My Financial Life. How Would You Improve It?

[Anonymous]

I've been looking at the Fico forums on myfico.com for a while and have always enjoyed the discussions whether it be personal finance, credit cards, credit, loans, etc. I am 34 years old, soon to turn 35 and I just wanted to share my financial life and get some questions answered. Now that I am older in life, I want to take my finances seriously and save up more money and be free financially.

- Salary is $51,424 gross and my position tops out at $64,697, but to get there it will take a lot of years. (It is a federal governent position, so it takes forever). I'll be at  $53,083 in September 2017 and $54,742 September 2018. Hoping for a promotion to move quicker to the $70,000, $80,000 salary range.

- Net salary is $1,190 bi-weekly and this does not include over time. Over time is hit or miss. We can get 18 hours one week and not have it again for another week, but we get it, and I can mak as much as $1,650 to $1,700.

- Other than a car loan that I will finish in 2020 (perhaps earlier with over time pay), I do not have any debt. No student loans, no credit cards, etc. My monthly payments are $450. My car insurance is $314 for 6 months and I pay that in full so I do not have to worry about monthly payments.

- I only have $1,027 in my savings account. Grrrr! I had $5,500 last year but had some car problems (old car) and other expenses beyond my control. More about savings later on.

- In 7 years with my agency, I have nearly $40,000 in my TSP account, which is the equivalen of 401K for federal employees. I contribute 19% of my income to the TSP and I get a 5% match from the agency, so it's $465 bi-weekly.

- I have 4 credit cards: Citi Diamond Preferred since 2005 and I have $10,000 credit limit, Capital One Platinum since 2008 and that one only has $2,000 credit limit. Capital One Quicksilver 1.5% and I have $11,000 credit limit on that card and finally I recently was approved for a Citi Double Cash 2% back a few days ago with a starting credit line of $3,000. I am hoping to use the Citi Double Cash as my main card and hopefully get the credit line increased as time goes by. Except for the Capital One Platinum and it's $39 annual fee, none of the other cards have any fees.

- My scores per Credit Karma: 751 TransUnion and 745 Equifax.  Fico score per Citi website is 729 as of March 28. My score per Credi Wise (part of Capital One) is 751.

- When I was in my 20's, I missed about 6 payments on one of my Discover Cards and it was reported to collections, and I payed tha off but Discover closed my account. When I started paying my student loans, which were a total of $6,000, I missed payments for a few months. These two things are on my credit history.

My questions are:

1. Where is the official website to get your fico scores and credit reports? Where would I get the most accurate and true score from?

2. Which is the most important score? Equifax, TransUnion or Experian, or do all 3 matter?

3. Who do I contact to get my student loan missed payments and Discover Card missed payments off my records? This definitely affecs my history since it went to deliquency. 

4. Any tips on how to get my scores up to 770, 780, 790 range?

5. Are sites like Credit Karma accurate? Which site would you use to get an accurate score?

6. Are the four credit cards I have enough? These 4 cards have a combined credi line of $26,000. I only use the two cash back cards as my main cards to buy everything so I can get the rewards and I pay them off in full. I use the other two cards at least 3 times every 3 monhs so they can stay active and pay them off in full.

Now that I am older and wiser, I'm trying to save up more money and stop wasting my money. After apartment, car payment, bills (cable, cell, utiilites, etc, I am left with nearly $750 and I am taking $300 of that and putting it straight to savings and the other $450 for food and entertainment. Whatever I make in over time I put it directly into my savings, as it never existed. This pay period I will make about $450 to $500 in over time so that will go to savings. Also plan to raise my TSP (401K) contribution by 1% in September when I get my raise, so it will be a total of 20% from my paycheck that I will be contributing, plus a 5% agency matching.

My goals for the next 3 to 5 years is to save as much money as I can, increase saving by $400 to $500 a month once I finish my car loan in 2020 and finally to buy a home. I rent now because I do not plan on staying in my current city long term but the next city I move to will be my long term destination. If I stay here long term I would be stuck making the same money with no chance of promotion, so I have to move.

Thank you for reading my long post.

[Anonymous]

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@Anonymous wrote:

I've been looking at the Fico forums on myfico.com for a while and have always enjoyed the discussions whether it be personal finance, credit cards, credit, loans, etc. I am 34 years old, soon to turn 35 and I just wanted to share my financial life and get some questions answered. Now that I am older in life, I want to take my finances seriously and save up more money and be free financially.

