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Hi all!
New member here who stumbled upon this forum researching the Marriott Rewards Credit Card. I didn't realize there was a whole community dedicated to getting the best FICO scores.
So I have a pretty good FICO score, 803 and 800 last I checked. I made the (one) smart realization when I was in college that if I get a credit card early in life, and just make every payment in full, then my credit score would be awesome! I read that advice while browsing some forum about finance.
Anyway, problem is I have no use for my credit score. I have no debt and no future plans on taking on any loans. I just got approved for the Marriott card for 28k, so my utilization is now around 80k. What other benefits are there for having a high score? Seems like unless I'm taking on a loan, there's really no benefit.
I noticed in my credit report that I got inquiries from cable/internet companies when I started service, so your credit score could partially determine what kinds of deals they offer you. And someone in another thread mentioned they didn't have to pay a deposit for a lease because they had a high credit score. Credit checks can also be a part of apartment leases and even some job applications.
The main benefit is new credit and getting the best terms for new credit. Credit isn't just loans. Loans are only one type of credit. Your credit is used for other things as well such as insurance, employment, renting, utilities, etc but having a 800+ FICO 8 may not be as important for such things. FICO 8 isn't the only score used. Additionally, things like insurance, rentals and employment are going to be looking differently at your credit reports than a creditor looking to extend you credit.
However, it's never just about score itself. Your credit profile (all that data in a report) itself matters as well.
@Anonymous wrote:So I have a pretty good FICO score, 803 and 800 last I checked.
You don't have just one FICO score. For one thing, there are many FICO models used by creditors. See also the Understanding FICO Scoring subforum and its stickies. For most models you have a score with each of the 3 major CRA's. Make sure you're considering all the CRA's. When referring to scores make sure you always reference the specific model used. Also consider the relevance of a CRA/model combo to a given creditor/product or whoever will be looking at the score and report. The score that matters is the one being used in whatever decision is being made and everyone does not use the FICO models. Those that do use FICO don't all use the same FICO model.
@Anonymous wrote:I made the (one) smart realization when I was in college that if I get a credit card early in life, and just make every payment in full, then my credit score would be awesome!
Establish credit early and always pay in full can be handy guidelines but they're oversimplifying the matter. You probably won't go wrong with just that advice but there's much more to it.
Payment History is the biggest factor but it's more a matter of whether your payments are on time. You definitely want to ensure that Payment History is 100% positive and that there are no derogs on your report. Score impact is not necesarily about paying in full but revolving utilization which falls under Amounts Owed. Carrying a balance can generally make having low revolving utilization difficult but I'm carrying on a couple of 0% offers and I'm at about 3%. Paying in full doesn't necessarily mean that one has low revolving utilization. You just have to keep an eye on your revolving utilization versus assuming it's all about paying in fully versus carrying.
All these factors matter for scoring:
http://www.myfico.com/crediteducation/whatsinyourscore.aspx
@Anonymous wrote:Anyway, problem is I have no use for my credit score.
How is that a problem? Don't just look for uses. Let your needs/wants determine what products you apply for. Don't just consider the short term but long term as well. Do you never intend to buy a home? A car?
Also consider that your creditors will routinely SP you and scores and reports will be used to assess the shape your credit profile is in. Those SP's will determine if you qualify for CLI's, APR's reductions,etc or if the creditor feels that they need to take adverse action. Don't assume that once approved your credit doesn't matter for that account.
@Anonymous wrote:I have no debt and no future plans on taking on any loans. I just got approved for the Marriott card for 28k, so my utilization is now around 80k.
While you do have to take on debt with installments you don't have to take on debt to build credit with credit cards. Don't just fixate on your score and learn to assess your reports. Even if you don't anticipate a near term use you may want to work on your profile as how thick and how aged your credit profile is will have an impact on how it is assessed.
It also sounds like you're conflating utilization and limits. Revolving utilization = balance(s) / limit(s).
Don't overlook the stickies and other discussions as resources as well.
You can utilize a good score by qualifying for the best credit cards as well. I use my CC like a debit card and just pay off the balance. If you're gonna make a purchase, might as well get cash back and other rewards for free basically.
@Anonymous wrote:Hi all!
New member here who stumbled upon this forum researching the Marriott Rewards Credit Card. I didn't realize there was a whole community dedicated to getting the best FICO scores.
So I have a pretty good FICO score, 803 and 800 last I checked. I made the (one) smart realization when I was in college that if I get a credit card early in life, and just make every payment in full, then my credit score would be awesome! I read that advice while browsing some forum about finance.
Anyway, problem is I have no use for my credit score. I have no debt and no future plans on taking on any loans. I just got approved for the Marriott card for 28k, so my utilization is now around 80k. What other benefits are there for having a high score? Seems like unless I'm taking on a loan, there's really no benefit.
A majority of insurance companies use credit based insurance scores (CBIS) as a major factor in setting premiums. If you have mediocre credit scores you will pay an increased premium. If you have poor scores, rates can be more than double. Note the CBIS scores are not any of the various flavors of Fico discussed here. The scores typically are provided to insurance companies by LexisNexis. Transunion and Fico also offer such scores to insurance agencies but they are minor players compared to LN.
So outside of loans, if you pay insurance on a car, primary home or lake home, scores still matter. Down the road you may take out a mortgage and then, as you mention, Fico score comes directly into play.
Length of credit history and average age of accounts play an important role in credit scores. Thus, you want to pick up a critical mass of CCs early on and let them age. You do need to use the cards at least once every 6 months to avoid potential adverse action (AA) by the card issuer. If you get a car but never use it the account may be closed. A closed account typically cannot be re-opened.
In your case your cards should all be no annual fee (no AF) as they would rarely be used so limited opportunity for cash back rewards.
P.S. I suspect you are referring to your aggregate credit limit being around $80k, not utilization.
Total CL: $321.7k | UTL: 2% | AAoA: 7.0yrs | Baddies: 0 | Other: Lease, Loan, *No Mortgage, All Inq's from Jun '20 Car Shopping |