Maggie's Farm

We are a commune of inquiring, skeptical, politically centrist, capitalist, anglophile, traditionalist New England Yankee humans, humanoids, and animals with many interests beyond and above politics. Each of us has had a high-school education (or GED), but all had ADD so didn't pay attention very well, especially the dogs. Each one of us does "try my best to be just like I am," and none of us enjoys working for others, including for Maggie, from whom we receive neither a nickel nor a dime. Freedom from nags, cranks, government, do-gooders, control-freaks and idiots is all that we ask for.

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Tuesday, September 10. 2019

Building or maintaining your credit score


Your credit score is sort of like a grade in practical life-management. The way life is, one never knows when a little or a lot of credit might come in handy.


Here's one piece on the topic:  How to Raise Your Credit Score


A few other tips: Not a great idea to entirely pay off a mortgage. Regular mortgage payments are important, even if you maintain a small balance.  Also, never entirely pay off a credit card. Keep a balance, however small, or some wierd algo might decide to cancel your card for no good reason (it happens even to prosperous people when an algo gets tired of you and a zero balance is its chance), and that's a ding. Regular, on-time payments are the best thing for your credit. It's because lenders are in the business of lending, and like borrowers. Never, ever, cancel a credit card. So, for your credit score, use all of your credit cards and never pay them off entirely. But, yes, you can get rid of student loans. 


Another detail: Too many checks of your credit harms your credit score. However, you can check your own once in a while, for free online. 


Your results may vary. We probably have readers with experience with all of this. 


Posted by The Barrister in The Culture, "Culture," Pop Culture and Recreation at 15:54 | Comments (20) | Trackbacks (0)

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Use the credit card often but always pay the entire thing, never carrying a balance. I look forward to paying off the mortgage in a few years and don't give a damn what the credit agencies think of me. At that point I won't need them.
#1 NJSoldier on 2019-09-10 16:30 (Reply)
You never know when you might need some credit. You have a good Yankee attitude, but unexpected things can happen in life.
#1.1 the B on 2019-09-10 16:33 (Reply)
Yeah there is no reason to hold a balance. You can get fine credit with almost no credit. All I have is three cards with 6000 total revolving I never run a balanced, I actually play games with it and do different percentages every month to watch the score change, no car payment no mortgage and I have a 800 credit score. At about 8 years ago my credit was in the toilet after medical issue at a loss of job
#1.2 Whitney (Link) on 2019-09-13 18:48 (Reply)
Some of this is nonsense. I pay off cards every chance I get and cancel ones that I haven't used in a while. I do not make minimum payments; I max 'em up. If my credit rating (850 last time I looked) has suffered, I can't tell.
#2 LAG on 2019-09-10 16:50 (Reply)
Nicest part of paying it all off, is that there is only the barest credit check on a man with a handful of cash. One phone call to the bank was all it took for my wife to buy her latest car with a postdated check for the full amount. Had I not been present, I suspect the salesman would have proposed marriage to her on the spot.
#2.1 Mike Anderson (Link) on 2019-09-10 17:00 (Reply)
We put everything we can on our card for the points. Pay the entire balance each month. Makes it a free service, and if you run into an unscrupulous vendor, you can take his money away until you resolve the issue. Debt is like cancer.
#3 RJT on 2019-09-10 17:01 (Reply)
My wife and i do the same thing. We get lots of stuff using the points.
#3.1 kelvin on 2019-09-11 06:19 (Reply)
Same here. Savings beat credit any day.
#3.1.1 Texan99 on 2019-09-11 12:55 (Reply)
Sorry, I am not buying this "you have to get into debt and stay in debt" attitude. My wife and I have been debt free for the last decade. We pay our CC balances off every month and save up and pay cash for large purchases. Our finances are great, our credit score is great. An article from a website called debt.org should be a tipoff about the advice they offer.
#4 Pod Hamp on 2019-09-10 17:02 (Reply)
Use an airline affinity credit card as "plastic cash." Pay the "statement balance" each billing period. The "total balance" generally exceeds the statement balance, so there is almost always a non-interest charging balance on the card. Haven't paid for our ski trip flights in years 'cause we have the points to cash in.

Have another credit card that sometimes carries zero balance for months on end. Never seems to cost me anything in my credit score. Too many cards, regardless of zero balance, however, will downgrade credit score a bit. Can't say how many is too many.

