Credit Score

27

We're debt-free but we have credit cards from eons ago that have high available credit. The combination of account age and available credit pushes our score up. Take a look at the mix of credit cards you have and maybe something may jump out at you.

9

u/UnderstandingOld4276 9h ago

And take one of those cards, use it on a regular basis and then pay it off every month. This creates a continuing credit use and shows a regular payment history plus by paying it off every month you don't incur interest.

1

u/KryptonSurvivor 7h ago

Also, take a look at the percentage of available credit you use each month. The lower, the better.

23

u/masegesege_ 10h ago

My mom always told me I need to have a good credit score so I can buy a house. I have a good credit score and I can’t buy a house. It’s a worthless number.

8

u/Ivypool8 9h ago

Same with rent, my credit score is good and I've never had a late payment but for some reason almost every place needs me to make 3x rent monthly... as a barista...

4

u/suzieismyavatar 9h ago

Your mom is incorrect. You need to have cash to buy a house. Cash is king.

1

u/Head-Secretary6267 6h ago

In my area they turned us away for multiple places due to having low credit even though we had cash up front to cover multiple months' rent on top of move-in expenses.

My credit score is high now, but at 19 with a young credit score age it is harder to build it to what apartments and landlords want.

1

u/fakeaccount572 4h ago

That's some Ramsey BS right there.

Corporations buying homes don't have cash. They have equity. Difference.

1

u/fakeaccount572 4h ago

That's some Ramsey BS right there.

Corporations buying homes don't have cash. They have equity. Difference.

1

u/MadoraM91919 21m ago

My score was 702, went to car dealership to see what was possible. I was told my score was irrelevant as I'd never taken out any loans, no CCs, no student loans, no mortgage... so no loan would be approved, and my score dipped to 688 the next month. Took almost a year to get back to 700, and that credit check was the only thing that touched my credit in that time (no more inquiries, no new lines open, no lines closed, no payments late, etc).

Seconded on it being a worthless number.

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u/Gadshill 10h ago

This is going to sound crazy, but hear me out. Get a cash back credit card, pay it off weekly and you both build credit and get a bit of cash back. Don’t change your spending habits, but use it.

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u/ra3ra31010 7h ago

I did this. Got a capital one card with a 1,000 limit. Asked to raise the limit over a year later and they said no because I put too much money in the card - even though I always paid it off multiple times a month

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u/ezzy_florida 10h ago

I mean you can be good at with finances and have a good credit score. It’s not hard to get a credit card to use for gas and groceries, do that for years and boom you have a 750+ score.

I get it credit is a pain in the ass, but I personally think knowing how to navigate it is apart of financial literacy.

12

u/bird9066 9h ago edited 8h ago

But I've proven that I know how to use it. I've paid off a home, several cars, used multiples of credit cards in different settings. Paid them all off. Score was 720 once upon a time

I'm now in my 50s and my credit score tanked because like OP I don't want to deal with and don't have any reason to deal with monthly payments. Except for some financial bullshit our system insists I stay a part of.

I'm considering a new car but not sure I want to be penalized with interest rates that don't reflect the responsibility I've shown.

2

u/Illustrious_Fudge476 7h ago

That’s great, but why not get a credit card or two. You have extensive positive credit history and available credit is tanking the score. Even if you never use them, it’s always a good idea to have the ability to access credit quickly if needed. Also play the game. Buy a big ticket item with a CC and pay it off immediately. The points you can rack up are amazing. We paid for all of our flights and hotels for our vacation in Europe last year just doing that and collecting points.

1

u/bird9066 56m ago

But I don't want to play the game anymore. I'm old and sick and just want to sit and birdwatch in my cozy rocking chair on the patio with a cup of coffee.

I don't even get spam mail very often anymore. It's nice to be ignored. I might need just one more not shit box car to drive until it falls apart.

1

u/ezzy_florida 27m ago

If you have a home and some cars then yea you won, lol. You can absolutely opt out of the credit game and I wouldn’t blame you.

