Have you had any credit score wins lately?

[ronb]

I got through life fine without paying attention to credit. But then I realized that there's a lot less worry if you just get a decent credit score.

For employers... yes, they pull credit. I was always a little worried I may not get a job just because of no credit.

Same story goes for a mortgage, yes I can get one without credit but will it be the best mortgage possible? Unlikely.

Plus you never know what the future holds. In the future you may want a spaceship but the only spaceship company uses credit scores. Then you're effed. No space for you.

[Eagle]

I actually just got my first credit card recently. Because of my student loans, my credit score was 709 (I think) when I applied. Five months later, my score is a 746. All I've done is pay in full each month. I'd say this is pretty good progress. I've read you only need like a 780 to qualify for the lowest mortgage rates.

Have you had any big wins towards improving your credit score? What did you do?

Does my score improvement sound normal? Should it keep increasing like this or will it slow down eventually?

@RonB
A credit score is only one part of the equation if you are wanting to use it to buy a house. But here's an explanation of credit scores.

35% of your score is determined by your credit history. Do you make payments on time or late?

30% of your score is determined by the amount you owe. Student loans, credit card balances, etc. all factor in here. Your utilization is often used as a measurement here. In other words, if you have a $10,000 limit and have a balance of $9,000 that's very high utilization of your credit.

15% of your score is determined by the length credit accounts. Older accounts typically have a positive impact versus accounts that have been open for a short time.

10% of your score is based on how much new credit you have applied, been approved for, or been denied. Also, applying for multiple accounts in the same industry within a short time can have a negative effect.

10% of your score is based on the types of credit in use. This could be a mix of credit cards, retail accounts, installment loans, finance company accounts, and mortgage loans.

The higher the credit score simply means you are borrowing money and paying it either on time or early. Typically, most people do this while paying interest.

Does this help?

[Eagle]

@RonB
As to buying a house... You should ideally have all student loans paid off, $0 balance on any credit cards, and paid off vehicles. You should also have 20% to put down as a down payment towards the house to avoid private mortgage insurance (PMI). The monthly payment should be no more than 25-35% of your monthly net income. You should have 6 to 12 months of expenses saved up in a rainy day fund (emergency fund). You should try to get a 15 or 20 year mortgage so you pay less interest. And finally you should buy a house no more than 2-3 times your annual salary.

Having a house is like having a family. There's always unexpected expenses and things cost more than you think they will. Particularly in the first year or two of home ownership.

When are you thinking about buying a house?

[Weird Tolkienish Figure]

I actually just got my first credit card recently. Because of my student loans, my credit score was 709 (I think) when I applied. Five months later, my score is a 746. All I've done is pay in full each month. I'd say this is pretty good progress. I've read you only need like a 780 to qualify for the lowest mortgage rates.

Have you had any big wins towards improving your credit score? What did you do?

Does my score improvement sound normal? Should it keep increasing like this or will it slow down eventually?

Score was going up for a while, now it's taking hits because the average age of my accounts is going down... ah well.

[disneysteve]

Score was going up for a while, now it's taking hits because the average age of my accounts is going down... ah well.

Why is the age of your accounts going down? Have you closed older accounts?

[LivingAlmostLarge]

Personal relationships with services? If you never move and people don't age. My mom's lived in the same small town. Yes personal service in town cost more but the people she once used are getting older and not doing it anymore. So now she's all about $$$ since she doesn't know these new people and now it's about the bottom line. It happens. And when she moves, since they sort of have, she knows no one and now it doesn't matter about the bank, handyman, owner run store.

No idea what our credit score is. We are probably going to be buying in a year or two. And honestly since we are renting our credit score probably mattered. It certainly helped when since we are renting a house with a dog and they ad said no dogs. I could care less what it is, but I do care enough to have it been good enough to get a rental, mortgage, etc.

[Weird Tolkienish Figure]

Why is the age of your accounts going down? Have you closed older accounts?

Well, I wasn't a big card user, until about a year ago. Credit scores were a mystery to me, didn't know about Credit Karma, so I just avoided credit cards altogether. THen I started following my credit scores, and it was going up for quite some time, due to me opening account and keeping my utilization percent very low. However, this lowered the average age of my account, so I'm going to cool it for a bit.

