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Old 08-20-2019, 03:00 PM   #1
dclifton
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Default No Credit Question

My wife and I are in our late 20s and looking to buy a house or land an build soon.

I have really good credit but my wife has zero credit history to her name.

I have very little debt to my name. Just some Farm equipment that was 0% interest so why not use there money.

Question is what Credit Card is the best option for her to build credit.

I hate having to pay high interest rates on money that we dont need just to build her credit. But i am told that you dont need to pay the card off every month.

There is thousands of credit cards out there so school me on the best route.

Thanks for all the help!
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Old 08-20-2019, 03:07 PM   #2
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Originally Posted by dclifton View Post
I hate having to pay high interest rates on money that we dont need just to build her credit. But i am told that you dont need to pay the card off every month.
This statement doest make any sense. Dont put things are a card you cant pay off before the end of the billing cycle.

Do you have any high limit cards you can add her as an authorized user.
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Old 08-20-2019, 03:09 PM   #3
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This statement doest make any sense. Dont put things are a card you cant pay off before the end of the billing cycle.

Do you have any high limit cards you can add her as an authorized user.
I was told that you dont pay off the card every month but make payments against it every month. Thats just what I have been told.

I would rather just pay it off every month.
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Old 08-20-2019, 03:11 PM   #4
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Depends what kind of Rewards you want.

I'd say find a Cash Back card like the Chase Freedom and put groceries or some smaller bills on it and pay it off in full every month.
You don't technically have to pay it off in full but that defeats the purpose of building her credit up and wanting a really high score in my opinion. Its a slippery slope and just paying it off is best.

The trick is not letting the amount get away from her like it happens with 80% of the population...
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Old 08-20-2019, 03:12 PM   #5
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I've never understood this logic - so to have a credit history you have to have debt. Stupid, but that's the game the banks want to pay.

Here's what I would do - open a $5000 credit card. Month 1 - charge a dinner or something on it. Pay it off. Don't use it anymore. There - now she has a credit history that shows she pays every month. Actually, it will state "Pays as Agreed".

I have Simmons Bank Master Card with a low limit - only $4000. The interest rate is 8.5%.
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Old 08-20-2019, 03:12 PM   #6
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Quote:
Originally Posted by dclifton View Post
I was told that you dont pay off the card every month but make payments against it every month. Thats just what I have been told.

I would rather just pay it off every month.
I dont believe you have to pay interest to help you out.
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Old 08-20-2019, 03:13 PM   #7
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from Experian...

"There is a common myth that carrying a balance on your credit card from month to month can benefit your credit scores, but that is not true. Ideally, you should pay off your credit card in full every month."
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Old 08-20-2019, 03:13 PM   #8
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Depends what kind of Rewards you want.

I'd say find a Cash Back card like the Chase Freedom and put groceries or some smaller bills on it and pay it off in full every month. You don't technically have to pay it off in full but that defeats the purpose of building her credit up and wanting a really high score in my opinion.

The trick is not letting the amount get away from her like it happens with 80% of the population...
This was the way i was leaning was Chase Freedom... I was just going to let her pick up groceries gas etc on it. Then pay most of it off every month. My wife is as tight as fiddle string so i dont have to worry about her keeping up with it.
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Old 08-20-2019, 03:14 PM   #9
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If you have a line of credit (credit card), look at your credit history for free. It will show you what I'm talking about.
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Old 08-20-2019, 03:14 PM   #10
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Quote:
Originally Posted by duckmanep View Post
from Experian...

"There is a common myth that carrying a balance on your credit card from month to month can benefit your credit scores, but that is not true. Ideally, you should pay off your credit card in full every month."
^^^^ Ding Ding Ding! ^^^ Winner!
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Old 08-20-2019, 03:15 PM   #11
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Why not pay it off? I'm pretty sure that will not hurt credit.
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Old 08-20-2019, 03:16 PM   #12
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Quote:
Originally Posted by Dusty Britches View Post
I've never understood this logic - so to have a credit history you have to have debt. Stupid, but that's the game the banks want to pay.

