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Credit score questions

Discussion in 'Off-Topic Discussion' started by fisherman951, Oct 25, 2018.

  1. Oct 25, 2018 at 2:23 PM
    #1
    fisherman951

    fisherman951 [OP] MT dreams

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    wanted to see if my fellow tundra owners have any advice on this subject. So My
    Number 1 priority is to raise my credit score. I have some questions. Has any1 ever paid off all their debt and see a credit score increase? If so how long was the process? Or did it drop? I have some cash that I’m trying to figure out how to use it as an ADULT (so no Toyota mods with that cash) . Or I’m wondering if I should just keep making my payments on time and not worry about it for now ?
     
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  2. Oct 25, 2018 at 2:31 PM
    #2
    Marty McFly

    Marty McFly Nobody calls me chicken!! Except when off roading

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    My wife and I paid off our credit cards and it went up a decent amount. Probably a a few weeks till we saw a difference. Less debt = higher credit score :thumbsup:
     
  3. Oct 25, 2018 at 2:31 PM
    #3
    Festerw

    Festerw New Member

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    Credit score wise credit usage is big, on credit cards get the balance down to about 10% of the credit limit and don't close the cards. Seems dumb but apparently it's better to have a lot of credit available and not used rather than not a lot that's paid off regularly.

    If these are just loans you're paying on it won't make a huge difference just pick the one with the highest interest rate and pay that.
     
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  4. Oct 25, 2018 at 2:31 PM
    #4
    Gibo244

    Gibo244 New Member

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    Better to make payments (if it’s a auto loan). Unless u need to remove debt. Such as applying for a mortgage.
     
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  5. Oct 25, 2018 at 2:33 PM
    #5
    TXRailRoadBandit73

    TXRailRoadBandit73 YOTAS,RAILROADER,RÖKnRÖLLN',BEER,MAX/GEMMA

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    This is true, paid off wife's n mine cards we had, both our scores went up in few weeks
     
  6. Oct 25, 2018 at 2:34 PM
    #6
    Gibo244

    Gibo244 New Member

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    But like others said credit cards debt ratio should stay low. Because to creditors high card use may be linked to dependency or poor cash management
     
  7. Oct 25, 2018 at 2:35 PM
    #7
    Marty McFly

    Marty McFly Nobody calls me chicken!! Except when off roading

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    This is true, for whatever reason don’t close your credit cards.
     
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  8. Oct 25, 2018 at 2:35 PM
    #8
    15whtrd

    15whtrd Mr. Blonde

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    If you’ve got enough cash to pay off your debt. I recommend doing that. Take it from me I have great credit but a lot of debt. Pay off your highest interest loans or credit cards first. In my experience, it definitely raises your credit score. Rather quickly. In my experience what raises mycredit score so quickly is using my credit card, and paying them off. Also closing out credit cards can sometimes hurt your credit score from what I have heard. You don’t want to many and it looks good if the ones you do have you pay off consistently.

    I am not an expert this is just my experience.
     
  9. Oct 25, 2018 at 2:38 PM
    #9
    Marty McFly

    Marty McFly Nobody calls me chicken!! Except when off roading

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    Don’t forget, it feels real good when you get rid of your credit cards :yes:

    But it’s tempting to put mods on good ol MC/ Visa LOL :spending:
     
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  10. Oct 25, 2018 at 2:39 PM
    #10
    Gibo244

    Gibo244 New Member

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    As an adult go LT
     
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  11. Oct 25, 2018 at 2:42 PM
    #11
    TXRailRoadBandit73

    TXRailRoadBandit73 YOTAS,RAILROADER,RÖKnRÖLLN',BEER,MAX/GEMMA

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    I've gotten way better along the years on money management, on cards I pay a lil more than min payment also on my truck note I pay lil extra more
     
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  12. Oct 25, 2018 at 2:43 PM
    #12
    teedubbya

    teedubbya I like fat booty

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    If you have cards that are maxed out or almost maxed out, those will have the biggest impact.
     
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  13. Oct 25, 2018 at 2:44 PM
    #13
    OBXTundra

    OBXTundra Member

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    Credit agencies like to see long history. Long history shows stability. Closing and opening cards and accounts shows volatility.

