The Score

if you dont semi regularly monitor your credit you should start.

When i was 20 and signed up for the Navy they did a credit/background check. Came back that I had a warrant out for my arrest in Michigan. I had never been to michigan in my entire life.

I’ve had my account compromised twice before and lost several thousand dollars. Now I’m on top of that shit but it definitely did effect my credit even though those things weren’t me.

[quote]gregron wrote:
if you dont semi regularly monitor your credit you should start.

When i was 20 and signed up for the Navy they did a credit/background check. Came back that I had a warrant out for my arrest in Michigan. I had never been to michigan in my entire life.

I’ve had my account compromised twice before and lost several thousand dollars. Now I’m on top of that shit but it definitely did effect my credit even though those things weren’t me.[/quote]

I can do better than that.

I had Bally’s Preident’s and First Ladies on my credit report which kept me from being able to get an apartment when I first got to Florida in the military.

It turns out, that in high school I had signed up for one of their deal where you train for free for two weeks and then you can buy a membership. I went the two weeks and never went back. I was also underaged. The sales guy had signed me up anyway to a multi-year contract so he could make his quota.

This stayed on my record for years until someone else sued and then they compensated me and erased it…but had I not been stopped from getting an apartment, I would have never known…and they were trying to sue me at first for the money I NEVER OWED.

Had someone else not sued them at about the same time, I would have been stuck in another city with no place to stay.

I’m having a little trouble following this…

Is the lesson:
-Don’t sign up for a credit card until you’re ready
-Don’t use the credit card to buy shit you don’t have the money for
-Don’t miss payments

Am I getting the lesson?

[quote]Professor X wrote:

[quote]gregron wrote:
if you dont semi regularly monitor your credit you should start.

When i was 20 and signed up for the Navy they did a credit/background check. Came back that I had a warrant out for my arrest in Michigan. I had never been to michigan in my entire life.

I’ve had my account compromised twice before and lost several thousand dollars. Now I’m on top of that shit but it definitely did effect my credit even though those things weren’t me.[/quote]

I can do better than that.

I had Bally’s Preident’s and First Ladies on my credit report which kept me from being able to get an apartment when I first got to Florida in the military.

It turns out, that in high school I had signed up for one of their deal where you train for free for two weeks and then you can buy a membership. I went the two weeks and never went back. I was also underaged. The sales guy had signed me up anyway to a multi-year contract so he could make his quota.

This stayed on my record for years until someone else sued and then they compensated me and erased it…but had I not been stopped from getting an apartment, I would have never known…and they were trying to sue me at first for the money I NEVER OWED.

Had someone else not sued them at about the same time, I would have been stuck in another city with no place to stay.[/quote]

damn! that sucks lol.

Companies are so tricky like that… and by tricky i mean deceitful. Those bastards.

[quote]therajraj wrote:
At my school there was a basic finance course called Personal finance that only non-business majors are allowed to take. I would recommend everyone take this course or an introductory economics course if one at your school doesn’t exist.

[/quote]

Good advice to get educated. However, I would note that personal finance and economics are often used interchangeably - but they shouldn’t be. Basic econ will teach you nothing about personal finance. While drinking a few beers with a few members of the local school board, I suggested that the HS in my town offer a basic finance class to teach kids what they need to know about banking, credit cards and finances in general. Sadly, they looked at me like I was suggesting they be taught to cook meth.

[quote]A Ninny Mouse wrote:
I’m having a little trouble following this…

Is the lesson:
-Don’t sign up for a credit card until you’re ready
-Don’t use the credit card to buy shit you don’t have the money for
-Don’t miss payments

Am I getting the lesson?[/quote]

I think the lesson is your credit score is really funking important. Make sure you educate yourself on everything that can affect your score and watch how you handle your finances or you’re going to screw yourself…

[quote]A Ninny Mouse wrote:
I’m having a little trouble following this…

Is the lesson:
-Don’t sign up for a credit card until you’re ready
-Don’t use the credit card to buy shit you don’t have the money for
-Don’t miss payments

Am I getting the lesson?[/quote]

Add “Do not put anything on your card that you cannot pay for when the bill comes due”. Paying credit card interest is plain stupid and debt is truly slavery. Many will argue to the contrary. However, it is my experience/belief that when you owe someone money, they own a piece of you. There is a certain freedom to living within your means and being debt free. I never believed it until I finally stopped owing people money.

