topic Re: What is your goal? Why play the FICO game? in Personal Finance

What is your goal? Why play the FICO game?

Anonymous — Sat, 27 Jul 2019 20:29:35 GMT

Hi, I'm looking for more inspiration to be purposeful with my finances and I want to know what yall are working towards. I'm rather new to improving my FICO score so all ideas are new ideas to me.

My first goal is to improve my loan terms on future purchases like my future dream-home and maybe a nicer car when this one dies. Also I want better terms on my car insurance and anything that pulls my credit.

My second goal is to retire early- before 55 if possible which requires a TON of work now so I'm starting early. I figure a great FICO score can only help me since "Rich Dad, Poor Dad" says debt can be the fastest way to build wealth.

Re: What is your goal? Why play the FICO game?

Anonymous — Sat, 27 Jul 2019 20:55:28 GMT

You certainly save some money when you can get approved for the best rates. I also feel it is necessary(for me) to have high enough limits where I can go out and make a large purchase and not have to worry about the reporting balances killing my scores.

You never know when you may need credit immediately. My car could die tomorrow and I would have to go get one. Sudden funeral expenses? Need a new roof before the next rain hits? Applying for a new job and they run a credit check? In these scenarios, you probably won't have time to fix your scores/profile so it is better to keep them as reasonable as possible.

Re: What is your goal? Why play the FICO game?

chhull00 — Sat, 27 Jul 2019 21:22:58 GMT

nice answer

Re: What is your goal? Why play the FICO game?

hernaemm90 — Sat, 27 Jul 2019 23:05:40 GMT

@Anonymous wrote:

I figure a great FICO score can only help me since "Rich Dad, Poor Dad" says debt can be the fastest way to build wealth.

Is this sarcastic?

Re: What is your goal? Why play the FICO game?

pinkandgrey — Sat, 27 Jul 2019 23:51:42 GMT

Mostly for my own satisfaction lol

But also so I can get good rates on mortgages/auto loans, etc.

Also, it’s kind of fun.

Re: What is your goal? Why play the FICO game?

Anonymous — Sun, 28 Jul 2019 03:31:43 GMT

My daughter was rear-ended in my car yesterday. While the damage initially looked minimal, it now looks like it could have caused some buckling that may be more expensive to fix than (the insurance deems) it's worth. However, I can walk in to any dealership tomorrow and get a car at a good rate. That's why I've studied this site for 3 years and worked to maximize my credit score. (I also really like finance, in general.) It gives you options...when you may not expect to need them.

Re: What is your goal? Why play the FICO game?

Anonymous — Sun, 28 Jul 2019 05:29:35 GMT

@pinkandgrey wrote:
Mostly for my own satisfaction lol
But also so I can get good rates on mortgages/auto loans, etc.
Also, it’s kind of fun.

Yep. The satisfaction and fun.

I don't need credit. It's nice to have it but I could live without it just as easily. It's satisfying getting that feeling of accomplishment though when you land those approvals though!

Re: What is your goal? Why play the FICO game?

Andypanda — Sun, 28 Jul 2019 06:15:55 GMT

I do it to maximize my credit card rewards. Also for cases like when i need a new cell phone I want to be able to pay it off over 24 montgs interest free, to keep my money earning interest longer.

Re: What is your goal? Why play the FICO game?

Anonymous — Sun, 28 Jul 2019 08:10:20 GMT

@Anonymous wrote:
It gives you options...when you may not expect to need them.

This is exactly what I'm thinking, you said it well. I want the options and financial literacy to deal with the unexpected: both good opportunities and bad stuff like accidents.

I'm seeing some forum signatures with more than $100k in available credit and even one with >$500k. Wow, those are impressive numbers but what does it afford you? What would you use part of that credit for? Or is available credit just a by-product of optimizing credit scores?

Re: What is your goal? Why play the FICO game?

