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Posted: 10/12/2021 9:56:27 PM EDT
[#1]
I own a bunch of shit…….no debt. My credit score is mediocre.
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Posted: 10/12/2021 10:23:58 PM EDT
[#2]
Damn Nigla!!!!
Fico scores love the big installment loans and mortgage debt |
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Posted: 10/12/2021 10:30:39 PM EDT
[#3]
Quote HistoryQuoted: Well if it’s a low interest rate mortgage, it IS a bad financial decision  Finance 101 should be a mandatory class in all elementary schools. |
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Posted: 10/12/2021 10:47:30 PM EDT
[#4]
Quote HistoryQuoted: Finance 101 should be a mandatory class in all elementary schools. Quote HistoryQuoted: Quoted: Well if it’s a low interest rate mortgage, it IS a bad financial decision Finance 101 should be a mandatory class in all elementary schools. Even basic math would do, rather than people guiding their financial decisions by feelings. |
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Posted: 10/12/2021 11:56:57 PM EDT
[#5]
Your social score just tanked. Come with us comrade.
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Posted: 10/12/2021 11:59:27 PM EDT
[#6]
Quote HistoryQuoted: Credit score is a score of how profitable you are to creditors. Not even close. |
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Posted: 10/13/2021 12:05:46 AM EDT
[#7]
Quote HistoryQuoted: Not even close. He’s sort of right, it dictates how likely they’ll have to write off your debt and take a loss |
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Posted: 10/13/2021 12:52:02 AM EDT
[#8]
Quote HistoryQuoted: He’s sort of right, it dictates how likely they’ll have to write off your debt and take a loss Credit score uses actuarial tables based upon your information to determine how likely you are to keep a new credit account in good standing. An inverse application of that metric is the likelihood of having to write off a debt and take a loss. Not how much you'll make the lender(s), or how much you've made lenders in the past. Not how much your net worth is. Not how much you have in liquid assets. Not how much you're likely to borrow. |
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Posted: 10/13/2021 12:59:45 AM EDT
[#9]
Quote HistoryQuoted: Who cares about credit scores if you pay cash for everything. It's a good feeling to have the house paid for, isn't it? I few years ago, when I sold cars a older gentlemen came in that paid cash for everything... he was no longer in financial shape for that, and had no credit at all... After that sad encounter, I began to try to get people to at least finance 5k of a purchase and pay it for at least 3 months. You get credit for the whole amount purchased and it's a small amount in interest that may save you thousands, one day... |
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Posted: 10/13/2021 1:02:03 AM EDT
[#10]
Do you care?
Paid for house, no debt...why do you need banks or loans ever again? |
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Posted: 10/13/2021 1:02:38 AM EDT
[#11]
Quote HistoryQuoted: You'll be pleased to know that (responsible) people who pay off their credit card in full every month are referred to by the credit industry as "deadbeats". That is because they generally pay no interest for using the CC company's money. Bullshit. They take 3-10% of every transaction. That's six weeks to six months of interest off the bat. They're not losing money on anyone whether they carry a balance or pay it. |
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Posted: 10/13/2021 1:12:14 AM EDT
[#12]
Quote HistoryQuoted: Mine dropped 14 points this months for no reason. Nothing has changed in my credit since February. 14 points actually matters when you're at the score im at. I'm trying to build it back since my ex-wife wrecked it BTDT.  I got mine back to about 750, but it took me over a decade.My score dropped horrifically when I had my hours cut at work in Saudi and then we all got shitcanned (Thank you, Mr. President), then 100 or so days I was without work waiting on this job and living off my cards in the States. This increased my utilization to over 60%. After getting my first paycheck here in Iraq, I paid off a loan, as the last payment was due. My score dropped some more, enough to be in the POOR range. Immediately, and I mean within a couple of minutes, Discover canceled my account citing low usage (I can't Discover anyplace overseas that takes it) and my "poor" rating. It was my oldest card, so now my score dropped some more (average age of accounts decreased), and the loss of the account decreased my available credit by several thousand dollars, resulting in a utilization of 70%, while having actually paid off a damned loan and having made several multi-thousand payments on my cards. And yes, within a few seconds of getting the bad news from Discover, I got notifications from all 3 credit bureaus changing my classification to POOR. Funny, though, that my EFT payments don't show up on my cards for several days, and the scores don't go up for a month or two, but bad news is acted upon within seconds.