- Salary is $51,424 gross and my position tops out at $64,697, but to get there it will take a lot of years. (It is a federal governent position, so it takes forever). I'll be at  $53,083 in September 2017 and $54,742 September 2018. Hoping for a promotion to move quicker to the $70,000, $80,000 salary range.

- Net salary is $1,190 bi-weekly and this does not include over time. Over time is hit or miss. We can get 18 hours one week and not have it again for another week, but we get it, and I can mak as much as $1,650 to $1,700.

- Other than a car loan that I will finish in 2020 (perhaps earlier with over time pay), I do not have any debt. No student loans, no credit cards, etc. My monthly payments are $450. My car insurance is $314 for 6 months and I pay that in full so I do not have to worry about monthly payments.

- I only have $1,027 in my savings account. Grrrr! I had $5,500 last year but had some car problems (old car) and other expenses beyond my control. More about savings later on.

- In 7 years with my agency, I have nearly $40,000 in my TSP account, which is the equivalen of 401K for federal employees. I contribute 19% of my income to the TSP and I get a 5% match from the agency, so it's $465 bi-weekly.

- I have 4 credit cards: Citi Diamond Preferred since 2005 and I have $10,000 credit limit, Capital One Platinum since 2008 and that one only has $2,000 credit limit. Capital One Quicksilver 1.5% and I have $11,000 credit limit on that card and finally I recently was approved for a Citi Double Cash 2% back a few days ago with a starting credit line of $3,000. I am hoping to use the Citi Double Cash as my main card and hopefully get the credit line increased as time goes by. Except for the Capital One Platinum and it's $39 annual fee, none of the other cards have any fees.

- My scores per Credit Karma: 751 TransUnion and 745 Equifax.  Fico score per Citi website is 729 as of March 28. My score per Credi Wise (part of Capital One) is 751.

- When I was in my 20's, I missed about 6 payments on one of my Discover Cards and it was reported to collections, and I payed tha off but Discover closed my account. When I started paying my student loans, which were a total of $6,000, I missed payments for a few months. These two things are on my credit history.

My questions are:

1. Where is the official website to get your fico scores and credit reports? Where would I get the most accurate and true score from?

2. Which is the most important score? Equifax, TransUnion or Experian, or do all 3 matter?

3. Who do I contact to get my student loan missed payments and Discover Card missed payments off my records? This definitely affecs my history since it went to deliquency. 

4. Any tips on how to get my scores up to 770, 780, 790 range?

5. Are sites like Credit Karma accurate? Which site would you use to get an accurate score?

6. Are the four credit cards I have enough? These 4 cards have a combined credi line of $26,000. I only use the two cash back cards as my main cards to buy everything so I can get the rewards and I pay them off in full. I use the other two cards at least 3 times every 3 monhs so they can stay active and pay them off in full.

Now that I am older and wiser, I'm trying to save up more money and stop wasting my money. After apartment, car payment, bills (cable, cell, utiilites, etc, I am left with nearly $750 and I am taking $300 of that and putting it straight to savings and the other $450 for food and entertainment. Whatever I make in over time I put it directly into my savings, as it never existed. This pay period I will make about $450 to $500 in over time so that will go to savings. Also plan to raise my TSP (401K) contribution by 1% in September when I get my raise, so it will be a total of 20% from my paycheck that I will be contributing, plus a 5% agency matching.

My goals for the next 3 to 5 years is to save as much money as I can, increase saving by $400 to $500 a month once I finish my car loan in 2020 and finally to buy a home. I rent now because I do not plan on staying in my current city long term but the next city I move to will be my long term destination. If I stay here long term I would be stuck making the same money with no chance of promotion, so I have to move.

Thank you for reading my long post.

---

Hi, punkrocker! Welcome to the forum.  I'll answer the ones I know:

1. You can get a free Experian FICO 8 at experian.com. I would start there. You can also do a trial subscription at Credit Check Total for $1.00 I believe, they give you all three FICO 8's. MyFICO is also all three FICO 8's plus other FICO versions too. It costs more, but that's what I use.

2. All three matter. Different lenders pull from different bureaus, so they're all important.

3. Go straight to your lender/loan servicer depending on the type of loan it is, and Discover. The credit bureaus only report what is reported to them.

5. Credit Karma scores are what is known as FAKOs. They aren't true FICO scores.

6. The four cards you have are enough to build your credit profile and scores. Your auto loan (and student loan if you still have a balance) is giving you installment loans for credit mix. I think credit mix is 10-15% of your scores so having a loan is important.