Here's what I would do - open a $5000 credit card. Month 1 - charge a dinner or something on it. Pay it off. Don't use it anymore. There - now she has a credit history that shows she pays every month. Actually, it will state "Pays as Agreed".

I have Simmons Bank Master Card with a low limit - only $4000. The interest rate is 8.5%.
I agree. 99% of the things we own trucks, Cows, Equipment etc we have bought and paid for cash. So it is frustrating. But its there game.
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Old 08-20-2019, 03:16 PM   #13
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Originally Posted by dclifton View Post
This was the way i was leaning was Chase Freedom... I was just going to let her pick up groceries gas etc on it. Then pay most of it off every month. My wife is as tight as fiddle string so i dont have to worry about her keeping up with it.
Sounds like a solid plan.
Just have to get her to Pass the application for the Card with no credit history but I would be surprised if she did not. Pretty quick and easy to find out.
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Old 08-20-2019, 03:16 PM   #14
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And - one other question - did you talk to the bank or Farm Credit or Capital Farm Credit to get pre approved just to see what they actually care about? They may say that your credit history is sufficient.
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Old 08-20-2019, 03:18 PM   #15
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Quote:
Originally Posted by duckmanep View Post
from Experian...

"There is a common myth that carrying a balance on your credit card from month to month can benefit your credit scores, but that is not true. Ideally, you should pay off your credit card in full every month."
Well good. Ill go that route and just pay it off every month. I dont want any credit card debt. I just thought well maybe we could get some cash back rewards since we are spending the money anyways. So it would atleast have some perks and build her credit.
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Old 08-20-2019, 03:19 PM   #16
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Find you a local state bank/land bank/credit union that "manually underwrites" loans and actually looks at your finances instead of just a credit score.
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Old 08-20-2019, 03:20 PM   #17
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Check out this website, and see which one works best for you:

https://www.nerdwallet.com/best/credit-cards/rewards
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Old 08-20-2019, 03:21 PM   #18
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Quote:
Originally Posted by Dusty Britches View Post
And - one other question - did you talk to the bank or Farm Credit or Capital Farm Credit to get pre approved just to see what they actually care about? They may say that your credit history is sufficient.
Well it may be. And i plant to sit down with a few different banks soon.

We have some friends of ours that where in an almost identical situation and the wouldn't count her "income" with his.

So Example. He makes 100k per year she makes 50k. They would not let them use her income as part of the total household income until she had established credit.

So that got me to thinking i might should help her build her credit some while we are looking around.

We are still maybe a year out from buying anything unless something real close to the family ranch came up for sale.
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Old 08-20-2019, 03:22 PM   #19
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Get her a Discover card and tell her to buy fuel on it. Pay it off every month. Give it a few months and she’ll notice a difference.
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Old 08-20-2019, 03:26 PM   #20
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also, check out a site like credit karma that shows your score. that way you can see if you are making a difference.
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Old 08-20-2019, 03:44 PM   #21
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Credit Card can increase your score, but owing too much on them can hurt your score. Get the one you can take advantage of the rewards. I have two main cards, Amazon and American Airlines. THe AA card gave me 50000 miles and a $250 statement credit. That was enough to cover my flight to Hawaii.

Pay them off every month. If you know you are going to apply for credit don't charge anything on the the prior month so they will be reporting $0 owing.

Last edited by BrianL; 08-20-2019 at 03:47 PM.
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Old 08-20-2019, 03:45 PM   #22
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Without reading every post, have you spoken with a lender? They can offer some good information, and as much as I hate to say this, probably better information than some of the people here.
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Old 08-20-2019, 03:51 PM   #23
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I have zero debt -- no house, truck, car -- and all my bills that can be paid via a CC are done so--and paid off monthly. My credit score is near max.
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Old 08-20-2019, 04:21 PM   #24
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Credit should be looked at as your ability to repay a debt. The better the score, the better you are at paying back the debt. At least that is what the score is supposed to indicate.

It takes a little time to generate a score. Some credit institutions only use a score and your income to grant credit. Others like real estate lenders are gonna dive deeper into your credit history (the underwriters).