[quote]A Ninny Mouse wrote:
I’m having a little trouble following this…

Is the lesson:
-Don’t sign up for a credit card until you’re ready
-Don’t use the credit card to buy shit you don’t have the money for
-Don’t miss payments

Am I getting the lesson?[/quote]

Get a credit card but use it wisely.

If you’re going to charge something to it, be damn sure you are able to pay the bill off completely when it’s due (not just the minimum payment).

Along with avoiding activities that tarnish your credit history, it’s also important to engage in activities that BUILD your credit. One of which is owning a credit card.

[quote]VanderLaan wrote:

[quote]therajraj wrote:
At my school there was a basic finance course called Personal finance that only non-business majors are allowed to take. I would recommend everyone take this course or an introductory economics course if one at your school doesn’t exist.

[/quote]

Good advice to get educated. However, I would note that personal finance and economics are often used interchangeably - but they shouldn’t be. Basic econ will teach you nothing about personal finance. While drinking a few beers with a few members of the local school board, I suggested that the HS in my town offer a basic finance class to teach kids what they need to know about banking, credit cards and finances in general. Sadly, they looked at me like I was suggesting they be taught to cook meth. [/quote]

Yeah, a finance course is best. But a basic understanding of economics will still benefit the average person IMO.

I guess I’m lucky in that my parents have never relied on credit, and told me not to either.

My dad always bought his cars for cash, and my mom even went as far as spending half her pension to pay off the mortgage on their house when she ‘retired’.

It’s just been a logical progression from there, don’t spend money you don’t have unless you really have a good reason. I have a credit card, but it’s setup to repay any outstanding amounts every month via direct debit.

I don’t think the credit rating is as important in the UK as it is in the US, but I’ve done my best to build mine up and as far as I’m aware it’s 95-100% right now.

As a teen in the early 80’s living in the SF Bay Area there were businesses on radio and tv advertising that you could get credit. They didn’t even advertise their product at all, just that you could get credit. Kind of surreal.

In case my imbedding is a failure 1981 Furniture USA commercial - YouTube

[quote]RSGZ wrote:

I don’t think the credit rating is as important in the UK as it is in the US, but I’ve done my best to build mine up and as far as I’m aware it’s 95-100% right now.[/quote]

In the US, even certain employers will check credit scores before they hire you. You’ll have trouble buying a house and finding a place to rent is a truely hassle. I can’t tell you how many apartments I got passed up on because of my terrible score and I’ve never been late on rent in my life. That being said, when I rent my house out in a couple years I won’t be renting to anyone with bad credit either.

I am a Loan Officer and have to deny people for mortgages all the time due to bad credit. For the MOST part, bad credit is a result of people being careless, shortsighted or downright stupid.

I just denied a loan because this idiot forgot to make a $12 Target payment - went from a 645 down to 595 in one month for ONE 30 day late. OOOOOOPS! Sorry, you can’t get a HOUSE now!

Here are a few things that I’VE OBSERVED that the people with the BEST credit scores (above 780) have in common:

They have long standing tradelines of 60+ months. They don’t hop from account to account chasing a “better introductory APR”. They open quality accounts and they keep them open for years.

They pay above the minimum balance every month. Usually they pay their cards off every month, but if it’s a substantial purchase, they pay it off in less than six months.

They don’t have “bullshit” cards (Target, Macy’s, gas cards, Victoria Secrets, etc… pretty much anything will a low limit and a high interest rate).

They have well established cards: American Express, Visa, Mastercard, (I don’t see many Discover cards with these folks for some reason). These cards usually have credit limits between Ten and Thirty thousand dollars. The balances they carry (if at all) are less than 30% of the high credit limit.

They have 15 year mortgages.

They choose 3 or 4 year car loans (assuming they don’t pay for their cars with cash).

They don’t have any late payments (or if they do, it’s like one thirty day late from ten years ago or something)

They don’t have any bankruptcies, collections or judgments.

They don’t have any accounts closed due to dispute.

They TEND to be married and have stable, professional jobs.

That’s what I’VE observed.

Well, what do you do if you’ve already fucked up your credit? First of all, analyze your position. If you are trying to buy a house or a car, it’s NOT the time to start fucking with things EXCEPT under the direction of your lender. If you have a decent score, leave it alone. Here’s why: it would SEEM like the “right” thing to do when applying for credit is to do whatever you can to “fix” what you PERCEIVE to be a problem, right? WRONG. If you have a few collections that are old - even if they are small, stupid medical collections, LEAVE THEM ALONE. With COLLECTIONS, the algorithms pick up the DATE OF LAST ACTIVITY and count it against you! It’s retarded, but I see people tank their scores all the time by trying to pay shit off.