Other advice, definitely throw more money, if you can, into a retirement account. IRA, 403, etc. Exactly 13 years ago (when I was 34 ironically), I switched employers and cashed out a 403B instead of doing a rollover. Now I regret it. Gotta get that money in there so it has time to grow!

Glad you're on here! I know you will get many responses and advice and ideas far above and beyond mine. 

[Anonymous]

1. Where is the official website to get your fico scores and credit reports? Where would I get the most accurate and true score from?

There are sites that others recommend, but MyFICO is the real "source" for your true scores. Worth the monthly cost, IMHO.

2. Which is the most important score? Equifax, TransUnion or Experian, or do all 3 matter?

The easy answer is that they all matter. The longer answer is that it really depends on where you are and what your goals are. For example, TU is almost exclusively used for car credit here in California. It's also important when establishing a relationship with NFCU. Sounds like the last thing you need is more credit, so treat them all equally for now. When you get to your final destination, ask your mortgage company which scores they use (probably all, but worth a shot).

3. Who do I contact to get my student loan missed payments and Discover Card missed payments off my records? This definitely affecs my history since it went to deliquency.

There are experts here on PFD and fixing delinquencies. I've never had one (knock on wood!) but my wife used Lexington Law. She's had success but I imagine most here would recommend against using them. She likes the easy button, so she went with it instead of doing the legwork. For legwork questions, someone else will chime in.

4. Any tips on how to get my scores up to 770, 780, 790 range?

You're already on your way. Without those delinquencies, you'd be there already. Keep paying your bills. Make sure to have at least one installment loan open at all times, preferably with under 39% balance remaining. Utilization can fluctuate from month to month, but the ideal scenario is zero balances on all but one card with the final card having under 9%. Utilization has no memory, so it can be high one month, low the next.

5. Are sites like Credit Karma accurate? Which site would you use to get an accurate score?

No. AnnualCreditReport gives you the accurate report once a year. MyFICO is, IMHO, the best. Credit Karma and similar sites use Vantage scoring, AKA "FAKO", which is used by essentially nobody. There are other scores such as Experian's NextGen2 but those are just as fake despite their official labels. FICO is the only way to go and MyFICO is the best way to find it.

6. Are the four credit cards I have enough? These 4 cards have a combined credi line of $26,000. I only use the two cash back cards as my main cards to buy everything so I can get the rewards and I pay them off in full. I use the other two cards at least 3 times every 3 monhs so they can stay active and pay them off in full.

4 is enough. Many here play the game and accumulate huge credit limits and many cards. For your goals, four is no better or worse than fourteen except as it pertains to risk. In other words, getting more credit cards could spook some lenders who feel you're overextended. Your score is a determination of risk, so having three or four quality cards paid as described above demonstrates low risk. It's very possible for someone to have three credit cards with low limits paid perfectly for a decade to score over 800.

Last bit of advice: the only thing missing in your portfolio other than a mortgage would be a relationship with a credit union. You may have one and just don't have credit with them. That's fine, but it would behoove you to build on the credit relationship with your current credit union or by joining one. NFCU is beloved here. I also like DCU. Some love PenFed. There are plenty of great ones out there. Building now could be very beneficial for car and/or mortgage in the future.

[Appleman]

You are in a great position now.

Advice for you.

Contact Cap1 and get the AF removed. You can do this via chat, they should be able to get you into a no AF product.

Join PenFed CU. It will cost you 1 EQ HP but allow you to apply for other products without additional pulls.

I recommend you apply for one of their credit cards.

A PLOC for $5,000 (gives you quick access to cash if you need it)

Also see if they will refinance your car (unless your rate is better than what they can offer you).

I have found their CSRs to be very helpful so you could do this with a phone call.

If you go this route go ahead and get copies in PDF form of your last 2 pay-stubs, this will possibly speed things up.

Remember, they will be looking at your Gross pay (pre-tax). 

I agree with Credit Check Total being the least expensive option to get all 3 FICO 08 scores. Just make sure to cancel in the first 7 days and you are only billed the $1. 

[Appleman]

Additional advice:

Get yourself a budget program. My favorite is YNAB. You Need a Budget.

This is a great way to keep heading the correct direction.

Before budgeting I would look at my account and make decisions based upon the balance. With budgeting, I have given every dollar a job as it comes into my account.

I have the Christmas Fund, Taxes and even Major Repair fund. Once you begin budgeting you will be amazed how quickly you account balances will grow.

Honestly wish I would have learned the lesson when I was young.