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Posted: 10/13/2021 6:47:15 AM EDT
[#13]
Quote HistoryQuoted: Well if it’s a low interest rate mortgage, it IS a bad financial decision What if OP's job is about to fire him for not getting a couple "shots" and he wants flexibility in a new job search? Killing debt right now is a fantastic idea no matter what the rate is. |
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Posted: 10/13/2021 6:56:23 AM EDT
[#14]
Credit is aimed at the poors and making them debit slaves so that they buy above their means.
Managing your debit and making sound financial decisions by paying debit off early is frowned upon by the big banks. Credit rating companies determine how much excess debit one can be submerged in before going under and they want the plebes at the max. |
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Posted: 10/13/2021 7:16:00 AM EDT
[#15]
It amazes me that people don’t know how to use debt to make money. Debt isn’t good or bad per say. It’s how you use it that determines its nature.
I borrowed millions and millions of dollars to buy a company. I paid it off. I’ll borrow more to buy another company and so on. I’ve borrowed when I see a great real estate play. That makes me money. If I didn’t manage my credit score borrowing large sums of money wouldn’t be possible. The debt I’ve taken on has been used to accumulate wealth. The bank loves me because I put their capital to work and for them and pay it back. Debt is misunderstood by so many, and when I try to explain it to them they just reeeeeeeee at me about how good it feels to have their house paid off. Ok, fine, enjoy no house payment. I’m going to go accumulate more wealth, you can get back to posting about how I did it because I was born with a silver spoon in my mouth or about how the workin’ man can’t get ahead or whatever makes you feel better about why others have so much more. Use debt to build assists, it feels amazing. I would punch myself if I paid my house off. (Retirees aside if you want to stop investing and building and just ride it out). |
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Posted: 10/13/2021 7:22:00 AM EDT
[#16]
Who cares? People had credit scores for decades without monitoring them or even knowing what that was.
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Posted: 10/13/2021 7:29:30 AM EDT
[#17]
There's no way the mortgage rate was as high as the credit cards so they should've gone first. If your rate was in low 3s upper 2s it was a bad move regardless.
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Posted: 10/13/2021 7:31:01 AM EDT
[#18]
Quote HistoryQuoted: Do you have any idea how credit scores work? Apparently not. OP, let me explain. It's really a debt score and that you're paying payments on your debt. Big ass debt like a house drops, no more payment, not uncommon for your credit score to drop. Personally, I could give 3 shits about our credit score. |
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Posted: 10/13/2021 7:32:41 AM EDT
[#19]
Quote HistoryQuoted: Debt is misunderstood by so many When you can invest, do so immediately. But all this car loan, credit card balance stuff is nonsense. Some people say that this sounds like what Dave Ramsey teaches. I was Dave Ramsey before I ever heard of him. You sound like someone who likes to leverage himself into wealth. Maybe it'll work out for you. Maybe it won't. A lot of people went bankrupt leveraging themselves into property in the past. If things go perfectly then yes, leveraging debt works. |
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Posted: 10/13/2021 7:33:40 AM EDT
[#20]
As I have observed before. Your “Credit Score” is, in reality, your CHUMP SCORE. It is not a measure of whether or not you will pay your debts but rather a metric for potential creditors to figure out how much money they can make off you.
Creditors don’t want you to pay off a mortgage or auto loan early. Don’t make the mistake of thinking like this is a personal loan between friends where the sooner you pay somebody back the better guy you are. Consumer credit lenders make their money from you keeping yourself in debt in perpetuity, barely making the minimum payments and hopping from one loan to the next. Think about, if you have been making timely payments on your mortgage and then pay it off early, you have cost the lender potential earnings. Furthermore, your NEXT loan (second-home, boat, auto, whatever) becomes less marketable to an investment buyer because you have proven less profitable to Lenders. |
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Posted: 10/13/2021 7:38:19 AM EDT
[#21]
Quoted: I dont measure myself by credit scores. However I was shocked to see that after i paid my house off, my credit score dropped. Paying off a couple cards is nothing without a house payment. lets say 90 days. WTF FJB Edited title ~ medicmandan |
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Posted: 10/13/2021 7:40:10 AM EDT
[#22]
Quote HistoryQuoted: Credit score is a score of how profitable you are to creditors. So you’re a guy that paid off a mortgage early? That means you’re more likely to pay off loans early, meaning less profit. Credit score goes down. Are you a guy that reliably pays all 96 payments on a 8 year car loan? Yeah, you’re pretty profitable in more ways than one, so credit score goes up. Paid off my house 15yrs early. Car loans have always been paid off early. And all credit cards are paid in full every month... My credit score is over 810. So, no ... it is not a measurement of profitability |
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Posted: 10/13/2021 7:40:21 AM EDT
[#23]
Don't stress too much over credit scores.
