After reading the board for the better part of a year looking for best credit cards to fit my lifestyle, I also took the opportunity to get myself financially stable as I finish grad school and my loans come off deferment. So I paid off my car loan and my credit cards. Also, I sold my house back in March so I no longer have a mortgage. After all that my scores took a hit and are now sitting back in the mid 750's. After some thinking I want to take on the challenge to get my score to 800. I gave never reached that high, 770's was the highest I have gone. So my question is for those who are at 800 or want to get there, what's your best advice? Thanks for any input!!!
@irunfromcredit wrote:After reading the board for the better part of a year looking for best credit cards to fit my lifestyle, I also took the opportunity to get myself financially stable as I finish grad school and my loans come off deferment. So I paid off my car loan and my credit cards. Also, I sold my house back in March so I no longer have a mortgage. After all that my scores took a hit and are now sitting back in the mid 750's. After some thinking I want to take on the challenge to get my score to 800. I gave never reached that high, 770's was the highest I have gone. So my question is for those who are at 800 or want to get there, what's your best advice? Thanks for any input!!!
The reason your scores went down is that FICO has penalized you for your lack of present "credit mix". But you're in great shape, because you're debt free.
Thing is, FICO doesn't want us to be debt-free, because banks don't make money off of debt-free people.
My advice would be to forget about the 800 scores; you'll get there anyway, just with the passage of time, as everything ages.
But if you want to get your scores up to 800 quickly, the only way unfortunately is to saddle yourself with debt once again;
Fortunately there is a kind of innocuous way to borrow that gets you a bunch of points in about 2 months and really doesn't saddle you with anything. If you really want to play, here it is:
1. go to Alliant Credit Union and open a savings account with at least $500
2. take out a 'share secured' loan, secured by the savings account, for $500, with a 48-month payout (no credit inquiry, very low interest), and decline autopay
3. let the loan report one month, then pay it down to a balance below $50
4. then pay $1 a month or so for the next 48 months
The next time it reports, with around a 9% balance, you'll get some points. In my case it got me around 25 points, but everyone's credit profile is different in terms of the number of points.
@SouthJamaica wrote:
@irunfromcredit wrote:After reading the board for the better part of a year looking for best credit cards to fit my lifestyle, I also took the opportunity to get myself financially stable as I finish grad school and my loans come off deferment. So I paid off my car loan and my credit cards. Also, I sold my house back in March so I no longer have a mortgage. After all that my scores took a hit and are now sitting back in the mid 750's. After some thinking I want to take on the challenge to get my score to 800. I gave never reached that high, 770's was the highest I have gone. So my question is for those who are at 800 or want to get there, what's your best advice? Thanks for any input!!!
The reason your scores went down is that FICO has penalized you for your lack of present "credit mix". But you're in great shape, because you're debt free.
Thing is, FICO doesn't want us to be debt-free, because banks don't make money off of debt-free people.
My advice would be to forget about the 800 scores; you'll get there anyway, just with the passage of time, as everything ages.
But if you want to get your scores up to 800 quickly, the only way unfortunately is to saddle yourself with debt once again;
Fortunately there is a kind of innocuous way to borrow that gets you a bunch of points in about 2 months and really doesn't saddle you with anything. If you really want to play, here it is:
1. go to Alliant Credit Union and open a savings account with at least $500
2. take out a 'share secured' loan, secured by the savings account, for $500, with a 48-month payout (no credit inquiry, very low interest), and decline autopay
3. let the loan report one month, then pay it down to a balance below $50
4. then pay $1 a month or so for the next 48 months
The next time it reports, with around a 9% balance, you'll get some points. In my case it got me around 25 points, but everyone's credit profile is different in terms of the number of points.
Thanks for your reply! I'm not in a huge hurry to get to 800, but I eventually want to purchase another home once my son is off to college (5 years). So I my longish term goal is to get my score as high as possible to get the best rate.
Full disclosure, my student loans are pretty hefty and I started throwing all my money from what spike have been my mortgage and car payment towards that. So I as hoping that my school loan qualifies as my installment loan?
do do you think I should not worry too much and jus continue how I'm going and the scores will get there???
@Anonymous wrote:Here's my best advice: keep it simple!
Let me offer a strange analogy. Remember when you were an adolescent and you would get pimples? You'd go into the bathroom and do what you could to make yourself presentable (or at least what you hoped was presentable). You did the best you could, and you called it good. But before long, you were back messing with it. And not only did you not make it look better the second time around, all of your poking and squeezing actually made it worse. So you left it alone again...for about 15 minutes. Then you were back for another round. You knew that you should just let it heal. And you told yourself that's what you were going to do. But you just couldn't leave well enough alone.