Paid off the mortgage, didn't hurt my credit score in any detectable amount.

Am talking to mortgage companies now and they are perfectly happy to offer us whatever mortgage we'd like (keeping in mind we have no need for any mortgage that is even remotely a stretch for our finances).
#5 Knucklehead (Link) on 2019-09-10 17:47 (Reply)
Get a credit card that gives a benefit you want (air miles, cash back, etc) and pay it off every single month.

It's already been said: debt is kind of a cancer - I think of it as a drug with a pusher on almost every corner.

I've had credit cards that I don't use literally for years and occasionally get a note that my limit is being reduced or, more rarely, the card will be cancelled. Usually I'll pop it out for a few small purchases and all is again well with the world.

We paid off our mortgage and it's true, within a month or two our credit score was reduced from Nearly Perfect down to just Great.

In any case you never get a terrible credit score until you do terrible things with credit. You really have to behave irresponsibly.
#6 Aggie on 2019-09-10 18:03 (Reply)
People have different experiences, I see.

Perhaps the biggest challenge is raising one's score.
#7 the B on 2019-09-10 18:13 (Reply)
It’s probably like freshman year college grades and the stock market: they go up slowly with effort but slide down fast when you’re not even looking.
#7.1 Annie on 2019-09-10 18:32 (Reply)
Interesting point about (possible) negative impacts of paying off your mortgage - I hadn't thought about that when I downsized and paid off both I was carrying last year. But as far as i can tell it didn't negatively impact my score.
I agree with the others, use a card you like the points value you get and pay it off monthly, that free vacation or upgrade on a long flight to first class can be a real treat!
#8 bk on 2019-09-10 19:44 (Reply)
Credit cards have assumed the traditional role of savings accounts. Have an unexpected expenditure? Just charge it.
#9 snopercod on 2019-09-10 20:16 (Reply)
"Your credit score is sort of like a grade in practical life-management."

I call bullshit.
#10 David on 2019-09-11 01:16 (Reply)
There are some good tips on that site, but listening to Clark Howard and following his advice will be more helpful.

Never co-sign a loan for children and never make them authorized users. Not for any reason.

Never keep a balance on your credit card. Never close them unless they cost you money. The small hit to your score is worth the long term savings. You can keep zero debt and maintain a credit score over 800.

I've never heard that paying your mortgage off will lower your score. If you're worried about that then just open a HELOC and use it once a year for something small and pay it off.

The most important thing to do is FREEZE YOUR CREDIT REPORT!!! Do it this week.
#11 Jack Walter on 2019-09-11 07:28 (Reply)
Paid off the mortgage 15 yrs. ago, credit debt zero'd every month, no loans of any kind in decades, credit score in the northern 800. Every couple of years they raise the debt limit on the two credit cards.

Bought a Ford pickup from a dealer a few years ago but they don't take credit cards (who knew?), so they just handed us the keys and said they'll send someone around for a check later! Later turned into the next day sometime. Our credit is just fine.

I read somewhere only about 8% of homeowners hereabout are mortgage free. Darn shame, that.
#12 FriscoScooterTrash on 2019-09-11 18:52 (Reply)
It all depends. Some people have more mortgage debt than they can afford. I know people who make much more money than I do that couldn't afford an unexpected $1000 repair because their mortgage payments are too much.

My mortgage rate is 2.9%. I don't consider it debt at all. It would be a bad investment to make additional principle payments towards that loan.
#12.1 Jack Walter on 2019-09-12 06:32 (Reply)
When Maggies Farm is toeing Equifax's line, then something's sorely amiss.

When Obama gives a commencement speech to a graduating class at Harvard in which he says, with a straight face, that America is a "Muslim" nation, it is our consumers' religious genuflection to a tripartite "credit rating system" in order to salve their purchasing power anxieties (among our other veiled, centralized priesthoods), that he is alluding to.

It used to be it was Santa Claus who determined who was naughty or nice. Now it's a claque of shady 'rating' agencies we appeal to.

Checking your credit score daily to gauge your degree of purchasing status is not exactly kneeling t'wards Meccah on a jute rug five times a day. But it's darned close!
#13 steveaz on 2019-09-12 13:23 (Reply)

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