Comments on: A Life Without Debt: A High Credit Score

By: JJ

JJ — Fri, 05 Mar 2010 13:21:39 +0000

Your FIOC score impacts every financial transaction you make. It affects how much you pay for insurance whether it be car, home, renters, life, etc. The lower the score the higher your premiums. It also will determine if you get an apartment or not. Also NEVER close any of your accounts. That is a BIG mistake.

By: cb

cb — Fri, 05 Mar 2010 04:00:58 +0000

I have a credit score of 785 and I was told that I am 15 points shy of perfect. I wasn’t aware there was a number above 800. I have 10k on one card at a fixed until its paid off rate. My available credit is about 60k. I’m assuming they will lower available credit at some point. I owe nothing on my one card, I have a fixed 5.9% for life of balance (10k) and I pay the other one off every month.

Many credit cards will be charging customers an annual fee who don’t charge a set amount each year. I don’t think a good credit score is worth being blackmailed into an annual fee. Are you willing to pay one of your cards a 60.00 annual fee for not charging enough? I’ve had Citibank for 20 years and I will NOT pay them an annual fee just to keep a high credit score.

By: John

John — Wed, 04 Nov 2009 13:49:28 +0000

I never worry about my credit score since I pay cash for everything. If you don’t finance anything you don’t need a credit score.

By: gladwyn

gladwyn — Sun, 23 Aug 2009 09:27:53 +0000

FICO score calculation has become a source of debate. You never know which parameters do they actually treat as high. May be the credit history, the type of credit, credit limit. But over the time the FICO score calculation has improved. It may take a few more years to weed out the anomalies.

By: Callie

Callie — Wed, 19 Aug 2009 19:34:34 +0000

Great post! If everyone treated credit cards like this, we’d all have a lot fewer problems today.

I know that FICO looks at the average age of your credit cards — the older they are, the higher your score. The best advice is not to close an account once it’s paid off, especially if it’s a few years ago.

And I’d like to respond to Gail: I totally agree about how nonsensical it is to tie insurance premiums to credit scores. Just as it’s funny that a 25-year-old man’s car insurance rates go down — are they magically more mature than a 24-year old?

Again, great post and thanks for sharing!

By: Gail

Gail — Wed, 19 Aug 2009 11:59:39 +0000

20-30 years ago it seemed that except for wanting to take out a mortgage, no one ever even thought about their credit score. Now you see something about it every day. When you read most discussions about it, the people who have the lowest score due to being swamped in debt and bills they can’t pay are the ones hanging on tighest to their creidt cards because they think it will help their score (at least according to them). A person with no debts should have a high score, but then they usually don’t need to ‘cash in’ on their FICO score because they pay cash for what they need. I don’t understand why someone’s fire and car insurance would be tied to their FICO score, (maybe the insurance companies think someone with a lower score will deliberatly cause/make a claim to raise money?!)

I suspect after this latest economic fiasco, FICO scores along with everything else is going to be looked at differently.

By: Robert

Robert — Tue, 18 Aug 2009 17:04:45 +0000

Make the commitment to live: Debt Free and don’t look back. Not having credit cards will save you from the chance of the credit card companies trying to cheat you. They can impose anything on us as long as we owe. You won’t need a FICO score.

By: Monkey Mama

Monkey Mama — Tue, 18 Aug 2009 16:48:21 +0000

To some of the other commenters – we live in a FICO society. My low insurance rates and employability depend on good FICO Scores (I am in the financial field). OF course FICO is important, even if you don’t borrow money.

To Sadie – very true. My score has always been high 700s/low 800s. We have a mortgage and credit cards we pay off every month. I did a series of 0% credit card arbitrage last 2 years, and my score went up 30 points when I paid off the cards. I also never keep old credit cards open. My credit card history only goes back 2-3 years, though I’ve had cards for 15+ years. (Though truth is – those old cards stay on your report for a long while).

Mortgage lenders and car sales people will always tell you that you have to have car loans and keep balances to build up a credit score. Most truly believe it. It can be frustrating trying to educate people sometimes – truth is no one fully understands FICO. I do everything “wrong” except that I always pay my cards and mortgage on time. That does seem to be the “secret” to a good score.

By: Jackie

Jackie — Tue, 18 Aug 2009 15:03:20 +0000

Sorry, let me clarify a bit.

I hate seeing people make avoidable mistakes when they are in the process of trying to clean up their financial lives. They have the right idea, they are motivated and then they still get discouraged by a misstep because they simply didn’t know the sometimes counterintuitive rules used by the credit bureaus.

By: Jackie

Jackie — Tue, 18 Aug 2009 15:00:27 +0000

You said it yourself, ” I don