That's how many people approach their credit. They start with a few reasonable steps. A few credit cards that they use and pay off. One or two installment loans that they service as they should. They know that they should just let it age, that that would be the best thing for their credit. They say they're going into the "garden" and announce to the community how long they will be there. But like a junior high kid with a big zit on his nose, they just can't stop. And a week later they're apping for three more credit cards. It almost always hurts their credit -- or at least slows down any improvement. But they can't seem to stop. Don't be like them.
You should have three or four credit cards that make sense to you. Use them responsibly and pay them off every month. If you want to optimize your profile, pay all of them off but one before their statement closes, but in reality, this will only improve your score a little for that month -- you won't get any long term benefit from it.
Once your student loans come out of deferment, you'll have an installment loan again. So your mix will be fine. Work on paying that down.
Other than that, just be responsible with your money. Don't buy more house, car, or stuff than you can easily afford. Stay on top of your bills, and you'll get where you want to go.
My wife has three credit cards: a Visa she uses and pays every month, an Amex (that's actually mine -- she's a authroized user and I always pay it before the statement closes) that we use for groceries because of the rewards, and a Macy's card that she uses maybe once a year and doesn't really need. She has a closed installment loan (a mortgage we paid off a few years ago), and nothing else. No car loans, no student loans, nothing. But she has a decent age of accounts, and most importantly no derogs. Her scores are in the low 800s.
Yes that is very wise advice. That's kind of what I have been doing for years. I never pays attention to my credit. Well when I purchased my home and my car and last year when I picked up some cc's. I guess I wanted to challenge myself and see if I can get to 800. Lol. And to your point, I paid off everything to get back to keeping my finances simple. And as for selling my home, I was at a point where I didn't need all the space and wanted to downsize.
I will keep doing what I'm doing and let things run its course.
@irunfromcredit wrote:After reading the board for the better part of a year looking for best credit cards to fit my lifestyle, I also took the opportunity to get myself financially stable as I finish grad school and my loans come off deferment. So I paid off my car loan and my credit cards. Also, I sold my house back in March so I no longer have a mortgage. After all that my scores took a hit and are now sitting back in the mid 750's. After some thinking I want to take on the challenge to get my score to 800. I gave never reached that high, 770's was the highest I have gone. So my question is for those who are at 800 or want to get there, what's your best advice? Thanks for any input!!!
It sounds like you may have a number of new cards? Can you list out all the cards, the month and year they were opened, credit limit and latest statement balance? Do the same for student loans.
@irunfromcredit wrote:
@SouthJamaica wrote:
@irunfromcredit wrote:After reading the board for the better part of a year looking for best credit cards to fit my lifestyle, I also took the opportunity to get myself financially stable as I finish grad school and my loans come off deferment. So I paid off my car loan and my credit cards. Also, I sold my house back in March so I no longer have a mortgage. After all that my scores took a hit and are now sitting back in the mid 750's. After some thinking I want to take on the challenge to get my score to 800. I gave never reached that high, 770's was the highest I have gone. So my question is for those who are at 800 or want to get there, what's your best advice? Thanks for any input!!!
The reason your scores went down is that FICO has penalized you for your lack of present "credit mix". But you're in great shape, because you're debt free.
Thing is, FICO doesn't want us to be debt-free, because banks don't make money off of debt-free people.
My advice would be to forget about the 800 scores; you'll get there anyway, just with the passage of time, as everything ages.
But if you want to get your scores up to 800 quickly, the only way unfortunately is to saddle yourself with debt once again;
Fortunately there is a kind of innocuous way to borrow that gets you a bunch of points in about 2 months and really doesn't saddle you with anything. If you really want to play, here it is:
1. go to Alliant Credit Union and open a savings account with at least $500
2. take out a 'share secured' loan, secured by the savings account, for $500, with a 48-month payout (no credit inquiry, very low interest), and decline autopay
3. let the loan report one month, then pay it down to a balance below $50
4. then pay $1 a month or so for the next 48 months
The next time it reports, with around a 9% balance, you'll get some points. In my case it got me around 25 points, but everyone's credit profile is different in terms of the number of points.
Thanks for your reply! I'm not in a huge hurry to get to 800, but I eventually want to purchase another home once my son is off to college (5 years). So I my longish term goal is to get my score as high as possible to get the best rate.
Full disclosure, my student loans are pretty hefty and I started throwing all my money from what spike have been my mortgage and car payment towards that. So I as hoping that my school loan qualifies as my installment loan?
do do you think I should not worry too much and jus continue how I'm going and the scores will get there???
I didn't realize you still had the student loans. Yes they can qualify as your installment loans. As you keep paying those down, your scores will go up up up.
Yes I think you should not worry too much and just continue the way you're going and the scores will get there.
BTW from a practical point of view, your scores in the 750's are just as good as 800's; it's just bragging rights we're talking about, because with scores in the 750's you can get the best rates.