It drives me nuts.

[Anonymous]

I paid off my car, and my score dropped. Yes, I know, a score is not a measure of financial success. It's a measure of how much I interact with banks and how my payment history is.

The thing is that I pay things off quickly. I bought the car in July and paid it off in January. Before that I bought a car in january and paid it off in December.

I wish FICO had a scoring model that worked for me.

[Gmood1]

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wrote:
I paid off my car, and my score dropped. Yes, I know, a score is not a measure of financial success. It's a measure of how much I interact with banks and how my payment history is.

The thing is that I pay things off quickly. I bought the car in July and paid it off in January. Before that I bought a car in january and paid it off in December.

I wish FICO had a scoring model that worked for me.

---

Easy way around that is a shared secured loan. Because buying and paying vehicles off in 6 to 12 months isn't doing your file any good.

Find a SSL through a CU that gives you 36 to 60 months to pay the loan. Leave it alone and DO NOT PAY OFF EARLY. You have to show history. There's only one way to do that. Pay over time.

[Kree]

A thought. 

A cheap auto equity loan is 2.49% apr.   DCU offers 5.12% interest for the first 1,000.  Discover offers a CD at 2.35%

You could take out money on your vehicle. Stick it in savings and a CD and end up making more than the interest cost.

[Anonymous]

I pay off early so I don't pay interest to the banks. Therefore, the SSL suggested won't work.

In 6 months I'll be unscorable. Perhaps it would be best for me to just save the money up over six months or a year the next time I want to buy a car.

[Anonymous]

The Share Secured Loan Technique is a strategy that involves paying almost no interest to the lender at all (typically $1-2 each year).  You can read about it here -- just the first couple posts.

The lender we used to recommend is Alliant.  They no longer offer SS loans, but we hope to find some good alternatives by April. 

[Anonymous]

PS.  If you will be unscorable in six months, that must mean that you have no credit cards.  Any particular reason for that?  Most credit cards don't cost a person anything to use, either in annual fees or in interest (assuming one pays one's CC bill in full, which is easy to do).

[Anonymous]

You are correct. I don't have any credit cards. I haven't ever had any use for them, and know my limits. If I had a Home Depot card, I'd buy out the store and then have payments for eons to pay for stuff I didn't need. If I had a Visa, I'd buy all sorts of guns and ammo at the gun shop, and pay a bizillion dollars in interest.

So, I primarily live a cash life. The only items on my credit file are a few car loans and two paid off mortgages. Therefore, I have a crappy score.

The funny thing is that I am truly financially sound. The mortgage is in my wife's name, but reality is that it is a marital obligation. We save close to 20% of our income for retirement and will have the mortgage paid off in a few short years (under ten years total on a 30 year note). We have a year's worth of mortgage payments as an emergency fund, also. Our cars are paid for, also.

I could literally write a check and buy a new toyota out of my emergency fund, yet my credit score is **bleep**. Does that make sense?

[Anonymous]

We've come up with solutions before for people with credit addiction -- people who have a realistic worry about buying a lot of stuff they don't need if they have CCs.

Now the interesting thing to me is that you are able to have a lot of cash coming into your bank accounts without spending it (you are saving a huge chunk of your paychecks each month into retirement) so that may be a place to look.  In other words, try to figure out what safeguards you have in place that appear to protect you from spending all your cash, and why they work, and then see if they can be adapted to CCs.

The first thing that jumps to mind is family or friends.  The language you use:

"... [I] know my limits. If I had a Home Depot card, I'd buy out the store and then have payments for eons to pay for stuff I didn't need. If I had a Visa, I'd buy all sorts of guns and ammo at the gun shop...."

is all "I" language.  Which suggests that you may feel your wife is not like that.  If so, you could decide to do the following:

*  Get a card in your name.

*  Lower the credit limit to $300.

*  Set the alerts so that it emails your wife if the balance goes over $20.

*  Give the actual physical card to your wife when it arrives and ask her to create a username and password for it but not disclose those to you, and also to hide the physical card from you.

She could set up a recurring charge on the card (Netflix, electric bill, cell phone bill, whatever) and set up autopay and you are done.  A credit card in your name that you'll never use and which will generate a good credit history with a very low utilization.  (Make sure that the credit limit is 12 times the amount of the recurring charge.)

[Anonymous]

Thanks for that idea. Looking at my particular situation, I don't see any use that Mrs. AT7 and I would have for a decent credit score. Within a few short years, our house will be paid off. We own our cars outright, and have saved enough to buy more cars if we needed to. Literally, I just don't know sheet about credit. What positives might a decent score bring to our lives?

On edit: when we got married, Mrs. AT7 brought $40k of card, auto, and student debt into the marriage. We paid it off in 11 months. However, she owed $40k on a $55k income. She was in deep sheets. We did the Ramsey thing and paid it off.

[Anonymous]

Another option is to get a secured card with a $300 credit limit, no way to go overboard spending with that.