I've never had so much as a single late payment in my life but my score is in the lower bounds of "excellent" because of the number of accounts or inquiries. With places offering 1% financing and 2-3% mortgages it makes sense to finance wherever possible. With that being said I did pay off my house because the psychology of owing nothing on it exceeds the financial benefit in keeping the debt and investing elsewhere. |
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Posted: 10/13/2021 7:41:08 AM EDT
[#24]
ITT we discover who has no earthly idea how a FICA score is actually calculated, nor, probably, how figures don't lie, but liars do figure.
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Posted: 10/13/2021 7:42:58 AM EDT
[#25]
Closing a long standing debt or line of credit (credit card) will do that. I cancelled a credit card i never use and dropped almost 20pts because it was my oldest line of credit. Account age is a major factor.
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Posted: 10/13/2021 7:43:11 AM EDT
[#26]
How much land do you have? How old are you?
Mortgage the house to buy land, pay off mortgage, rinse, repeat.  I am not a financial advisor.
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Posted: 10/13/2021 7:44:54 AM EDT
[#27]
The further in debt you go the higher your credit score will be, as long as you are making them payments.
Its a scam! |
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Posted: 10/13/2021 7:45:23 AM EDT
[#28]
Quote HistoryQuoted: No it's not, you are just ignoring risk. Risk has a cost. It's like insurance, it has a cost. I don't owe anything. I may die with $10M in investments or only $1M in investments, or maybe even less (though doubtful). I don't recommend debt above what's absolutely necessary, and that's only a mortgage when you're young. Quote HistoryQuoted: Quoted: Debt is misunderstood by so many I completely agree... We owe zero after we finished off the house last year. We heard the same nonsense when we knocked out 60k of her student loans in about 2yrs, almost 15yrs ago when we got married. I can't tell you how many times we were told to make minimum payments since it is such low interest, and invest anything we'd pay extra. She has friends she went to school with, that are still paying off similar loans 14-15yrs after they graduated. Our approach, we hammer those student loans and knock them out in 2yrs. THEN invest what we were putting into the student loans. It's worked out just fine for us. We have one credit card w/ zero balance. Had it for years. Only reason we have it, is because we've done a little traveling outside of the US and we greatly prefer using a credit card vs debit card for this. She takes it and uses it for groceries once a month because Chase threatened to cancel it once because it wasn't used in almost a year... then we pay it off. Beyond that, it just stays in the gun safe as we don't even bother carrying it around |
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Posted: 10/13/2021 7:46:35 AM EDT
[#29]
Quote HistoryQuoted: if you have been making timely payments on your mortgage and then pay it off early, you have cost the lender potential earnings. Furthermore, your NEXT loan (second-home, boat, auto, whatever) becomes less marketable to an investment buyer because you have proven less profitable to Lenders. |
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Posted: 10/13/2021 7:47:09 AM EDT
[#30]
Quote HistoryQuoted: I REFUSE TO ACCEPT A "CREDIT SCORE" FROM A GOVERNMENT THAT'S $30 TRILLION IN DEBT, NOR FROM THE LENDING INSTITUTIONS THAT PUSH DEBT UPON US. Credit scores have nothing to do with the government. At least not until some idiots demand the government take them over. Credit scores are just a representation of a borrowers history of paying their debts, a borrowers confidence in their ability to maintain a steady income and proof that other lenders considered that borrower to be a reasonable risk to invest capital in. If you pay off your longest term loan all they see after is short or medium term loans which begs the question of why you are reducing costs. I'm not implying that eliminating debt isn't wise but it will lower your scores. |
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Posted: 10/13/2021 7:49:44 AM EDT
[#31]
Quote HistoryQuoted: I completely agree... We owe zero after we finished off the house last year. We heard the same nonsense when we knocked out 60k of her student loans in about 2yrs, almost 15yrs ago when we got married. I can't tell you how many times we were told to make minimum payments since it is such low interest, and invest anything we'd pay extra. She has friends she went to school with, that are still paying off similar loans 14-15yrs after they graduated. Our approach, we hammer those student loans and knock them out in 2yrs. THEN invest what we were putting into the student loans. It's worked out just fine for us. We have one credit card w/ zero balance. Had it for years. Only reason we have it, is because we've done a little traveling outside of the US and we greatly prefer using a credit card vs debit card for this. She takes it and uses it for groceries once a month because Chase threatened to cancel it once because it wasn't used in almost a year... then we pay it off. Beyond that, it just stays in the gun safe as we don't even bother carrying it around (Indiana native here). |
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Posted: 10/13/2021 7:52:50 AM EDT
[#32]
Honest objectively is pretty much a non-factor in a FICA score, really. Dude above with the 810 and no debt is an outlier. He'll probably disagree, but that's no skin off me.