Anonymous — Sun, 28 Jul 2019 08:17:31 GMT

A lot of people on the forum just like seeing that total CL number get bigger, without a lot of intention of "utilizing it," outside of padding utilization and helping continuing the snowball. For me, I can attest to those lines providing a certain level of flexibility, and even opportunity, for business growth. Life is just easier with good credit.

Re: What is your goal? Why play the FICO game?

Anonymous — Sun, 28 Jul 2019 08:43:14 GMT

@Anonymous wrote:
@Anonymous wrote:
It gives you options...when you may not expect to need them.
This is exactly what I'm thinking, you said it well. I want the options and financial literacy to deal with the unexpected: both good opportunities and bad stuff like accidents.

I'm seeing some forum signatures with more than $100k in available credit and even one with >$500k. Wow, those are impressive numbers but what does it afford you? What would you use part of that credit for? Or is available credit just a by-product of optimizing credit scores?

It's just nice to have. The extra padding cushions higher utilization.

A perfect example is I usually exclusively PIF but this month I threw a $2500 charge on my SavorOne that my roommate is going to be paying back to me and I took a $3500 BT to checking from my Discover card. Since I have $73,150 in revolving limits, that comes out to only 8.4% of my total limits, keeping BT me below the 8.9% aggregate utilization threshold and since my limits on the cards are $10K and $12.7K respectively, my highest utilization on a single account is only 27.6% which is still below the 28.9% single card utilization threshold that lenders consider optimal. If I didn't have such large limits, I couldn't have done that without assuming a large FICO penalty.

Re: What is your goal? Why play the FICO game?

Anonymous — Sun, 28 Jul 2019 17:59:38 GMT

@hernaemm90 wrote:
@Anonymous wrote:

I figure a great FICO score can only help me since "Rich Dad, Poor Dad" says debt can be the fastest way to build wealth.
Is this sarcastic?

No he's referring to using leverage with real estate. Debt can be extremely useful for real estate investing which is what Robert Kiyosaki talks a lot about in his #1 best seller Rich Dad, Poor Dad and Kiyosaki is pretty much the polar opposite of someone like Dave Ramsey saying that all debt is bad debt. In Kiyosaki and most real estate investors eyes using OPM (other peoples money) i.e. debt is a good thing because it can make you a lot more money than the cost of the debt. With that said Robert doesn't believe in having bad debt i.e. credit card debt...he views that as being extremely stupid.

Re: What is your goal? Why play the FICO game?

Anonymous — Sun, 28 Jul 2019 18:02:03 GMT

@Anonymous wrote:
You certainly save some money when you can get approved for the best rates. I also feel it is necessary(for me) to have high enough limits where I can go out and make a large purchase and not have to worry about the reporting balances killing my scores.

You never know when you may need credit immediately. My car could die tomorrow and I would have to go get one. Sudden funeral expenses? Need a new roof before the next rain hits? Applying for a new job and they run a credit check? In these scenarios, you probably won't have time to fix your scores/profile so it is better to keep them as reasonable as possible.

This nails the head on the spot.

Re: What is your goal? Why play the FICO game?

Anonymous — Sun, 28 Jul 2019 18:19:07 GMT

@Anonymous wrote:
Hi, I'm looking for more inspiration to be purposeful with my finances and I want to know what yall are working towards. I'm rather new to improving my FICO score so all ideas are new ideas to me.

My first goal is to improve my loan terms on future purchases like my future dream-home and maybe a nicer car when this one dies. Also I want better terms on my car insurance and anything that pulls my credit.

My second goal is to retire early- before 55 if possible which requires a TON of work now so I'm starting early. I figure a great FICO score can only help me since "Rich Dad, Poor Dad" says debt can be the fastest way to build wealth.

