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DW and I have always, so far as I know, had scores in the 800s. Until recently. A year and a half ago we sold our mountain retirement home and, in so doing, paid off the small mortgage. Instead of heading for our AZ digs as we typically did in the winter, by request we moved to our daughter's unoccupied ranch in SoCal in order to prepare it for marketing.
This has taken a while and in that time we paid off a car loan, and a couple months ago we sold a rental property, paying off that mortgage. Daughter's business pays the ranch's bills. We use one credit card but pay it off each month.
Early this month we purchased a home for cash, but applied for a HELOC so I'll not have to use my own money for some renovations. So far the bank has approved our credit and things seem fine so far as completing the approval process.
So here's the thing. There were four pieces of mail in the mailbox today, all from the bank. The usual stuff. But one caught my eye. Here's your credit score from Equifax: 672! My credit rating is better than 37% of my fellow Americans. I've got my bottle of T-Bird and am headed for the Bowery! No word on DW's score. Maybe she won't have to join me on the mean streets of NYC.
I'm more than a tad p^*(&^d. These reporting agencies make a ton of money on us, yet dealing with them is worse than Microsoft nagging you to update their OS and use their browser rather than the one you like. Then they allow all your data to be hacked just to put some frosting on the poop.
So if one doesn't spend money one doesn't have and lives off the financial grid for a couple months, they throw you off the cliff and run over you with the bus?
I'll get my information from them, but don't expect to see fraud as both of our accounts have been locked for years, having only opened them for a few days so the bank could check our scores. Since we qualified I'm guessing someone looked at our history and may understand the drastic change.
Will someone who knows this business please 'splain?
DW and I have always, so far as I know, had scores in the 800s. Until recently. A year and a half ago we sold our mountain retirement home and, in so doing, paid off the small mortgage. Instead of heading for our AZ digs as we typically did in the winter, by request we moved to our daughter's unoccupied ranch in SoCal in order to prepare it for marketing.
This has taken a while and in that time we paid off a car loan, and a couple months ago we sold a rental property, paying off that mortgage. Daughter's business pays the ranch's bills. We use one credit card but pay it off each month.
Early this month we purchased a home for cash, but applied for a HELOC so I'll not have to use my own money for some renovations. So far the bank has approved our credit and things seem fine so far as completing the approval process.
So here's the thing. There were four pieces of mail in the mailbox today, all from the bank. The usual stuff. But one caught my eye. Here's your credit score from Equifax: 672! My credit rating is better than 37% of my fellow Americans. I've got my bottle of T-Bird and am headed for the Bowery! No word on DW's score. Maybe she won't have to join me on the mean streets of NYC.
I'm more than a tad p^*(&^d. These reporting agencies make a ton of money on us, yet dealing with them is worse than Microsoft nagging you to update their OS and use their browser rather than the one you like. Then they allow all your data to be hacked just to put some frosting on the poop.
So if one doesn't spend money one doesn't have and lives off the financial grid for a couple months, they throw you off the cliff and run over you with the bus?
I'll get my information from them, but don't expect to see fraud as both of our accounts have been locked for years, having only opened them for a few days so the bank could check our scores. Since we qualified I'm guessing someone looked at our history and may understand the drastic change.
Will someone who knows this business please 'splain?
I have the same complaint. Forced consumerism... You must spend and use credit in order to have a credit rating. I just opened a line of credit - to rebuild my 800+ score from years ago - just so that my car insurance company doesn't raise my rates on my cars. It's maddening and trying to get a politician to acknowledge that this is bad policy is just as futile.
You should be checking your credit from all three bureaus EVERY YEAR. www.annualcreditreport.com You don't get the scores for free every year, but you can see what is showing as positive and negative and infer why your score is lower than you expected.
If I were a betting man, I would bet that the credit bureaus would see you liquidating assets and not replacing it with other debts which could mean some other potentially negative issue. There's a difference between paying down a mortgage to zero in installments and a lump sum payment. Either that, or there's a mistake on your report that is bringing your score down. I've got a common name and it seems like every 4-5 years I have to fight with a collection agency to get them to remove debt that isn't mine.
The other potential issue is that credit card. If you have few other debts now, and only one credit card, even if you pay that card off every month, if you have (for argument's sake) a $2k limit on the card and you spend $1,500 every month, even if you pay the card off in full, your credit report is going to look like that is a revolving balance. The bureaus have no idea whether you pay a card in full or not - they just report what is handed to them, which is your end of statement balance of the end of that particular month.
The biggest misconception about your credit score is that you can have very little credit and keep a low 800's score.