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Posted: 10/13/2021 7:57:36 AM EDT
[#33]
Your credit score is just a measurement of how much of a risk you are to creditors.
No debt means no data, therefore ‘unknown’ and thus lower credit score. Be nice to not have debt and not worry able credit scores, but insurance companies want to tie their rates to your credit score. Not sure if they started doing that yet but I know there’s been talk. |
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Posted: 10/13/2021 7:59:43 AM EDT
[#34]
Quote HistoryQuoted: Honest objectively is pretty much a non-factor in a FICA score, really. Dude above with the 810 and no debt is an outlier. He'll probably disagree, but that's no skin off me. I didn't say I have zero debt.... I currently have 2 car loans. And like all of the other car loans I've ever had, they will be paid off early. My credit score dropped from 817 to 810 when I bought this latest vehicle, go figure. |
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Posted: 10/13/2021 8:03:22 AM EDT
[#35]
Let's set back and think here. Would you, as financial lender, rather have a client, that pays his debts on time religiously, thus escaping late fees and interest, or a borrower that is chronically late with payments, so they always have to pay late fees and interest, but still always eventually pay in full ? Trust me, the latter is preferred. There is an increased risk that the latter may at some point default entirely, but overall in the long run, and on average, the latter is way more profitable, especially when you remember that you will almost certainly get a gummint bailout because too big to fail if you overextend your assets on high risk loans.
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Posted: 10/13/2021 8:21:27 AM EDT
[#36]
Quote HistoryQuoted: Let's set back and think here. Would you, as financial lender, rather have a client, that pays his debts on time religiously, thus escaping late fees and interest, or a borrower that is chronically late with payments, so they always have to pay late fees and interest, but still always eventually pay in full ? Trust me, the latter is preferred. There is an increased risk that the latter may at some point default entirely, but overall in the long run, and on average, the latter is way more profitable, especially when you remember that you will almost certainly get a gummint bailout because too big to fail if you overextend your assets on high risk loans. The reliable one with significantly less risk |
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Posted: 10/13/2021 8:23:33 AM EDT
[#37]
Quote HistoryQuoted: Credit score is a score of how profitable you are to creditors. So you’re a guy that paid off a mortgage early? That means you’re more likely to pay off loans early, meaning less profit. Credit score goes down. Are you a guy that reliably pays all 96 payments on a 8 year car loan? Yeah, you’re pretty profitable in more ways than one, so credit score goes up. This |
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Posted: 10/13/2021 9:13:15 AM EDT
[#38]
Quote HistoryQuoted: Let's set back and think here. Would you, as financial lender, rather have a client, that pays his debts on time religiously, thus escaping late fees and interest, or a borrower that is chronically late with payments, so they always have to pay late fees and interest, but still always eventually pay in full ? Trust me, the latter is preferred. There is an increased risk that the latter may at some point default entirely, but overall in the long run, and on average, the latter is way more profitable, especially when you remember that you will almost certainly get a gummint bailout because too big to fail if you overextend your assets on high risk loans. I've made loans to a few people starting businesses. I want the payments on time every time a few extra dollars isn't worth the delay or the concern generated by late payments. |
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Posted: 10/13/2021 9:14:51 AM EDT
[#39]
Quote HistoryQuoted: My credit score dropped from 817 to 810 when I bought this latest vehicle You also realize that the three major credit agency's FICO scores aren't identical, too, right? Jesus, if you live by FICO you're doomed to a life of poverty. |
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Posted: 10/13/2021 9:20:05 AM EDT
[#40]
Quoted: Why do you care? |
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Posted: 10/13/2021 9:23:34 AM EDT
[#41]
Quote HistoryQuoted: The reliable one with significantly less risk Quote HistoryQuoted: Quoted: Let's set back and think here. Would you, as financial lender, rather have a client, that pays his debts on time religiously, thus escaping late fees and interest, or a borrower that is chronically late with payments, so they always have to pay late fees and interest, but still always eventually pay in full ? Trust me, the latter is preferred. There is an increased risk that the latter may at some point default entirely, but overall in the long run, and on average, the latter is way more profitable, especially when you remember that you will almost certainly get a gummint bailout because too big to fail if you overextend your assets on high risk loans. The reliable one with significantly less risk Yeah, because you are rational. Do you suppose the bankers are actually objectively rational, like Lehman, JP Morg, Manufacturers Hanover, et al, and the fed reserve are also rational, rather than making all they can right now, in the sure and certain knowledge that if it goes sideways those politicians you own will swoop in with a bailout and you can walk away free and clear whenever? I mean, you belong to the same country clubs and attend the same dinner parties in the same social elite circles, and all? 
