Does Anyone Understand Credit Scores?

Credit scores are one of of the biggest scams going in America, and that's saying something. 

What tatters said.

Paying interest is for suckers.

I totally agree with Tatters. That said, my understanding is that on-time payments, how much credit you're using, and any dings count the most. The age of your credit history also factors in, but not as much as the the first three, and any recent inquiries count least of all.

My Transunion and Equifax are closely aligned and have been pretty stable for some time, but what I learned a couple of years ago when I bought my car is that the numbers on free credit reports can't always be relied on. At the time, I thought my score was close to 800, but the dealership's finance person told me that I was at like 825. Go figure.

The fact that these pieces of shit have information about me and share it with other people sickens me.

Not to mention the fact that they fucked up and allowed all of it to be taken.  

One of the ugliest aspects of modern society.

Founding Fathers would have found it very offensive IMO

Last time I checked my credit score (3 years ago buying a car), it was 841.  That's all I need to know. 

You can maintain a good credit score and carry no debt load. It's a game but my wife is an expert at it, we had our house paid off in 3 years. I really don't know how she does it. 

Does Anyone Understand Credit Scores?

The higher the better

Don't pay your bills and it wii drop

Any more financial help, I'll be here all day

Bk I still don't think financing an immediately depreciating asset (even with no interest you are still losing money) is good financial practice. And as you correctly point out; you really just have to pay your dues in advance instead in the form of monthly interest (revolving credit) over many months to qualify. And you're also forced into full insurance coverage for the duration, which is probably another conversation.

although I gotta agree 2.3 on a rental dwelling is damn cheap money

I know the game well.  Never something I wanted to be involved with but I needed to learn the algorithm. 

Borrow and pay.  That's the only way your score maintains or goes up.  If you do not, nor ever have had any loans(yes there are those people) you won't even have a score. The score is based on a bunch of factors -- the most pertinent is that you have been granted credit and you have made good on that credit.   

. 

Borrow and pay.

https://www.youtube.com/watch?v=1uAyovudcJQ

I think that's what my wife does. We borrow at best avail rate for any big purchase  and then pay it off with first payment. We don't buy anything we don't already have the money for so it gets paid with first bill.The only trick is making sure there is no early payment penalty. So credit stays great and no debt. It gets interesting because she uses these high yielding investments with some of our savings, so when it comes time to buy something, we already have alot less into it then the actual cost. Glad she is into it and not me

But why would the rate matter at all of you pay it off immediately?

Bk in your situation I think you could probably get a free (modest) bump by increasing the limits on your current revolving accounts. Revolving accounts are short term (monthly) billing cycles, and no fixed number of payments. Credit cards.

the way to game this is to have about a half dozen cards, (and use them all), but rotating which ones are paid in full monthly and which ones carry over a small balance for a few consecutive months at a time, then switching it up. Doing this while mindful of rates and incentives, of course.

This will build and maintain revolving credit as cheaply as probably possible but not free.

It's a benchmark of good credit to achieve the best possible avail interest rates as well as the always potential for unforeseen  disaster that could compromise the ability to pay immediately 

Technically it doesn't but Im thinking it's a description of his wife's fiscal responsibility.   If the full payment isn't made the balance will be subject to the best rate out there. 

It's a shit game.  Unfortunately we are stuck with it.  Learn it. Don't be surprised if it works for or against you.  

Indeed fish, good answer, thank you.

Yup, it happens... sorry to hear but you just never know what's around the bend . Glad you are on this side of it now

I don't really pay much mind who the F cares anyway

Fwiw If you don't borrow money you can't be in debt

If you're lucky get a fixed rate mortgage  and fixed-rate car note if you need to

Dont EVER pay anything late is a big key - make the minimum ON TIME. If you have credit cards, use them for gas, clothes, groceries but ALWAYS either pay them off every cycle or, again, make the minimum payment(s). Be careful because, obviously, over time those minimum payments will lead to longer term debt that can bury people.

Younger get people need to be more mindful of building and maintaining good credit because it can very well be a factor in employment, insurance, and any loan(s) that may be sought out. Guard it like a hawk and check it quarterly.

Throughout the pandemic, many banks and other financial institutions have reduced some lingering debt limits on presumably unutilized debt (myself included) which could raise one's credit utilization portion of the score too. Dont run anything up to the limit if you can avoid it or, as stated, pay it off/down ASAP.

Those tips work...I have maintained an 800 minimum score for at least 20 years. 

...all 3 credit monitoring agencies offer a free annual check/report so rotate them to get one done every 4 months

> banks and other financial institutions have reduced some lingering debt limits on presumably unutilized debt

I want to understand what this means, StrawBud, but my brain just doesn't know what to do with it (blame the Tahoe). A little help, please?

Let's say you have a credit card with a limit of $20K that you have $5K "utilized" (carrying a balance of $5K, utilizing 25% of your ability/allowance). The credit card company sees that you really are not using/"utilizing" $15K so that lower your limit to $10K. Now your utlilizatuon rate is 50% opposed to the former 25%...in a nutshell. You are now more of a risk and in potentially deeper water because you are utilizing more of your availability and closer to your limit.

That's fucked up. You assumed the debt with an understanding of the percentage of your credit that debt represents, and they can just change it like that? I know they can change stuff like interest rates, but the companies have to know that this move negatively affects people's credit standing.

I also don't understand what's in it for the companies to do this. I'm guessing that it lowers their exposure as lenders, but is there some other benefit to it?

Many banks were scared that the pandemic fallout and unattended mortgages and the like was going to smash them so they started digging deeper to retain as much funds and lending power as possible. But yea, they suck and credit cards are essentially unsecured debt instruments.

> so they started digging deeper

I think "gouging" would be a more appropriate verb there.

Just a note. You can charge anything over a hundred bucks to Paypal credit and as long as you pay every month, no interest is charged. They are counting on you screwing up. I have been using for 2 or 3 yrs now and never paid a cent in interest.

My credit card debt is another story.....  I pay a ton of interest every month. My overall credit balance goes down every month, but not fast enough.    7 straight yrs of DNB in Hawaii......

My credit score is in upper 700's on all three.

Yes, I agree that it is sort of a game while Transunion, Experian, and Equifax sort of help write/execute the rules while staying relatively non-transparent. I had a false medical billing ding hit my name/account due to a hospital error after an ER visit following a mountain bike crash in 2008 that was a nightmare trying to get removed from my report from one of the agencies - I do not recall which one had it recorded. I was never properly billed (they somehow had a wrong address for me) and it went to collections before I was even aware that there was an outstanding balance due. I saw it in my credit report and attempted (successfully) to pay it as soon as I learned about it but the fact that it had already been reported to a collection agency was enough to stand out stick. At least at that time, medical dings basically "did not count" but it still drove me crazy until it dropped off a few years later. I appealed and lost, basically having said agency claim "it was not reported in error". Anyway - good luck out there. It all sucks but also part of the game of life in the modern world.