i use my card for everything and pay it off at the end of the month, so why do i use a card? because i can get either cash rewards or free stuff that i would not get paying cash
you can make it pay you to use it...
Posted on 11/27/2011 7:20:54 PM PST by Graybeard58
Credit scores inspire anxiety in many consumers. We can't easily see them, and we don't always know what's lurking behind them. Perhaps that's why there seem to be so many myths and misperceptions about exactly what's in a credit score.
In a recent national survey by Visa Inc. that asked U.S. consumers what factors negatively affect a credit score, plenty of answers were flat-out wrong.
About 25 percent mistakenly thought where they live could hurt their credit score. Others said — erroneously — that their job, their ethnicity or even their age could affect a credit score.
The findings are "dismaying," said Jason Alderman, Visa's global financial education director. But, he added, they aren't altogether surprising.
"People are uncomfortable talking about money, so they perpetuate misinformation by not discussing it with friends, family or at work," Alderman said. "These (erroneous) ideas pop up ... but people don't talk about them, so the myths become solidified."
A credit score is that magical, somewhat mysterious, number that determines so much of your financial life — from what you'll pay on a car loan or mortgage to, in some cases, whether you'll get hired. Typically ranging from a low 300 to a perfect 850, the higher your score the better terms you'll get from lenders and creditors.
Gerri Detweiler, a personal finance expert for Credit.com in San Francisco, says people carry a lot of misinformation about credit scores.
One of the common myths is that getting credit counseling or taking a debt management class is as bad as filing for a Chapter 13 bankruptcy.
"Credit counseling used to be reported in a way that had a negative impact, but it's not true anymore," Detweiler said. Taking a debt management class has never affected your credit, she added.
Another myth: A short sale is better for your credit score than a foreclosure.
"That's not necessarily true. They're both very negative and, depending on how the lender reports them, can have a significant impact on credit scores."
But even the negative factors on a credit score eventually get dropped from your credit history. Things like Chapter 11 bankruptcies, foreclosures, late payments and other hits generally fall off after seven years. Also, the older a negative citation is, the less impact it'll have on your credit score. As credit score site MyFico.com notes, a 5-year-old debt collection will hurt far less than one that's 5 months old.
Credit scores are based on credit reports, the financial history on you as compiled by the nation's three credit reporting bureaus: Equifax, Experian and Trans Union. By law, every consumer is entitled to a free, annual credit report from each of the three bureaus. To request your copies, call (877) 322-8228 or go to AnnualCreditReport.com.
It's a good way to spot any errors that need correcting and to get a snapshot of how you look to lenders, whether it's for a car, a mortgage or a credit card.
According to Visa's survey, 42 percent of Americans don't regularly take a look at their credit score.
"If you don't know where you are on the map, you can't get to where you need to be," Alderman said.
Why does a credit score matter so much? Money. On a loan, a higher score can save you thousands of dollars. For instance, on a 30-year, fixed-rate mortgage for a $250,000 house, a buyer with a credit score below 640 will pay about $258,700 in interest, according to MyFico.com. The buyer with a credit score of 760 or higher will pay only $170,800 in interest over the life of the loan. That's a difference of almost $250 a month.
It's a given that the malingering economy makes it difficult to stay credit-healthy. "If you're struggling, it becomes a harder road to a better credit score. But that doesn't mean you should give up," said Alderman.
If you're having a hard time paying bills, call your creditors to let them know. Ask about getting the minimum monthly payment reduced or stretching out the payments.
So it's not bad, but just faking it!
Your “credit score” is another “product” invented to sell you something you don’t need.
Get credit card offers in the mail? Get blank checks from your credit card companies? You’re golden!
Close a credit card and your score is lowered.
Even if you pay your credit card in full every month on time for years on end, you are still penalized if you use too much of your credit line.
I believe these illogical rules are purposely set up to lower scores, of even the most credit worthy, so they can bang you with higher rates when you apply for credit.
$250 a month is a lot, to me anyway.
No need to fret, turn it around...
Do the FICO LIMBO !!!
See how low you can go!
Close a credit card and your score is lowered.
Even if you pay your credit card in full every month on time for years on end, you are still penalized if you use too much of your credit line.
I believe these illogical rules are purposely set up to lower scores, of even the most credit worthy, so they can bang you with higher rates when you apply for credit.
Exactly. I have never checked my credit score, and I certainly don't care to. I do not use credit - never have, never will. If I can't pay for it in cash, then I don't need it regardless of what I may think at the moment. It took me nearly 20 years of saving to purchase a home, but when I did it was mine (with the excecption of a dowry to the county tax collectors annually). Most people will roll their eyes and cast sarcastic comments, but I sleep well knowing I have never lived outside of my means even if it meant eating rice and ramen noodles for weeks at a time when I was younger. It is possible - people just need to set their priorities in order. Or ..... keep being screwed over by banks and CC companies.
You be correct, Credit is EVIL, don’t need it, don’t use it. Pay cash for everything, even a house.
i use my card for everything and pay it off at the end of the month, so why do i use a card? because i can get either cash rewards or free stuff that i would not get paying cash
you can make it pay you to use it...
How do you pay cash for a house? How does a family with regular incomes save enough to pay cash?
Live beneath your means, rent a very cheap place and save the difference or double up with family and save the difference. You’ll have paid an amount equal to the original purchase price of the home before 15 years of a 30 year note is done anyway.
So, you’ll be living in reduced circumstance for a decade or more, but being payment free for the duration of outright ownership in order to avoid 30 years of payments, the first decade of which is very heavily interest and little principal, and ultimately paying twice as much for it over time, more or less.
Deferred gratification, it’s the way things used to be done.
My credit is better than my bank’s. The only problem is I have to bail them out and they don’t have to bail me out.
I do get what you are saying and it would be easy in a state that had inexpensive housing. There is no way do do what you suggest in states like say California or New York.
However, we have zero debit beside the house and are selling in one year and buying a place for cash.
Longer than you are suggesting but a strategy worked for us.
Bump
Ping
True, but what if you DON’T? Then, perhaps its nice to be able to see what’s going on and how you can fix it.
That said, most of the “credit scores” sold by companies are not the same ones used by lenders.
With just a few exceptions, only the FICO scores are the “real” ones. Anything else is just BS. Only a few places give a consumer the “real” FICO score.
It’s pretty hard to rent a car without having a credit card, at least in California.
OK. Well, that’s something I didn’t know.
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