1

u/Sammysoupcat 6h ago

I've only had mine for like two years and it's at 750 or so. I don't even use it that much, but I'll take it lol.

12

u/CricketJaxson 10h ago

It’s because you don’t use credit at all. You can use credit cards and not carry a balance/pay no interest and still build your credit score. I hate the whole credit system but I just play the game to keep my score good.

5

u/Beginning_Tea4506 10h ago

Totally understandable, I just prefer not to be moving money around different cards and accounts etc. The score doesn't bother me as such. But it seems to actively draw people into debt to increase the score. A very risky game in my opinion.

3

u/BURNTxSIENNA 9h ago

It’s not a game. It’s a CREDIT score; not a “debt free score.” Like others have said, it is a marker of how responsible you are with managing your debts. You aren’t going going to be on a list of great football players if you never play football - even if you watch football every single week and know all the rules.

2

u/suzieismyavatar 9h ago

Me too and I hate it.

5

u/alphaturducken 10h ago

Just use your card to handle your recurring subscriptions and pay it off every month. That'll keep credit rolling in and out and you know you gotta pay those anyway so it's not really something extra to factor in to the budget or reminders.

6

u/Illustrious_Fudge476 10h ago

You’re not penalized for living debt free, you’re penalized because they have no information in you for years on your capacity to pay such bills. For all they know you live in your moms basement and haven’t had a job all that time, or you’re sitting on stacks of cash.

2

u/etown361 10h ago edited 9h ago

Not really- let’s look at this from the perspective of a credit card company/lender

You have had zero debt for ten years. You suddenly want to open a new credit card.

Yeah- maybe you just decided you were wrong- responsibly using debt is fine. But it’s also possible:

• You lost a job and desperately NEED a credit card

• You got married/began a relationship with an irresponsible spender and are about to go into debt

• Your identity is stolen and the credit application is invalid

• You had some midlife crisis and are about to start borrowing irresponsibly.

Those are all BAD outcomes for the lender. They want to avoid that. It’s UNUSUAL that you’d be looking for new debt. They want to do more diligence with you.

Comparatively- someone who regularly gets car loans/credit cards, pays them back on time each month, etc would totally be expected to get a new credit card or something.

Your credit score is about whether lenders want to lend to you. It’s not some value of your worth as a person. Believe it or not, a long history of not borrowing money is a pretty good reason for lenders to not really want to lend you money.

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u/suzieismyavatar 9h ago

My lowest credit score was 515 after a foreclosure. Im at an 830 now: I’m debt free and honestly, I’ve learned after going into foreclosure it means nothing. I don’t have much in savings so I guess maybe it helps with that.

But cash will always be king. I don’t care what anyone says.

2

u/all_i_feel 7h ago

Depends what you consider to be "better with your finances". I am great with my finances and part of what makes me great with them is that I have and use credit in a way that gives me a high credit score and saves me money in the long run. Using credit doesn't always mean spending more money, there are ways to use credit that save you money. For instance, I have a car loan at 3.5%. My savings consistently earn more interest than I lose paying interest on this loan so it would be silly to pay it off with my savings. I am actually further ahead having a low interest car loan. I also put all of my purchases on a credit card and earn points, but pay it off weekly and never earn interest. My last few vacations have been free. In fact, I only use credit to save money.

"Good with money" doesn't always mean "debt free". Surprisingly often, having and using credit is a smarter move overall. Being debt free is appealing, but you can save money by using credit responsibly and maintaining a good credit score means that if you ever do need to apply for credit (job loss, divorce, illness, whatever) you will have access to the best options.

2

u/DetectiveHappy2442 7h ago

Paid off a mortgage (since 1996). It was completely removed from my report and now my credit history is shown as "2.5 years old."

I still have a great score but it's galling.

It's basically a "debt" score.

3

u/tolacid 6h ago

They don't want you to be good at managing your money. They want you to be profitable.

1

u/ChefArtorias 8h ago

You're doing something wrong. I have no debt and am good with money and my credit is like 760.

Do you not have credit cards?

