Why low credit score; live simple, debt free (rent, income, balance)

[kelly237]

I agree FM and Karla
We have excellent credit and never leave any amout on credit cards.

[batmanismad]

My score is lousy and could care less, one credit card with a zero balance hardly use it, no mortgage all on cash basis.

Remember cash is KING, debt is horrendous. The banks and credit bureaus can all go to hell as far as I am concerned.

[tijlover]

I never check my credit score, haven't a clue what it is.

But I did get a scare talking to an old friend, last week, who is renting an apartment, and the owners are not going to let him renew his lease (he's been there for 20 years!) because his credit score is so low. Last year, someone he knew in the office, waived that for him.

Is this a fictitious story or what? Say yes!

[freemkt]

Dave Ramsey says your credit score is really an "I like debt" score. Your credit score would be higher if you financed your car and made all the payments on time. Instead, you paid cash and ended up with a lower credit score - obviously you don't like debt enough for the credit industry to make a lot of money off you, which is what a credit score is best at measuring.

[texdav]

XCredit score has more to do with your total history of debt and paying it off .But now days that isn't the only factor in getting new credit. Now they look closely at your total debt to income. This isn't pre 2008.Basically the credit protection laws just passed are assure you keep within your abilty ot pay off any loan before it happens.Kind of a protect your from yourself and there for not allowing more defaults which hurts everyone overall.

[Ninetails]

Your credit score is tied to your financial well being. What most
don't seem to know because of the misinformation out there is that your
score is affected by the following

How much you make a year in salary. If your unemployed it hurts
your score because they consider you a financial risk.

Whether you use credit cards or not. No credit card accounts open = lesser
score.

and finally your overall debt to income ratio(most important). If you
spend more than you bring in in money your score is gauranteed
to fall.

[Grandpa Pipes]

Originally Posted by eofelis

I'd never checked my credit score before, or even cared. But I just now took a look online. My score was 600-700. I was wondering why it is so low.

I've been completely debt free for 15 years or so, and paid the few bills I've had on time. Paid cash for my car (<$5K). I have 2 CCs, one I use occasionally (DC), one I use regularly (Visa), both PIF each month. They don't like deadbeats?

I've been in college f/t (non-trad, grants and scholarships) with no debt from that, but my income has been very low for the past few years (<10K/yr) since I've only worked p/t.

I need to learn more about all this.

You my friend are what's known as a "deadbeat" since the banks & Credit Card companies don't make any money from you since you don't borrow.

Watch out if you do have to borrow because you will be "punished" with a higher interest rate to make up for all that interest you didn't pay in the past.

This is why I think that FICO is the biggest ripoff since the indians sold Manhattan Island for $24 and some shiny beads.

[Debtprophet]

When you borrow and make payments online, it improves your credit report. It also shows that you're responsible towards your financial obligations. Your credit history also gets better.

[dazzleman]

The FICO thing is a sham. The whole mentality behind it is for people to be in debt perpetually. That's the way the banks like it. Keeping people on the debt treadmill in order to have a 'good' FICO score is playing the game by their rules. And based upon the way loans written primarily based on FICO scores have turned out, it's not a great measure of your true ability to handle debt. A good FICO score generally means nothing more than you're keeping your head above water -- at this time. It's not really a good measure of your future ability to take on more debt and repay it, in the absence of a more thorough income analysis.

[sirron]

The whole credit score thing was a cleverly devised way to track your BEHAVIOR. If they cannot track what and where you spend, they punish you by giving you a low score, regardless if you are responsible with money. If they can't follow your habits, they automatically assume you are a financial deadbeat! You must remain in debt to somebody, somewhere, all the time.

Ask folks who have paid their credit cards in full for years; many of them have been canceled by the CC companies - because they are responsible, the banks make no money from them. I personally know of people who pay cash for most everything, have no debt, and they pay MORE for insurance premiums and interest rates when they do borrow. By the way, your auto insurance has little to do with how safe a driver you may be.