I have found through my research that the magic number is 1-2 years of established credit history. Sure you can get a decent credit score after a couple months, but don't expect the bank to loan you hundreds of thousands of dollars based on that.

The credit score typically is based on these factors:

1. Payment history
2. Debt to credit limit ratio
3. Length of credit (don't underestimate this one)
4. Types of credit

The FICO score is fascinating. Not only that, but there are many different FICO scores that are used depending on what type of loan you are applying for. There are books dedicated to this topic alone.
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Old 08-20-2019, 04:23 PM   #25
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Quote:
Originally Posted by BrianL View Post
Credit Card can increase your score, but owing too much on them can hurt your score. Get the one you can take advantage of the rewards. I have two main cards, Amazon and American Airlines. THe AA card gave me 50000 miles and a $250 statement credit. That was enough to cover my flight to Hawaii.

Pay them off every month. If you know you are going to apply for credit don't charge anything on the the prior month so they will be reporting $0 owing.
I have thought seriously about applying for one of the AA cars on a flight myself. They always have 50K point sign on bonus in flight.

I just dont fly alot.. The amazon credit card would get way more use and benefits.
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Old 08-20-2019, 04:26 PM   #26
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You're thinking too much IMO

Just go to the bank and see what kind of home loan you qualify for.

If the bank will not give you a loan that's big enough for you then you need to look at your finances. I bet that won't be an issue though.
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Old 08-20-2019, 04:27 PM   #27
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Quote:
Originally Posted by dclifton View Post
This was the way i was leaning was Chase Freedom... I was just going to let her pick up groceries gas etc on it. Then pay most of it off every month. My wife is as tight as fiddle string so i dont have to worry about her keeping up with it.
I have a chase freedom card. I put absolutely everything I can on it and pay it off every month. I usually save up the cash back for a while and then I always put it toward the balance.

Last edited by adam_p; 08-20-2019 at 04:32 PM.
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Old 08-20-2019, 04:31 PM   #28
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You're thinking too much IMO

Just go to the bank and see what kind of home loan you qualify for.

If the bank will not give you a loan that's big enough for you then you need to look at your finances. I bet that won't be an issue though.
You shouldn't go down that road without understanding your own credit. That is probably the biggest mistake people make when doing home loans. You should know your credit as well as the lender. There are several ways to get an idea of how you stand credit wise without going to the bank to get qualified. Besides, that will also ding the credit score.
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Old 08-20-2019, 04:42 PM   #29
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We charge about 2K/month. I pay the bill off in full every month. Once or twice a year, I get a $250 credit statement with the cash back rewards. Both of our credit scores are way up there. I have not had any carryover credit card debt in years.

Only charging what you can afford to pay off every month is the only way to go!!!!!

Bisch


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Last edited by Bisch; 08-20-2019 at 04:45 PM.
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Old 08-20-2019, 04:42 PM   #30
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I would ask about manual underwriting.
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Old 08-20-2019, 04:43 PM   #31
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Quote:
Originally Posted by dclifton View Post
I was told that you dont pay off the card every month but make payments against it every month. Thats just what I have been told.

I would rather just pay it off every month.
This is false. Keeping a balance hurts you. Pay it off every month. My credit was stalled out at 740-750. I got a chase freedom card a year and a half ago and pay it off every month if I use it. Usually use it for big purchases only for the points. My credit is 820+ now. Iím 29. Fixing to turn 30. Iím pleased with that. I canít give you advice on which card is best.

What I think you were told and misunderstood is paying off a vehicle early isnít good credit wise. They like to see several years of payments. This isnít fact but what Iím told. In my case it seems to be true.

Also on revolving credit. 0% Best Buy credit card etc. charge now more than 30% and keep making payments. I hate payments.
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Old 08-20-2019, 04:48 PM   #32
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Quote:
Originally Posted by Blitz View Post
You shouldn't go down that road without understanding your own credit. That is probably the biggest mistake people make when doing home loans. You should know your credit as well as the lender. There are several ways to get an idea of how you stand credit wise without going to the bank to get qualified. Besides, that will also ding the credit score.
He said he has good credit and his wife has none. If that's true I'm just saying he should be fine getting a loan for a house. Unless he's looking for a 500k loan and only makes $10/hr.
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Old 08-20-2019, 04:49 PM   #33
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Originally Posted by dclifton View Post
I have thought seriously about applying for one of the AA cars on a flight myself. They always have 50K point sign on bonus in flight.

