Are you in the green? I'm not because I never used credit yet, all debit. Will soon though...mine is 427. Har Har.
That raises the question... Is there a minimum score? Does it start at 0, 200, or 400. Perhaps 425...
woah. I have a funny/interesting story actually. A woman came into the BMW dealership I work at to lease a car. So we do the credit application and it turns out she has a credit score of 390. yes, 390! She makes a 6 figure salary, yet she never pays her bills. She also has a tax lien on her for $215k. So we are thinking that she is out of her mind to ever think that she wants to lease a bmw. Well, we cut a deal with her where she has to put down $18k along with a couple security deposits. She will never see this money again. BMW Financial agrees, and she is stuck with $700 monthly payments, and a hell of a lot of money put down that she will never see.
Some people have more money than brains. I saw an episode of "Repo Man" late one night and they were repoing a $500K boat from a huge house right on the water in Miami. Probably a $4 million house and the guy can't make his boat payment.
i'm thinking of buying a small investment property just to get some proper credit history. i've just turned 30 and live my life a quarter pounder at a time. dunno whether we in oz have a parallel credit score we can check out, but i'm sure mine would be crap because i've basically rented my life.
From what I have heard, no credit is better than bad credit. Ash, you will probably start out with a better rating than some. At least in the states, your rent will effect your credit rating. If you made the rent on time you will be okay.
Credit scores are odd creatures... not really good indicators of a persons fiscal responsibility level. Mine went from high 700s to mid 500s in the past year. I just learned this the other day when I checked it. Thing is, I only have 1 late payment, no repos, no bankruptcys, no liens..NADA.. Their reason is my debt ratio is too high at about 90%. Hmm well yes I have financed a new business investment with about $150k worth of credit cards about a year ago. I never use credit cards and only took these to finance the new business. The strange part to me is they dont seem to care what your income is or what you have in securities or that I have hundreds of thousands of equity in my home...I could easily pay off my credit card debt by selling some securities if I wanted to. My investment will start giving back around March 07 and Ill have the cards paid off by end of the year...but I still find this ridiculous. J
Please don't take this as critical, but it seems from your description that the credit rating companies are actually doing a reasonable job in your case. - First, they don't have any ideas what your assets and ability to pay off your credit card debt from stock market activity would be. As far as I know, they make no attempt to estimate your net worth (bank and brokerage account balances, real-estate equity, etc), which would probably require a level of disclosure and information collection that most people would find objectionable. - Second, the credit rating agencies are there more to estimate what your ability to repay would be in the future (new credit), more than in the past (though they also use the past as a partial predictor). Since you plan to have high credit usage until March '07, it seems reasonable for them to give you a rating that would tend to limit extension of additional credit at this time. Even large companies get into situations where their business plans don't gel within the time frame expected and their ability to repay becomes impacted. - Third, your choice to use credit cards rather than pay for your new business investment through stock sales or open a line of credit is unusual as most people don't earn more on their stocks activities than they will pay for credit card interest and most people would prefer to open a business line of credit at preferred rates over credit card rates. I'm assuming that what you're doing makes sense for you and I wouldn't begin to criticize your decisions. The point is that the actions you're taking create a certain picture, even if the underlying circumstances are atypical. They're only going by what they think is your consumer credit usage and trying to fit you into a pattern based on that. If you're atypical, you're probably better off developing a relationship with a commercial banker that will get to know you and your business.
I hear you ..and Im not taking it the wrong way. I find it more humorous than anything. I discovered my 'new' credit rating while at a car dealership and once I produced tax forms/bank statements they had no problem getting me financing at a rate that would be equal to a very high credit score with the same lender I usually use. Looking back I probably should have used a business line of credit , though my accountant has since told me that wouldnt have made much difference on my score as borrowing is borrowing. But it would have saved me a few points in interest. Though I definately make more in securities than I pay in CC interest. My point is that credit score has taken on greater meaning than it was intended to have. At one time it was simply one gauge of a persons potential to pay back a loan...now a low credit score has been blown out of proportion to be a social disease/scarlet letter. The common perception is a low credit score means 'deadbeat' instead of the real meaning which is simply a potential to be over extended financially..'potential' is the key word there. Fact is, its a very flawed/misleading system as you can easily have someone with a very high score because they have the perfect percentage of revolving credit/ debt ratio but nothing in the bank so if they lose their job everythhing crumbles. While at the car dealership I chatted with the finance officer for a while and he said my situation was becoming more and more common and credit scores are being given less weight these days because of it. So while I know some would balk at the idea of giving net worth info to credit agencies I think it would make for a more accurate system.
I got obsessed with my credit rating a few years back and fixed it up. I HAD a 799 until this year. One of the notes in my report basically stated that I did not have a house or car loan and that it was lowering my credit rating...I was trying for the highest score possible. Anyways, I bought a house in January and checked my score after and it instantly was dropped to 733!! So WTF??? Either I don't have a loan and I can't increase my score or I do have a loan and it sinks like a stone. Anyways, now I need to figure out how to get it back up to 800 again. Any suggestions?
Think of it this way, that $700 payment is only a hundred more than the last payment that she never made. She's happy, you're happy and BMW is happy...provided she gave them a good address for when they need to send their repo men out to get the car back. I have very little sympathy for those that make that kind of money and can't pay their bills.
Not sure why you're worried about that. Anything over 720 puts you in the prime rating category with most lenders, so it doesn't matter if you have a 721 or an 850, it's all the same. -R
I don't understand this; Mine (in the high 700's) actually went up 1 point after I bought a house last month. AFTER... How the hell?
True, but why be penalized for doing what was suggested in the first place? If I worked hard to get it that high it should stay there unless I earn a negative rating for something that I did wrong. Oh well, I'm not stressing it that much but it kind of irks me since I had to invest MY time to fix it in the first place (my original score was terrible based upon a bogus account claim that didn't ever exist). After taking considerable lengths to correct THEIR error, I feel cheated somehow.
I used to be an Alternate Finance Manager in my previous job at a Pontiac dealership. No credit is just about equivalent to bad credit.
say you're on $100k and just want buying power when you eventually want it without doing under-the-desk favours for barry the loans manager.... what's best as credit-for-credit's sake? a) buy everything you could afford to pay cash for on credit and pay it off right away 2) get as much debt as you can afford to pay off iii) carry a loan/card balance of $500 bucks d) carry a loan/card balance of $50k v) keep shifting money around lots of accounts/banks to simulate cashflow
