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SVTPerformance's Chain of Restaurants
Road Side Pub
Credit Score / Report Gurus
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<blockquote data-quote="Silver Talon" data-source="post: 16320627" data-attributes="member: 192437"><p>I've been in finance for many years now, and do quite a bit of credit counseling with our customers. Its funny and sad the misconception of how credit works, and how your score is generated. Here's a couple quick pointers.</p><p></p><p>Credit card utilization under 30%. I say 30% for a few reasons. It means there are probably several cards in use, which means more potential points added per month, and 30% doesn't reach the point where lenders think you're living off your credit cards to survive IE: you have disposable income. Disposable income = good credit scores and a good chance you'll spend more at some point.</p><p></p><p>Income has 0 to do with your score. Income to debt will effect approval chances for new debt and that's about it.</p><p></p><p>Early payments don't help your score. They only save you money.</p><p></p><p>Just like your 401k plan and investments, your credit/debt should be diversified for the best results possible. If you have everything paid off, and no car or house payments, you're not generating score every month. Your score goes stagnant. So in the case of the OP, with most everything paid off, and then a bump occurs, there is no buffer of long payment history, to drown out the bump. Recently had some a couple with 740ish scores come through. Both had 6 or more lates on different accounts over the past 24 months, that were caught back up the next month. But had good CC utilization, 2 auto loans, house loan, and home equity and something for an atv loan. Because they are using their credit in many ways, their scores are still strong, and rates are good due to score. Without a diversified credit bureau, there is no diluting a late or missed payment.</p><p></p><p>I personally had to take over my dad's mortgage when he passed. Picked up a fair amount of debt by having to do that, and since my house has been paid off for 5+ years, my score shot up pretty quickly after doing it, even with more debt in my name.</p><p></p><p>Don't lose fact that your dealing with the banking industry. Your credit score isn't there for you to save money on a rate. Its a gauge for them to rate their potential income from you. The credit scores are their way of diversifying their portfolio. 800 up scores is like the money market. Your ROI (return on investment) will always be low, due to bottom of the barrel rates. 700's are your safe 401k markets. Going to grow and make money due to inflation, and a safe year over year bet. 600's are your aggressive 401k plans. You might lose some here and there, but the ROI is high. 500s are the slots down at the casino. Some days you'll get lucky and cash up big, other days it will cost you a ton to even show up.</p><p></p><p>Long story short, spend and borrow money, but do it as smart as you can.</p></blockquote><p></p>
[QUOTE="Silver Talon, post: 16320627, member: 192437"] I've been in finance for many years now, and do quite a bit of credit counseling with our customers. Its funny and sad the misconception of how credit works, and how your score is generated. Here's a couple quick pointers. Credit card utilization under 30%. I say 30% for a few reasons. It means there are probably several cards in use, which means more potential points added per month, and 30% doesn't reach the point where lenders think you're living off your credit cards to survive IE: you have disposable income. Disposable income = good credit scores and a good chance you'll spend more at some point. Income has 0 to do with your score. Income to debt will effect approval chances for new debt and that's about it. Early payments don't help your score. They only save you money. Just like your 401k plan and investments, your credit/debt should be diversified for the best results possible. If you have everything paid off, and no car or house payments, you're not generating score every month. Your score goes stagnant. So in the case of the OP, with most everything paid off, and then a bump occurs, there is no buffer of long payment history, to drown out the bump. Recently had some a couple with 740ish scores come through. Both had 6 or more lates on different accounts over the past 24 months, that were caught back up the next month. But had good CC utilization, 2 auto loans, house loan, and home equity and something for an atv loan. Because they are using their credit in many ways, their scores are still strong, and rates are good due to score. Without a diversified credit bureau, there is no diluting a late or missed payment. I personally had to take over my dad's mortgage when he passed. Picked up a fair amount of debt by having to do that, and since my house has been paid off for 5+ years, my score shot up pretty quickly after doing it, even with more debt in my name. Don't lose fact that your dealing with the banking industry. Your credit score isn't there for you to save money on a rate. Its a gauge for them to rate their potential income from you. The credit scores are their way of diversifying their portfolio. 800 up scores is like the money market. Your ROI (return on investment) will always be low, due to bottom of the barrel rates. 700's are your safe 401k markets. Going to grow and make money due to inflation, and a safe year over year bet. 600's are your aggressive 401k plans. You might lose some here and there, but the ROI is high. 500s are the slots down at the casino. Some days you'll get lucky and cash up big, other days it will cost you a ton to even show up. Long story short, spend and borrow money, but do it as smart as you can. [/QUOTE]
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