Also got dinged for too many hard inquiries lately.

It's only fluctuated a few points up or down, really.

[LizfromtheBronx]

I've posted about this a few times, but I am in a re-building phase. Credit score has gone up about 50 points in the last few months, due to adding new credit cards accounts. It helps utilization, which is one of my main two problems (spotty payment history is the other, nothing to do for that one except wait it out, should be dropping off soon).

While buying a home is a looooong way off (if ever, not sure I have the desire to own), and I have a car so shouldn't need to worry about that for at least 5-6 years, I still care about my credit score. I'm planning on moving, so need to qualify for a rental apartment. If I change jobs, it could matter. It could cause my car insurance to drop. Oh, and there's always the peace of mind in knowing that I have good enough credit to qualify for something should it be needed.

[tripods68]

I'm at a point in my life where I don't care what my credit score is any more. I haven't applied for a loan in over 20 years.

That's awesome!
We have not use credit card at all ever since we paid off our car last January. And don't intend to use credit card for anything else.

[Atretes1]

My credit score is over 800 but dropped 20'ish points after not having a home mortgage and or a consumer loan. I do use a points card for normal purchases that is paid off monthly.

I believe they are suppose to give you up to 3 reason why it is low. The only one they can come up on mine is not having a diverse credit mix LOL.

[feh]

That's awesome!
We have not use credit card at all ever since we paid off our car last January. And don't intend to use credit card for anything else.

Oh, we use our credit card for every purchase we can. As long as it's paid in full every month (and it is), there is no interest charge.

[Eagle]

My credit score is over 800 but dropped 20'ish points after not having a home mortgage and or a consumer loan. I do use a points card for normal purchases that is paid off monthly.

I believe they are suppose to give you up to 3 reason why it is low. The only one they can come up on mine is not having a diverse credit mix LOL.

@Atretes1
Normal purchases like eating out and grocery shopping?

If those are normal purchases that include groceries it seems that there's studies out that show people who use plastic spend more (some would say 12 to 18% more!) on groceries.

According to McDonald's executives, MacDoald's franchises saw an increase by 40% on the average ticket size for those franchises implementing credit card processing for the first time. Average purchase jumped from $4.50 to $7.00!

See Research Reveals Credit Cards Encourage Spending

[Atretes1]

@Atretes1
Normal purchases like eating out and grocery shopping?

If those are normal purchases that include groceries it seems that there's studies out that show people who use plastic spend more (some would say 12 to 18% more!) on groceries.

According to McDonald's executives, MacDoald's franchises saw an increase by 40% on the average ticket size for those franchises implementing credit card processing for the first time. Average purchase jumped from $4.50 to $7.00!

See [/2008/09/23/research-reveals-credit-cards-encourage-spending/"]Research Reveals Credit Cards Encourage Spending[/URL]

Dave Ramsey flash back....I use it for bills and everyday purchases all within my budget.

[disneysteve]

MacDoald's franchises saw an increase by 40% on the average ticket size for those franchises implementing credit card processing for the first time. Average purchase jumped from $4.50 to $7.00!

I never really understood this. What I want to eat isn't determined by how I intend to pay. If I want a burger, small fries, and some water, that's all I want. It doesn't matter if I have $5 in my wallet or $50 or a stack of credit cards. That won't make me want a salad, Big Mac, large fries, and an ice cream cone instead.

I guess the issue arises with folks who don't have much cash on hand so although they might want more food, they don't have the money to buy it - unless they use their credit card. Admittedly, I have no point of reference to understand or appreciate living that way as I've never done it. I always have plenty of cash in my wallet, as well as my credit cards. How I pay is totally unrelated to what I buy in any given transaction.

[snafu]

Eagle, thanks for the stats. I've been using a 'cash back' CC for groceries since it's introduction. In spite of the combination of a meal plan and grocery list, the monthly total increased more than 8% in 2015. I've told myself it's due to price increases which have been whopping the past two years but I'm looking for ways to cut back.

I've stayed within budget by increasing the annual sum, huge reduction of red meat, doubling of less expensive root vegetables, and too much rice, pasta, legumes and wraps. I'm committed for September for holiday baking but plan to revert to cash October and November to see if it can make a difference.