I'm in a similar point in my life though a little further along the path. I'm doing a house hack having bought my home which is a single family house with a detached auxillary dwelling unit being a three bedroom apartment that I'm living in while finishing up the house so I can rent it out to help lower my cost of living. The property also has a detached office building on it as well that I want to turn into backyard cottage which I can rent out as well but that's two years down the road at the minimum. Also I'm putting an extra $250 a month to the principle of my mortgage and once a year I'll be putting in an additional $1,000.00 to the principle as well. Hoping doing that and stashing away money in the bank I'll be able to pay off my home in 10 years. When I pay off my home I'll be able to live for free off the rent of my tenants.

As far as credit cards go to me at least they are tools...nothing more. I used them to increase my credit score which made getting approved for a mortgage extremely easy. Besides increasing my FICO score so in the future when I go to get more rental property I pay the lowest rate possible I use credit cards as kick back for stuff I normally purchase.

Really credit cards are good for 4 things IMO the first being increased FICO scores so you can get loans which can help you advance in life i.e. rental property, business loans, etc. The second thing is ease of use with credit cards being more convient then cash. Third thing credit cards are great at is protection...someone steals your wallet full of credit cards? Just have you credit cards frozen and you can get them replaced in a couple of days. Have a wallet full of cash that gets stolen? You are up the creek without a paddle in that situation. Fourth and final reason in my eyes as to why people should have credit cards is for the kick backs whether it's cashback or travel rewards if you can get something extra back that's useful from spending why wouldn't you take it?

Re: What is your goal? Why play the FICO game?

sarge12 — Sun, 28 Jul 2019 18:47:39 GMT

@Anonymous wrote:
Hi, I'm looking for more inspiration to be purposeful with my finances and I want to know what yall are working towards. I'm rather new to improving my FICO score so all ideas are new ideas to me.

My first goal is to improve my loan terms on future purchases like my future dream-home and maybe a nicer car when this one dies. Also I want better terms on my car insurance and anything that pulls my credit.

My second goal is to retire early- before 55 if possible which requires a TON of work now so I'm starting early. I figure a great FICO score can only help me since "Rich Dad, Poor Dad" says debt can be the fastest way to build wealth.

Well...it is nice to have goals, but life has a way of making plans for us at times. Certainly high credit scores can make life better, and a low rate on a mortgage is the #1 reason to maintain high credit scores. I used to have 62 as my target retirement date, but life happened and put me on a different course. I am now 61, and have not worked a day since I was 54. That was in fact pre-determined likely at birth. I never knew that the canal my cervical spinal cord was inside of was getting smaller every year. When I developed a limp for no reason at all, I did not even worry about it, it after all was not painful. I truly was totally ignorant of how close I was to being paralyzed or dead. By the time I knew I had serious issues my 10 mm spinal cord which should have a 13 mm canal to rest in, instead had under 5 mm, and there was permenant damage to my spinal cord. So life resulted in SSDI and fortunately a fairly large 401k and retirement that I could take as a lump sum. I wish I was still working, but life determined a different path. It is good to have plans though, even if those plans are never acheived.

Re: What is your goal? Why play the FICO game?

Anonymous — Mon, 29 Jul 2019 01:26:28 GMT

@Anonymous wrote:
No he's referring to using leverage with real estate. Debt can be extremely useful for real estate investing which is what Robert Kiyosaki talks a lot about ...

Yes, that's what I was thinking. I don't mean using credit cards to buy property, I mean gaining better terms on mortgages due to higher credit scores. Fund & Grow does some interesting stuff with 0% APR business credit cards for buying real estate but I'm leery of the risks there. What if the real estate appraises low... then you only have 12 months to make up the difference between your small mortgage and the leveraged credit.

CWA, I like what you're saying about paying off your mortgage early to reduce expenses and gain financial freedom. I would like rental income someday although I'm not passionate about real estate other than the financial freedom it can provide.

Sarge, I'm sorry to hear about your change in plans, I'm so glad you have a good retirement fund to fall back on. I'm worried about medical issues as I get older which is another driving force for me to get my finances in order.