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Posted: 10/13/2021 9:27:14 AM EDT
[#42]
Quote HistoryQuoted: I've made loans to a few people starting businesses. I want the payments on time every time a few extra dollars isn't worth the delay or the concern generated by late payments. Would you say, under oath, that that is because you know no one in gummint will rescue you, if that uncollateralized loan goes bad, or because you actually think you will make more money operating that way?
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Posted: 10/13/2021 9:27:19 AM EDT
[#43]
Mine did the same. Paid the house off in April, bought a new Jeep in May. My credit score still dropped but not much. I don’t really care though.
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Posted: 10/13/2021 9:30:35 AM EDT
[#44]
Quote HistoryQuoted: Yeah, because you are rational. Do you suppose the bankers are actually objectively rational, like Lehman, JP Morg, Manufacturers Hanover, et al, and the fed reserve are also rational, rather than making all they can right now, in the sure and certain knowledge that if it goes sideways those politicians you own will swoop in with a bailout and you can walk away free and clear whenever? I mean, you belong to the same country clubs and attend the same dinner parties and all? |
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Posted: 10/13/2021 9:30:48 AM EDT
[#45]
Pay off your home and two new vehicles and it drops around 60 pts.........................
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Posted: 10/13/2021 9:31:05 AM EDT
[#46]
Quote HistoryQuoted: Why are you here wasting valuable site resources? Your score dropped seven points? Are you serious? You also realize that the three major credit agency's FICO scores aren't identical, too, right? Jesus, if you live by FICO you're doomed to a life of poverty. Quote HistoryQuoted: Quoted: My credit score dropped from 817 to 810 when I bought this latest vehicle You also realize that the three major credit agency's FICO scores aren't identical, too, right? Jesus, if you live by FICO you're doomed to a life of poverty. Your reading comprehension may suck less if you quoted the entire post instead of a partial sentence... but I doubt it. |
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Posted: 10/13/2021 9:33:33 AM EDT
[#47]
Quote HistoryQuoted: Ignore that guy and stop posting rational and informed posts! This is GD after all. Quote HistoryQuoted: Quoted: Yeah, because you are rational. Do you suppose the bankers are actually objectively rational, like Lehman, JP Morg, Manufacturers Hanover, et al, and the fed reserve are also rational, rather than making all they can right now, in the sure and certain knowledge that if it goes sideways those politicians you own will swoop in with a bailout and you can walk away free and clear whenever? I mean, you belong to the same country clubs and attend the same dinner parties and all?
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Posted: 10/13/2021 9:34:03 AM EDT
[#48]
We've been retired a LONG time. My wife asked me what our credit score was. I checked ( hadn't checked since about 2000) and it was 850. OK. Checked again the next month and it was 840. Hmmm.
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Posted: 10/13/2021 9:34:27 AM EDT
[#49]
We've been retired a LONG time. My wife asked me what our credit score was. I checked ( hadn't checked since about 2000) and it was 850. OK. Checked again the next month and it was 840. Hmmm.
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Posted: 10/13/2021 9:35:05 AM EDT
[#50]
No credit....No score
Carry a small balance to solve this problem. |
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