I just dont fly alot.. The amazon credit card would get way more use and benefits.
You have heard and listened to some pretty bad info so far. I would go to a bank or lender and talk to them before doing anything.
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Old 08-20-2019, 04:51 PM   #34
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I did a secured loan with selflender.com recently. No issues. Payed them 48 a month for 12 months and they cut you a check for 550 when your done with a big boost to my credit.
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Old 08-20-2019, 05:10 PM   #35
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Thanks for the input guys I was curious to see the opinions.

If nothing else I learned to pay the card off every month.
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Old 08-20-2019, 05:12 PM   #36
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People way over think this. Just get a major credit card - Visa, Mastercard, Amex, whatever. Preferably get one with cash back or rewards points.

Use the credit card on some of your everyday type purchases; i.e. gas, groceries, dinner, etc. Pay off the balance in full each monthly billing cycle. Actually, major credit cards carry much better fraud protection than your debit card, so there's other benefits to this. I actually like to consolidate many of my expenses as compared to frequently using a debit card or always needing lots of cash on had.

That's it. By doing that, you can establish some credit. And yes, carrying a balance is a complete myth in regards to building credit. Actually, even if you pay off your credit card in full based on the monthly billing statement, you still will have a balance on the card. This is because your monthly statement has a cut-off date and by the time you get it and pay it, you probably already have made charges to hit the next billing cycle.
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Old 08-20-2019, 05:19 PM   #37
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Quote:
Originally Posted by duckmanep View Post
from Experian...

"There is a common myth that carrying a balance on your credit card from month to month can benefit your credit scores, but that is not true. Ideally, you should pay off your credit card in full every month."
I call BS on that... I had a score over 800 when I carried a balance in my late 20s/early 30s. Now I have 0 debt and pay everything off monthly and my score dropped to around 725... one month I forgot to pay my balance off and my score jumped to 760. Next month I paid it all off and it dropped right back to 725.

The more money they make off you by interest the more likely you are to get credit/loans.
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Old 08-20-2019, 07:35 PM   #38
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I pay all of mine in full every month and our score has been in the low 800s for years.
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Old 08-20-2019, 07:41 PM   #39
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Quote:
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I call BS on that... I had a score over 800 when I carried a balance in my late 20s/early 30s. Now I have 0 debt and pay everything off monthly and my score dropped to around 725... one month I forgot to pay my balance off and my score jumped to 760. Next month I paid it all off and it dropped right back to 725.

The more money they make off you by interest the more likely you are to get credit/loans.
I have 827. Zero debt, own House and cars outright, and pay off credit card every month.

Paid off all debt two years ago and it hasnít changed.
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Old 08-20-2019, 08:01 PM   #40
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Main concern I would have would be a bunch of inquiries or new accounts right when you want to buy. I think this would be the biggest detriment to your score. Lump all credit inquiries to a short period so you can explain it.


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Old 08-20-2019, 08:05 PM   #41
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Just pick one with no fee and that will benefit yíall. Discover IT card is a good general spending card with cash back. Pay off in full every month.


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Old 08-20-2019, 08:05 PM   #42
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Here’s a suggestion.

If you have a credit card/overdraft on your bank loan, whatever that’s revolving.

You can make her an Authorized User and she will adopt all the credit history of that account. Waaa Laaa instant credit history.
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Old 08-20-2019, 08:07 PM   #43
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Quote:
Originally Posted by Reelthreat View Post
I call BS on that... I had a score over 800 when I carried a balance in my late 20s/early 30s. Now I have 0 debt and pay everything off monthly and my score dropped to around 725... one month I forgot to pay my balance off and my score jumped to 760. Next month I paid it all off and it dropped right back to 725.