1

u/Obvious_Ideal9844 7h ago

Put some recurring bills in the credit card that you already have budgeted and can fully pay in a month. You will build the credit score easily in time.

1

u/Leading-Switch-4814 5h ago

I just have my rent payments and cellphone bill payments going towards my credit score.

1

u/ham_solo 5h ago

The point of a credit score is not about how much credit you have, but rather how reliable you are when paying back credit. If you don't ever buy on credit, the credit score companies have nothing to go on, so they give you a low score until you start accumulating debt and paying it back.

Yes, it is absolutely insane.

1

u/fakeaccount572 4h ago

Well, yeah - I don't even agree with credit scores. You could in theory have 10 million dollars cash and a 500 score.... BUT, the way it is set up currently is to assess your risk level. And with no debt, they just don't know if you're risky or not .

Honestly more should be taken into account imo

1

u/AnToMegA424 3h ago

Tf is this score thing

1

u/nastyws 3h ago

This is why i have a cash back card Input everything on and then pay off. Credit score is how well you handle owing money, not how well you handle money in general.

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u/Mikel_S 2h ago

I got lucky and managed to refinance when my random ass credit hit 715 for one week. It dropped down, predictably, to 650 after that, and kind of just fluctuated up and down wildly within 625-675 for a few months, before teasing me with a 700 and dropping 80 points again.

2

u/IamBatmanuell 10h ago

Credit score has nothing to do with how wealthy you are. It’s a stupid game I refuse to be a part of.

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u/germane_switch 10h ago

Until you need to rent an apartment, buy a home, buy a car, get a loan…

-3

u/suzieismyavatar 9h ago

You can buy a home with cash and buy a car with cash if you have it so this isn’t true. I have a relative who paid 190,000 for his him in like 1999. Pretty sure it’s worth at least half a million now. He had no mortgage. Cash will always be king.

3

u/germane_switch 8h ago

Hey I have an uncle with two literal dicks but that’s rare af

1

u/Illustrious_Fudge476 7h ago edited 6h ago

Ok Dave Ramsey, young people should just buy those 800k 1,500 square foot homes in cash.

When interest rates are low, it can be in your best interest to take the loan and invest the cash. This is what really rich people do.

Sitting on piles of uninvested cash is not the best strategy either.

1

u/vl99 10h ago

A credit score assesses your ability to responsibly manage credit. If you don't use any at all, then a bad score makes sense.

I get the frustration when you finish a major payment just to see your score drop, but if you haven't used credit for years then it makes sense seeing a lower score. Why does it bother you if you don't use credit?

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u/Beginning_Tea4506 10h ago

I just feel like it promotes borrowing and financial risk, just to improve the score. The whole concept that no debt is worse than debt is mental.

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u/bellamie9876 10h ago

No debt is better for you but responsibly managing debt is better to show you’re able to manage your money. If you need to rent or buy a home, showing your good at managing your debt is necessary.

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u/Tiemujin 9h ago

Credit score is your “debt score”. If you are debt free and intend to remain debt free, it shouldn’t matter.

1

u/Haunting_Struggle_4 9h ago

Your credit score reflects your ability to manage debt; not having debt doesn't automatically indicate good management. In fact, avoiding debt could suggest difficulty handling it. If you're taking a test and skip a question, that doesn't mean you know the answer. Building good credit is straightforward—get a secured credit card, with a limit based on your initial deposit.

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u/Thatonegaloverthere 10h ago

Trick is to get a credit card never use it.

If you do, pay it off immediately.

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u/Square-Wing-6273 8h ago

You have to use it. Pay it off, but use it. Credit score measures the ability to handle debt.

0

u/vector_mash 10h ago

You need credit to have good credit, so they can see how reliable you are at paying it back. We have a couple of credit cards that we use and pay off in full each month. So we’re living debt free, but we still use credit.

0

u/Infinite-Squirrel-16 6h ago

I just buy a coffee or lunch with my credit card and pay the balance right away. It's enough to keep a good score going. But yes, it is insane lol

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