Another thing if you are trying to buy a house: DON’T go out and buy a car! Or furniture, or do ANYTHING that could alter your score until AFTER settlement on the house. I’ve seen plenty of people fuck themselves because they thought it was in the bag. Technically, ANY change to the credit profile will send the loan back to underwriting and could affect your approval. If the DTI (debt to income ratio) passes a certain threshold, the loan is dead.

A quick and easy way to add points to your score is to become an authorized used on someone ELSE’S credit card. (make sure the credit card has a low balance and a good payment history though!). If you add two or three established tradelines to your credit history, you can bump your score up by 50 or 60 points in less than a month.

You can also ask your loan officer to have your “non-traditional” tradelines added to your credit report (again, assuming that you’ve paid them ON TIME) These would include rental payments, utilities, cell phone payments, cable, etc… They CAN be scored and help put something positive on your credit report.

Another trick is to go on to the repository websites (equifax, experion, and transunion) and create an account and just log in and DISPUTE EVERYTHING on your report that’s negative. It’s free for two of them and I think either eqifax or experion charges something like $9.95 each time you do it. Do it once a month or so. Shit will start to drop off.

If your credit is MAJORLY fucked up and you are trying to clean it up, it’s true that you can pay your shit off for pennies on the dollar. The company doesn’t care, they’ve already written it off anyway so it’s actually a PROFIT for the current fiscal year for them so THAT’s your bargaining chip! These people are sharks and will act like they are doing you a favor - FUCK THEM, you are doing THEM a favor. So when you negotiate the payoff, NEGOTIATE THE REPORTING RIGHTS! That’s right, you can actually NEGOTIATE THAT SHIT RIGHT OFF YOUR REPORT! (assuming YOU don’t report yourself! LOL). Offer an extra few cents on the dollar for the reporting rights - they’ll jump right on it. They don’t care about your score, they care about THEIR MONEY!

In the gray area of credit repair EVERYTHING IS NEGOTIABLE. Remember that.

To reiterate what Prof X said, Take care of your credit. In this day and age it is being considered by potential employers, even potential SPOUSES! It is really becoming a measure of how responsible you are. My advice is to NOT use credit unless you absolutely have to. Establish it early by becoming an authorized user on one of your parents cards (you don’t even have to have a physical card given to you or even know the account number…) Stay away from getting too many smaller bullshit cards because those minimum payments add up and if you forget to pay one, you’ve just fucked yourself. If you are having trouble establishing credit, go to your bank and start a “secure credit account”. Basically, you put a few hundred bucks into an account and leave it there and THAT’S your “credit”. After a few months of a good payment history (i.e. paying it off every month), the bank SHOULD issue you a real credit card. This is a FAR better alternative than a department store card! It is at your bank, there is a human to talk to, etc… there are many advantages to this.

Another tip is to cultivate a good relationship with your banker! Seriously. It will pay dividends over the years.

Alright, that’s all I got for now. If I can think of anything else I’ll throw it out there. Great thread idea, Prof X!

I have one credit card that I got in college. The interest rate is atrocious, but the bastards had given me an 18K limit by the time I graduated law school. I don’t use it for much, but keep it around because of that credit limit, and I don’t see the reason to get a new card with a decent interest rate right now.

AC, I thought I remembered reading that to decrease fraud, they were no longer letting people grow their credit by being authorized users?

As for the person who got garnished - there’s a reason we do it so it hits right after pay day. :slight_smile:

[quote]pushmepullme wrote:

AC, I thought I remembered reading that to decrease fraud, they were no longer letting people grow their credit by being authorized users?
:)[/quote]

I use the tactic to improve peoples scores all the time. I did it a week ago…

im young, 21, and i have a credit card. But i think im very smart with it. I got it when I was 18 because my mom had always taught me about credit and always said i should have good credit. I basically only use it for gas or emergencies. Its usually paid off every month in full unless there are certain exceptions, such as my dog needed to have “emergency” surgery, yeah i had no choice. Its a pretty small amount of credit but I have a great rate especially given my age.