    I use my rewards card for EVERYTHING. But I pay it off every single month. Never carry a balance. I've had the same credit card open for 15 years. I converted it to a platinum card and then a rewards card, but maintained the same account to not have a break in the card.

    Home and auto loans are weighted differently than credit card debt, personal loans, and store credit cards. But as always, the higher the available credit the higher the score.

    I would pay off any credit card debt, personal loans, home equity loans, and then toy loans (motorcycles, utv's...).

    If you have a low interest rate on a vehicle, you're better off putting your cash somewhere that you might see a safe 8-12% return instead.
     
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  14. Oct 25, 2018 at 2:44 PM
    #14
    Gibo244

    Gibo244 New Member

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    That’s good practice. To clarify I meant using cards to their limit.
     
  15. Oct 25, 2018 at 2:47 PM
    #15
    Field Walker

    Field Walker New Member

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    Recently bought a Tundra after working on my credit for about 6 months. Here is what I learned

    1) Credit gains happen when you get your "credit card debt" down to 50% 30% and 10% respectively
    2) Paying off vehicles do not matter to your credit score that much maybe 1 or 2 points.
    3) Dont have any missed/late payments. Once you have a good payment history you can call and ask for credit increases. Going from owing $600.00 on a $800.00 card to owing $600 on a $1000 card will help skew your debt to equity ratio in your favor.
    4) Wife and I now pay all our bills with cards, then pay the credit cards off just to keep them cycled.
    5) If you pay off a card completely and do not use it for a while the company could close the account, which is a pretty good blow to your score (even though the account was in good standing) and those stay on for five - seven years after the closure.
    6) Keep any "hard inquiries" on your credit off.
    7) DOWNLOAD THE CREDIT KARMA APP. When the sales staff at Toyota ran our credit it came back within 5 points of what was listed on the app. With the app we were able to see a false collection pop up, and were able to dispute it from the app with low hassle. We had it cleared u in about two weeks..

    There is a lot more nuance to the credit "thing" but after a crash course this last year I was able to raise my score significantly. I pass these things on for the fact that they were hard lessons to learn after years of not knowing/making foolish decisions. I wish you well in your endeavors.

    -Basqueknight
     
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  16. Oct 25, 2018 at 2:52 PM
    #16
    KnuckleHD

    KnuckleHD New Member

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    There are a lot of factors that go into building your credit. Paying off all your debt and no longer using your credit will raise your score initially but you may see it begin to drop/ level off after that. You also have to determine what is considered “good debt” vs “bad debt”. Ie it’s better to have home loans, auto loans and or school loans than it is retail credit cards. It is true that closing cards will initially lower your score, but it may be necessary to help you raise your score long term. Having too many lines of credit or too much available will also lower your score, regardless of the balance.
    It’s hard to tell where you are at or what your current situation is but it’s typically recommended to pay off all your bad debt and close the cards. Keep no more than 2-3 cards open with enough credit for emergencies and keep the balances low or pay them off monthly. If you are comfortable with your current credit limits, don’t increase them, even if the company offers to do it “for free”. It goes without saying that making payments on time is also very important.
    My wife and I make payments on our home and vehicles. We each have 1 credit card with a relatively high credit limit for emergencies only that we occasionally use and pay off to keep them active. We have 1 other card that we use for all other monthly expenses, groceries, gas, etc and pay the balance monthly. We both have excellent credit.
    Sorry for the long post, hope it helps a little.
     
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  17. Oct 25, 2018 at 2:53 PM
    #17
    Marty McFly

    Marty McFly Nobody calls me chicken!! Except when off roading

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    Huh, I did not know that. I should prob use some of my cards. Once we paid them off, i haven’t touched them in a long time :eek2:
     
  18. Oct 25, 2018 at 2:53 PM
    #18
    KnuckleHD

    KnuckleHD New Member

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    By the way, I’m not a CPA or expert by any means. Just my personal practice and experience.
     
  19. Oct 25, 2018 at 3:13 PM
    #19
    Sterlinglwood

    Sterlinglwood Never enough!

