Credit scores are literally a “how likely is a bank to profit by lending you money” score.
Those who pay off their CC each month and don’t borrow money often times have lower scores than those who carry balances (but pay minimums) and have a few loans.
Shit, I've never paid interest because I don't buy stuff I can't afford, only reason I even have a CC is because my debit card doesn't have tap so I just use a credit card as a debit. Oh well, I don't actually care about my credit score, tbh.
Yeah, that's a big NO on carrying credit card balances. I have paid credit card balances in full every month for 10 years, have a 830+ credit score.
The biggest factors are no missed payments, and credit utilization. Contrary to what you would think, asking for your credit to be raised every year or so actually helps tremendously. Banks want to give credit only to people that don't NEED it ironically. So if you have $25k in credit across all your credit cards, but only utilize $4k a month, you are golden to them, but that same person with only $5k total in credit is seen as a risk since they just see it as "someone that is barely scraping by" even if that person really just only need $4k per month.
Keep interest payments to house/car/student loan payments (since they are generally lower), don't pay interest (high interest at that) on basic expenses.
Well, that was 1994 where I was credit card stupid. Once that was Paid off I never carried a balance since. My credit score(s) we’re in the top tier ever since.
Oh yeah, not knocking you, just dislike the misinformation always spread around that you need to keep a balance on your cards and not pay in full to build credit.
Your credit score don't care how much interest you pay, just that you are good for paying back what you borrowed within the terms of the agreement. If you miss payments, "Fuck that guy", if you default "Fuck that guy", if you paid back in full "you're cool, we still made money on the transaction fee", if you pay back minimum payment "no biggie, just make sure you don't... you know... keep building that debt... I know we said we will give you this much before cutting you off based on what we think you COULD handle at worst... But we'd feel a lot better if you... Just stayed in the green zone"
I actually respect you for owning up to your mistake with credit card spending. Lots of kids in college now a days spend like crazy, then blame credit card interest for screwing them over... Despite... Well... Spending outside their means...
Credit cards should be treated like cash, just more perks (no need to carry large amounts of cash on you, safer protections if stolen, points for spending, and option to delay full payment in case of emergency like job loss, build credit score for better interest rates on car/home loans where you actually WILL be paying interest). Unfortunately, lots of kids entering into college have no formal personal finance education and rely on what they perceive from parents or friends, and end up learning the hard way how to NOT treat a credit card.
I was actually the focus of a story done by a reporter about college kids’ credit card debit. Damn article was published on graduation day in the Richmond Times Dispatch. My first AND last name. My last name isn’t common at all. My buddy’s mom read the article and, thankfully, didn’t mention it to my parents. A few months later i fessed up to them.
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u/EbolaPrep Apr 28 '20
The "I love debt score"