What's your credit score? Do you monitor?

[jasonochs25]

Can't tell if you're serious or sarcastic, but thank you. :mod:

Was being serious!

 

[Unner]

It was built by doing it intelligently. Not buying big screen tv's and $1000 speaker systems just to keep up with the Jones'. That's where credit gets people in trouble. My philosophy with credit is that if you don't have the money in the bank to pay cash for it then you probably shouldn't put it on a credit card. Exception being a large purchase like a house or a car. But if you can pay cash for those you are probably better off doing that than financing it anyways.

This exactly. I don't really understand making payments on a car unless it absolutely necessary. You can get a perfectly fine car for $10k, financing anything over that doesn't make sense to me, but I know I'm in the minority there. I don't ever plan to make a car payment. If I can't pay cash then I don't need that car.

+1. I do this, too, and people think I'm nuts: "You don't have a debit card?"

Why should I? My CC does the same thing, functions the same way, AND I actually get something back for it (it's a Cabela's visa, so I can buy guns with the points I earn ).

My credit score is (luckily) still over 800. I actually do monitor it, mainly because of data breaches. When OPM (U.S. Office of Personnel Management) got hacked by our pals in China last year, 20+ years' worth of my employment records, background information, and security clearance data was stolen (yay).

But this was only AFTER some genius at the VA lost his or her gov't-issued laptop a few years before and all my military records were lost.

I just keep my debit card as a backup incase my CC doesn't work. I run it once every other month or so just to make sure it still works. My credit card is a VISA through my credit union so everything is still managed at one place which is nice.

 

[jeremyc74]

660 to 771 in a year? That's pretty wild.

.

I've learned that credit card balances have a huge impact. I've seen mine swing by 60 points in 60 days a couple of times.

I'm a one person LLC (a consultant basically), so my business AmEx is tied to my personal credit. Sometimes when I'm busy I'll run up 12-15k on the card for materials and travel expenses, but since my customers have 30 day terms to pay, and then drag their feet I have to let that float until I get paid.

At the same time, I'm not getting paid personally, so I'll use my other cards to cover some things at home (I like to keep plenty of cash on hand in case of an emergency), so those balances go up too. Especially this time of year with the holidays.

I assume the credit agencies see this rapid rise in credit card balances and assume I'm broke and a high risk, and I've seen my score get down into the mid 600s. Then when I finally get paid from my customers I pay everything down, and it pops back up over 700. The first time it happened it really scared me, but now that I know what's going on I don't care. I'm not in the market for a loan anytime soon, and if I need one I'll time it so the balance is paid down on everything before I start shopping around.

Here's the most recent example:

At the point where they grabbed this score the balance on the AmEx was still close to $10k because I'm already buying materials for the next job, so it would probably pop up over 750 if I wiped that out completely. I'm in the process of having an error removed right now, but it was put on there by the State of IN over some local taxes, and even though they admit that there was never an outstanding balance to send to collections I can't get anyone there to lift a finger to help me fix it. They don't seem to have a standard form for "We screwed up and admit it". hwell:

 

[THatfield]

So thanks to this thread, I joined up on Credit Karma. Now I figured my score was bad due to an account in collections, and I was right. Currently at a 584/590 for TransUnion and Equifax, respectively.

What steps would you guys recommend to start rebuilding my credit? I am actively paying off the account in collections, and I'm only about a grand away from closing that account. So once I get my tax return that will be paid off in its entirety.

Credit Karma has recommended a few cards to help my credit, but I'd like to see what others on here have used to successfully rebuild their credit if they've been in a similar situation as my own.

Thanks guys, and thanks OP for starting this thread.

 

[cashmoney]

I wouldn't get anything new until you get your collections paid off. At that point I'd get a card with a 0% for 12mo intro rate and no annual fee and use it for gas purchases only. Once you get comfortable with budgeting for that and using it and paying it off monthly then you can start using it for your normal every day stuff. Not bills but your daily expenditures like lunch. Slowly stair step up.

But, none of that happens until you get at least a $1000 in a savings account for an emergency fund and set up a monthly budget that you redo every month and once you've gotten good at managing your money then start caring about your credit. You shouldn't worry about your credit until you've got a solid understanding of your finances and can budget and save money.

 

[THatfield]

I wouldn't get anything new until you get your collections paid off. At that point I'd get a card with a 0% for 12mo intro rate and no annual fee and use it for gas purchases only. Once you get comfortable with budgeting for that and using it and paying it off monthly then you can start using it for your normal every day stuff. Not bills but your daily expenditures like lunch. Slowly stair step up.

But, none of that happens until you get at least a $1000 in a savings account for an emergency fund and set up a monthly budget that you redo every month and once you've gotten good at managing your money then start caring about your credit. You shouldn't worry about your credit until you've got a solid understanding of your finances and can budget and save money.

cashmoney, thanks for the Sound advice. I do try to keep a budget on excel weekly so I can keep track of my money. However I don't keep up with it like I should. I do tend to allocate at least a hundred or so to my savings every paycheck. However recently my paychecks have gotten smaller due to reduced hours at work. Still have to pay my bills so I'd say the last 3 paychecks I haven't put anything in savings. I haven't had to tap into it though either which is good. I think going forward I should really try to get back into using my excel budget or find another medium to keep track of my finances. I use my debit card for almost everything so I can see what I spend but it's in no way an organized budget.

Thanks for the advice.

 

[cashmoney]

Budget is the most important thing. Figure out your most basic needs (food, housing, clothes), cut out the extraneous, and live very lean until you've paid off the debt. Getting out of a car payment was the best thing I've done. Just ditching that $400/mo payment (not to mention fuel and insurance) we were able to pay cash for a 10 day trip in Italy where we had no restrictions on our spending and excursions because we had saved $15,000 in cash in one year. Plus we've been able to put money in a Roth IRA every month on top of raising our contribution to our 401k's to 12% from 5% and still have money going into savings. We were also able to pay off all of her credit card debt from when she was 18 (she's 30 and we just paid it off this year).

On the flip side of that, doing the above also allowed us to get enough credit to where when we had to buy her a newer car (her's had over 225k and was due to upgrade to something more family oriented) we were able to get 1.5% interest instead of 5-6% like we were when I sold my last truck I had financed. I would have preferred to not have the payment again but I'm not upside down on it and sometimes you just gotta make mama happy. We did buy a 3yr old vehicle though so we didn't get hit with the huge depreciation hit.

We still have the money going into a Roth and our 401's and our savings and are looking to start investing next year. All of this is because we figured out our budget and cut expenses where we could. You'd be surprised on the stupid shit you spend money on when you aren't paying attention.

 

[tigger]

Keep in mind, Credit Karma isn't showing you a FICO score. It is their own version called VantageScore 3.0 and can vary as much as 100 points from FICO.

In addition, the FICO score that you get from your credit card statements isn't the same as a FICO score pulled up by a lender.

This is why you see different limits of 850 and 900 and 950 and why your score will vary from place to place.