to know the answer.

It makes sense.

You must USE credit to be worthwhile to someone who's trying to lend money to you.

When you paid off your balances it showed the lender that you were no longer a source of revenue for them.

If you USE, but MAINTAIN, a certain amount of debt, you show that you are LOW-RISK but still PROFITABLE at the same time.


If you really want to have a good credit score (which may or may not be in your interest),

Open an account (or accounts) for which you feel comfortable carrying a balance of between 20-30% of your total unsecured limit.

People who have open (but unused) lines of credit generally will have lower credit scores than responsible borrowers. Doesn't make sense, but it does make sense.

When I refinanced my house a few years ago, my credit score was noticeably down. It turned out that a 100 phone bill from AZ had finally caught up to me. Paying that restored my credit.

Today I have zero CC debt, and my credit score is in the low 800s, even though I make less money now than I did a few years ago. I still have a few cards out there, but I rarely use a CC anymore, as I use a debit card on my business now, and all my invoices are payment upon receipt.

You should look into your credit rating, as there may be a stain on it that needs to be corrected. A ten plus year old debt I never even knew I had lowered my score by 100 points. Apparently some collection agency wanted a commission, and tracked me down for the money. I would have never known, as they never contacted me. When I found out about the debt, the phone company in AZ referred me to the collection agency.

Go figure. At the same time, we cleaned up my wife's credit as well. I have no idea what was involved with that.

When I got my first mortgage, I had a credit card, but had never had a balance past 30 days in my life, or owed more than 1000 dollars on my card ever. I had never had a car loan, and had always paid cash for cars. According to the mortgage broker, my salary was too low to qualify for my loan, but because my credit score was so high, and because I had such a good work record, a local bank gave me the loan anyway.

That would very rarely happen today.

I imagine if more people did what I did this past year, these rebate programs would disappear. I basically got $300 for free. by exercising some serious discipline.

Because it looks to the computer you are desperate to find money and you are going everywhere to get a loan.

This happened to me some years ago. I was purchasing a property. I went to one mortgage broker who ran my credit. I had a 700ish score. He in turn sent my information to all the investors he used (it was about 6) who all ran my credit. A few came back and said they would underwrite the loan however they wanted an extra point in interest due to my credit score. I asked the broker what was wrong with a 700 score? He said my score was in the upper 600. I showed him the report he ran a few days earlier showing 700. He ran my report again. My score came back in the mid 600 range. He then explained it was probably due to the amount of inquiries. My report was run 8 times in less than two weeks. He said itgo back to normal in a few months. Which it did. I am now very cautious when getting loans.

My wife and I have done everything wrong regarding credit. I didn't have a credit card until I was 22, neither of us have ever carried a credit card balance, we rarely borrow money and pay off all of our loans early, and are both within a few points of having perfect credit. I've quit trying to figure out how it works.

What I know: Your total credit score is basically a pie chart divided roughly by thirds. First 1/3 is comprised of on-time payments, this is self explanatory. 2nd 1/3 is account balances VS account limits obviously the wider margins the better you look. Remaining 1/3 is length of credit history which is a combination of how long you have had credit and how long each account has been in use, the longer each of those the better.

Other variables are: credit inquiries, account inactivity, closing existing accounts, opening new accounts, your total income to debt ratio

"What would be The Free Market System? for $1000, Alex".

My wife's parents were both born and raised on a farm. They both learned not to go into debt at a young age. They bought a lot in an inexpensive area and built the house, and paid cash for everything. They worked hard, raised two kids and never borrowed money. They accumulated a large savings and investment portfolio. FIL died several years ago. Mil decides it is time to travel to Ireland with some friends. A credit card with a decent limit is pretty much necessary to by airline tickets and travel. She went to the bank where her checking and savings were and asked the bank for a credit card. She had no credit history. The bank manager said she did not qualify but since he knew her for 50 years and where she now lives and what her bank balance he approved her for a Platinum Card with a large limit.

This thread reminds me of my X-brother in law. He measured his wealth by how much money he could borrow.

Later, he declared bankruptcy. Which on the face of it seems like failure, but he settled with is creditors for something like 10-cents on the dollar. Makes me wonder why I bother paying my bills.

I really don't care about my FICO score anymore. I have my mortgage, I don't need a new car and I don't want any new credit cards. Better for me. Fewer expenses. If Fair Isaac doesn't like that I don't want to live in indentured servitude, they can go pound sand. I don't really need them (or new credit) anytime soon.

So it would seem that you want a good FICO score, but not too good.

Each inquiry is 1-2 point off your score. However, when similar inquiries are all bunched together (such as mortgage lenders or car loan lenders) within a few days of each other, it's only supposed to count as one inquiry. Notice I said "supposed". The reason is obvious - you're not trying to find all sorts of credit everywhere, but rather shopping for the best rate, a responsible thing to do. If it were me, I'd call equifax or transunion and have it corrected.

That's not it exactly. What they like to see is someone with high limits and low balances, showing you use credit responsibly (ie, don't actually need it). What's trashed some people's scores is not paying off their balance, but closing the card account afterward. Having $20k available in credit and only using $1000 is better than having $5k available with the same amount.

I wonder how long I can keep getting away with this

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