They have offered to up the limit a few times when i have contacted them for this or that, but i always request a lower rate, both times it went down 1%. I dont need an extraordinary limit. I also bought a motorcycle, some say it was stupid, but in the scheme of things its a smaller purchase and, possibly stretching this one, will look great on my credit, seeing as ive never missed a payment and am curently about 6 months ahead on payments. bike was not purchased with credit score.

I never had credit of any type until I started investigating buying a house.

Finance guy told me “You don’t have any history. None. Therefore, you will not get a loan from anybody.”

His advice to get a secured credit card through my bank worked very well. A year and a half later, here I sit in my house (moved in about april last year).

People do stupid crazy shit with credit and debt. I know way too many people who have lived far beyond their means that are making 6 figures (yeah, it’s in the low 6, but above 100K none the less) and living month to month.

Best tip I have- Get a secured credit card. Creates history, boosts score, and it’s backed by cash.

If you don’t have the cash for a secured card, you aren’t going to have cash for the payment anyways.

[quote]DJHT wrote:
Good luck X on convincing the 20 year olds to delay gratification and NOT fall into this trap. Might as well try to convince them to stay celebate until marriage. [/quote]

Some of us aren’t retarts…

I’ve had a 2k limit since I was 18 (I have a couple cards with MUCH higher limits now, lol) and have paid less than $200 in finance charges in the last 12 years.

Outside of a medical bill that never was forwarded to my new address, my score is fucking gold. My wife, is in the low 800’s, lol.

As for the medical bills: wear a condom gents, last thing you want to do is hear a horror story the night after a rando hookup, about some dude in the navy with cream cheese drip, freak out and run to the ER to get the swab to find out your perfectly clean… Without insurance. Needless to say I hit that again and again for like 2 months. Looks of a 6 (drunk) willingness of a 3, and apparently clean, who would have figured. Thank god for cheap tequila because that was a fun couple weeks…

Wait, what is this thread about? College right?

[quote]angry chicken wrote:

[quote]pushmepullme wrote:

AC, I thought I remembered reading that to decrease fraud, they were no longer letting people grow their credit by being authorized users?
:)[/quote]

I use the tactic to improve peoples scores all the time. I did it a week ago…

[/quote]

I was an authorized user on someone else’s credit card for years and was told I was building credit. When I went to rent an apartment last year, they did a credit check and was told I wasn’t even in the system. Not bad credit, just no credit history at all. Same with cell phone plan or even a regular credit card application.

End result? I have a 2 month deposit down on the apartment and I’m on someone else’s phone plan. Bank of America secured credit card for $500 that I have to make debit payment on constantly. Bought a second car in cash. High deposits down on utilities. I’m just glad I had that kind of money just lying around.

[quote]postholedigger wrote:

[quote]angry chicken wrote:

[quote]pushmepullme wrote:

AC, I thought I remembered reading that to decrease fraud, they were no longer letting people grow their credit by being authorized users?
:)[/quote]

I use the tactic to improve peoples scores all the time. I did it a week ago…

[/quote]

I was an authorized user on someone else’s credit card for years and was told I was building credit. When I went to rent an apartment last year, they did a credit check and was told I wasn’t even in the system. Not bad credit, just no credit history at all. Same with cell phone plan or even a regular credit card application.

End result? I have a 2 month deposit down on the apartment and I’m on someone else’s phone plan. Bank of America secured credit card for $500 that I have to make debit payment on constantly. Bought a second car in cash. High deposits down on utilities. I’m just glad I had that kind of money just lying around.[/quote]

Did you have the bank send you a letter stating that you were added to the trade line? After that did you take that letter and submit it through a reporting agency such as Kroll or CreditPlus (and pay $30 per tradeline) to each repository to have the tradeline added to your report? Depending upon the card/bank they may not add the tradeline of an authorized user automatically. If you have a friend in the mortgage business they can do it for you.

It works. If it didn’t, I would not close half of the loans I do. Fixing credit is more art than science. Different banks have different policies and each repository has a slightly different algorithm (that’s why you have three different scores for the same information). It’s taken my six years to really learn it and a few lines on a thread isn’t enough to communicate all of the detail necessary sometimes.

EDIT: Also, who knows what agency the apartment used to check your credit? If they only pulled one repository (Transunion for instance) and used a cheap reporting system, then it’s very possible it wouldn’t show. They charge your $45 for an application fee, but the credit report they pull really only costs them about $3. The credit report I pull (through a legitimate agency) costs me $22. You get what you pay for.