Best way to get a high score is to have a lot of credit availability and very low usage. Get another credit card or two and learn about travel points like the Chase Ultimate Rewards points. You and your wife could gain the benefit of a better credit score AND travel on the cheap by just using your credit cards for all of your day to day expenses and paying them off each month like you've been doing.
Credit is a funny thing - I don't own a home because my wife and I bounce around a lot, but together we have a HH income around $170k but have credit limits on 17 different credit cards that total a combined $255k. Can you imagine someone with enough unsecured credit to purchase a pretty nice house? It's insane by lay standards, but not to FICO.
To illustrate my point - take my own personal example. My credit score a few months ago was around 809. I bought a car for my wife with my USAA cash back Visa that earns 2.5%, the car was about $14,000. This is the only revolving balance we have, but I transferred the balance over to my Navy Federal Visa card which was offering 0% APR with $0 fees for 12 months. That Navy Federal card has a $15,000 limit, so my utilization on that one card is SUPER high. Even though my rate is 0% and I could have bought the car with cash, the stock market has been doing so well since last September that there was absolutely no reason to do so when I was making 7-8% returns on that $14,000 of liquidity.
However, despite the fact that my total utilization is $14,300-ish out of $200,000 personal available credit (a measly 7% utilization rate overall), because my utilization rate on that one card is 95% my score dropped from 809 to 779. 30 points because I'm taking advantage of a sensible offer. Seems silly, but that's FICO. She's a fickle beast.
I have the same complaint. Forced consumerism... You must spend and use credit in order to have a credit rating. I just opened a line of credit - to rebuild my 800+ score from years ago - just so that my car insurance company doesn't raise my rates on my cars. It's maddening and trying to get a politician to acknowledge that this is bad policy is just as futile.
Not sure how it's bad policy - but you're never going to win that argument because the bank lobby is too rich and powerful anyhow. How tough is it to just get a credit card, use it a few times a year and then let it sit in the sock drawer the rest of the time? You're not forced into buying anything you wouldn't buy otherwise with cash and you help the economy more using credit than with cash (IMO). You don't have to really use the credit as I've demonstrated above - but you do need to show a good credit utilization rate (below 10% ideally).
In March 2014 we paid cash for my OH s brand new car. No help there.
In Nov 2015, we bought a house with 10% down, my credit score was 748, my OH s slightly higher
We borrowed to update/upgrade it.
We have rapidly paid down the house while leaving the debt alone.
We now own half the house, rapidly paying it down.
The debt ceiling is always what we owe, as it decreases with each payment.
So now my credit score is low 6's.
I have a couple small limit cards, even though paid for, always have a high utilization rate also simply because they are used. I asked for the lowered limits to not ever get onto trouble with having the house mortgage, not making it tempting to charge them up, and eliminated a few more I had with higher interest higher limits to avoid tempting trouble.
I've given up trying to maintain . A " perfect credit score".
Both our vehicles are paid for, owe no more than $1000 A month on c.c cards, and own 2 paid for vehicles, and the debt to upgrade will be retired in <3 years, and own half at least of the house.
I'm not worried. Biggest debt is the house, second the big debt as I call it for upgrading the house.
I don't need more for 3 or 4 years, and then only if I finance my replacement vehicle will it matter, by then the offending " big debt" for upgrading the house will be paid off, so not credit utilization then. I may also have a low score, cause then I'll only have the mortgsge, small line of credit cards, And nothing else. May even own the house outright by then too, if we can get the other 50% paid off.
It's a shame we get screwed over a stupid number.
I'd better take out a new line of credit with a higher limit before I buy a newer car if I want to finance it!!
Hi! I'm galaxyhi, and I'm a deadbeat!
Hi galaxyhi, welcome!
We are retired with no jobs to speak of ,we carry zero debt , don't own a home and both of us are in the 800's for years . We use our credit cards heavily but never ever carry a balance .
did you sign up for credit karma and see the factors making up your credit score? that seems like a big hit and im not sure why that would be the case here.
I have the same complaint. Forced consumerism... You must spend and use credit in order to have a credit rating. I just opened a line of credit - to rebuild my 800+ score from years ago - just so that my car insurance company doesn't raise my rates on my cars. It's maddening and trying to get a politician to acknowledge that this is bad policy is just as futile.
That's not necessary. Insurance companies check your credit for specific issues, mainly late payments. They don't care what your score is. A guy whose score is 450 just because he hasn't used credit in a few years is going to be judged a better risk than a guy with a 700 who has a couple of late payments in his recent history.
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