@debbie1124 wrote:
@Anonymous wrote:
@Anonymous wrote:
I would advise folks to be careful of much of the information available on this site. In reading here for about 2 years (almost all before joining) and working in the banking industry for 5 years, I can promise you all that trying to sort out the good info from the bad around here is a lot like trying to sort the raisins from the bran flakes in a box of Rasin Bran cereal. There's definitely some good info to be had (i.e., raisins), but there's a whole lot more of the bran flakes kicking around.
One of the most dangerous notions I keep seeing over and over is the idea that credit is some kind of a game to be played and won. This is an excellent attitude to have if your end goal is bankruptcy. Otherwise, not so much. People should be careful about getting a significant amount of credit in relation to their income. If you're addicted to acquiring credit, then you've already got the personality type that makes having too much available credit a risky venture: an addictive personality. It's often this type of person that gets addicted to spending money as well.
Another dangerous mindset is relating your credit health to your overal lfinancial health. The two things are are only marginally related. Truly, one's financial health has a lot more to do with income, budgeting, and saving for retirement/the future. Having a good credit score has very little to do with any of this (beyond having the ability to get good loan rates, which for secured borrowing is determined by other factors anyway). For example, many people don't seem to realize is that for a mortgage your rate is determined by several other factors that go far beyond a 3 digit number. Some banks have a minimum qualifying score, which is usually quite low, and that's about as much as the score factors in.
Ok, I'm borderline ranting here, so I'll end off. I just want everyone to be careful and take these money matters more seriously than if it were all a big game of Monopoly.
G
You make some good points, especially about not just putting focus on credit scores but overall financial health. Part of the 'game' I suppose is knowing what your own definition of 'winning' is: is it being debt-free? (=lowered credit score) or maxing your scores for a potential loan or mortgage by staying at least just a little in debt? For me, my education here on the Fico boards about credit has coincided with a renewed focus on financial heatlh, and saving and retirement is defiitely a part of that. Overall, I think the boards here have contributed a lot to my general knowledge about finance and credit.
Here's the thing, though...maximizing your scores does NOT require staying even "just a little" in debt. Letting a small balance report and "staying in debt" are wildly different. Maximizing scores can be accomplished simply by paying your cable bill with a credit card, letting the balance report, and then paying it off.
Debbie1124: You are right about that, of course. I was thinking more about situations where a person pays off an installment loan and then finds that as a result their Fico scores have gone down. Some people actually keep a small installment loan going at all times to maximize their scores. Not my style, but whatever works....