The more money they make off you by interest the more likely you are to get credit/loans.
This is absolutely not accurate. Complete BS. Thereís much more to that story youíre not telling.
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Old 08-20-2019, 08:09 PM   #44
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Kinda semi-off point, but, if you and your wife haven't gone through the "Financial Peace" course, i'd suggest doing so. Very worthwhile.
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Old 08-22-2019, 09:47 AM   #45
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Originally Posted by 12RingKing View Post
This is absolutely not accurate. Complete BS. Thereís much more to that story youíre not telling.
There isn't other than not using credit for 10 years. I paid everything off before I got married in 07 and bought a house with no debt. Canceled 3 cards and didn't use or apply for credit until last year to finance my wife's SUV. Didn't like the rate so we paid cash. Got a card for rewards where I can monitor my score and it did what I said.
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Old 08-22-2019, 10:16 AM   #46
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There isn't other than not using credit for 10 years. I paid everything off before I got married in 07 and bought a house with no debt. Canceled 3 cards and didn't use or apply for credit until last year to finance my wife's SUV. Didn't like the rate so we paid cash. Got a card for rewards where I can monitor my score and it did what I said.

In the example you originally gave it was carry balance vs paying off. only thing that hurts you is % of credit available vs used. You get over a certain % it hurts you.

The example you are giving now is stoping or ending credit history. Big difference in stopping credit history vs available credit % usage.

Huge difference in not using a card and canceling it.


Having a credit card with 1000 line of credit and charging up 700 in a pay cycle can hurt your score compared to a 10000 limit and 700 in charges which won’t
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Old 08-22-2019, 11:28 AM   #47
BrianL
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Remember your credit is a snapshot in time. If you owe $4000 on a $6000 when your CC reports its monthly file to the credit bureau, it will show that same balance for the next 30 days.

It also is "what have you done lately" . It starts at present debt and goes back usually 7 years. If you haven't done anything in 7 years, you are an unknown. The longer you go without credit the lower your score will drop, if it was really high. The number is just a risk model. It needs data to work.
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Old 08-22-2019, 11:55 AM   #48
cbd10pt
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Leave $5 on it vs. Paying down to 0. It helps score.
Intrest on $5 won't kill you .
Capital one is easiest to get
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Old 08-22-2019, 12:06 PM   #49
txrevolution
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Quote:
Originally Posted by cbd10pt View Post
Leave $5 on it vs. Paying down to 0. It helps score.
Intrest on $5 won't kill you .
Capital one is easiest to get
Couple years ago when we were building our house, this was the advice given to my wife and I directly by the lender we were working with. The way she explained it to us was this "the bureau looks back at your balance month-to-month. if they see exact $0.00 month after month, their computer scores that as you didnt use the card and doesnt give you expenses you ran up and balance you paid off. so pay it down to just a couple of bucks instead of $0.00 and now their computer captures you paying it down month after month"
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Old 08-22-2019, 02:25 PM   #50
Reelthreat
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Quote:
Originally Posted by Texans42 View Post
In the example you originally gave it was carry balance vs paying off. only thing that hurts you is % of credit available vs used. You get over a certain % it hurts you.

The example you are giving now is stoping or ending credit history. Big difference in stopping credit history vs available credit % usage.

Huge difference in not using a card and canceling it.


Having a credit card with 1000 line of credit and charging up 700 in a pay cycle can hurt your score compared to a 10000 limit and 700 in charges which won’t
I have one card now with a $7500 limit and my score is around 725. I put about $6000 a month on it... one month I didn't pay it off because I forgot to pay it in time and my score jumped to 760. The next cycle I paid it off and the current month before the cycle ended so it showed a 0 balance and my score dropped back to 725.

They might not say that it improves your score to have a balance but anytime I have a balance my score goes up significantly.

Honestly I really don't care what my score is... if I want something I can just buy it cash. The only reason I have a card is for the rewards. If you are a preferred BofA member they give you a 50% bonus so I make/save about $2000 a year using it instead of a debit card.

BTW, the intention of my original comment to show that when I carried a balance my score was higher than when I don't.

Last edited by Reelthreat; 08-22-2019 at 02:36 PM.
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