Re: What is your goal? Why play the FICO game?

iced — Mon, 29 Jul 2019 20:24:46 GMT

@Anonymous wrote:
Hi, I'm looking for more inspiration to be purposeful with my finances and I want to know what yall are working towards. I'm rather new to improving my FICO score so all ideas are new ideas to me.

My first goal is to improve my loan terms on future purchases like my future dream-home and maybe a nicer car when this one dies. Also I want better terms on my car insurance and anything that pulls my credit.

My second goal is to retire early- before 55 if possible which requires a TON of work now so I'm starting early. I figure a great FICO score can only help me since "Rich Dad, Poor Dad" says debt can be the fastest way to build wealth.

I don't play the FiCO game. Came on once a few years back to ask why my score wouldn't budge past 760 and just kind of stuck around. At this point in my life I don't need credit, so my score is not something that I stress much about anymore. I have the rewards cards that suit my travel and spending patterns, so I'm good there too.

For bigger goals, I'll stop working once I either have $10 million saved up or turn 70... probably. I obsess over saving the way others here obsess over boosting their scores, so stopping may be hard to do.

Re: What is your goal? Why play the FICO game?

Anonymous — Mon, 29 Jul 2019 20:36:20 GMT

@Anonymous wrote:
You certainly save some money when you can get approved for the best rates. I also feel it is necessary(for me) to have high enough limits where I can go out and make a large purchase and not have to worry about the reporting balances killing my scores.

You never know when you may need credit immediately. My car could die tomorrow and I would have to go get one. Sudden funeral expenses? Need a new roof before the next rain hits? Applying for a new job and they run a credit check? In these scenarios, you probably won't have time to fix your scores/profile so it is better to keep them as reasonable as possible.

So true. Last month we had to get a new compressor for our HVAC 5 ton unit. After shopping hard total cost was $1600. Best part was we have 0% on a card for many months while we pay this off.

Re: What is your goal? Why play the FICO game?

sarge12 — Tue, 30 Jul 2019 17:35:50 GMT

@Anonymous wrote:
@Anonymous wrote:
You certainly save some money when you can get approved for the best rates. I also feel it is necessary(for me) to have high enough limits where I can go out and make a large purchase and not have to worry about the reporting balances killing my scores.

You never know when you may need credit immediately. My car could die tomorrow and I would have to go get one. Sudden funeral expenses? Need a new roof before the next rain hits? Applying for a new job and they run a credit check? In these scenarios, you probably won't have time to fix your scores/profile so it is better to keep them as reasonable as possible.
So true. Last month we had to get a new compressor for our HVAC 5 ton unit. After shopping hard total cost was $1600. Best part was we have 0% on a card for many months while we pay this off.

Even though it has been quite some time since I was a HVAC technician, unless things have changed drastcally, there is no way I would ever advise changing a compressor. I would go for changing the condensing unit at the minimum. A replacement compressor carried 1 year warranty where the unit carried 5 year warranty. I am not real familiar with the newer refrigerants, but a burnt out compressor caused R-22 refrigerant to become acidic when heated by the burnt windings. You can neutralize the acid with a suction line filter drier, but back then the cost of a new condensing unit was only about 1.5 times the cost of the compressor. Being disabled I can't even repair my own unit now. When the compressor goes, I plan to change the entire heat pump...both condensor and evaporator. I dread what will likely be a very expensive undertaking. I think it has been about ten years of use, so it is likely to need replacement in the fairly near future. I, myself installed the last one, but that is now impossible.

Re: What is your goal? Why play the FICO game?

Anonymous — Tue, 30 Jul 2019 19:46:31 GMT

My scores are already considered "Excellent" so I am not too worried about improving my scores as much as I am focusing on maintaining them. At this point the only thing I can do to improve my scores is age my accounts and wait for inquiries to drop off. I am planning on purchasing a house in a little over 2 years so that should be a perfect amount of time to sit back, relax, and not apply for any new credit.