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    Just wait for Ultra Fico to come out next year.. Start using your debit card smart now because how you use checking, savings and money market accounts will soon reflect on your credit score!
     
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  20. Oct 25, 2018 at 3:16 PM
    #20
    Blueknights75

    Blueknights75 040 IS THE FASTEST

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    Took about 4-6 weeks to see my credit score jump up significantly once I paid off my credit cards. I always keep about 10% of my max on the card as I was told to never fully pay them off but rather keep 10% of their max on them. For instance I have a card with a 15k max. I typically have a 1K balance on it. Not sure if this is true or not but I have definitely seen a positive change on my credit score.
     
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  21. Oct 25, 2018 at 3:19 PM
    #21
    BuckWallace

    BuckWallace Ball don't lie.

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    Are you trying to raise your credit score for a reason (buying a house/getting a mortgage), or is it just so you can say you have a good score? I wouldn't worry so much about your score as I would just getting out of debt. Don't keep debt just because you think it might help your credit score.
     
    Last edited: Oct 25, 2018
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  22. Oct 25, 2018 at 3:24 PM
    #22
    fisherman951

    fisherman951 [OP] MT dreams

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    I won’t quote every ones post as it would take me forever but I truly want to say thank you to every single one of you. It’s nice knowing I can always get some advice from the tundra fam bam. I’ll definitely pay of most if not all from my Cc. Reason I’m trying to raise my score is I want to refinance my house to 15 years but my debt ratio is way to high so it’s affecting my credit score. Once I drop down my debt(get rid of) hopefully my score goes up and boom win win.
     
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  23. Oct 25, 2018 at 4:28 PM
    #23
    Sunnier

    Sunnier Pity the warrior that slays all his foes

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    It'll bump your score even higher if you pay that off every month AND not carrying a balance means you won't pay ANY finance charge.

    We use 3 rewards cards for everything (1 for gas and Costco; 1 for 6% back on groceries; one for everything else-- that earns us enough travel points for a round trip for 1 of the 3 of us every year, so it's "worth" a bit under $1000 per year to us to do it.)

    We used to just pay them off every month. But our credit utilization showed too high. And I acted on bad advice to ask one lender to lower limit on one card when we planned to open another. Don't do that; keeping 'em higher than you need does help your utilization score. I got a bump in credit when we started paying off balances as soon as our statements close, instead of just before the due date (again, clearing the credit utilization before the once per month credit check each does). But even doing it that way sometimes showed a skewed utilization, because we run almost every transaction through a card.

    Recently, all 3 cards added an instant credit score feature to their site. The date of the most recent score seems to indicate about when in the previous cycle they ran that credit utilization check. So armed with this information, I try to pay off the card after the statement closes but a 4-5 days before that account runs that balance check, so my utilization looks low. This requires a don't make any big purchase during this time (I learned this after doing it a couple times recently and seeing a significant dip I couldn't at first figure out). FINALLY, if I do make a big purchase, I now pay off big charges immediately.

    This probably seems like a hassle, but since my credit progress has been incremental, it's okay. Everything except the 3 cards is on auto pay, so I don't miss anything. Basically, this works for us because we essentially live on cash (we pay off everything but the mortgage and the Tundra each month), but utilize a credit card for everything because the rewards allow us to travel more than our budget would otherwise allow.

    @Blueknights75 I didn't mean to tag you to tell you about this, but because I was riffing off your "10% balance" practice. I just wanted to let Tony know about how we pay for travel. #honeymoon #millionsofkids
     
    Last edited: Oct 25, 2018
  24. Oct 25, 2018 at 4:46 PM
    #24
    Blueknights75

    Blueknights75 040 IS THE FASTEST

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    So I am assuming that what I was told was not true regarding leaving a balance on your credit cards to make your credit better?? Just want to make sure.
     
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  25. Oct 25, 2018 at 4:55 PM
    #25
    Sunnier

    Sunnier Pity the warrior that slays all his foes

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    Yeah, the only ones who benefit are the credit lenders because you have to pay interest on the balance. No benefit to you.
     
  26. Oct 25, 2018 at 5:06 PM
    #26
    ninjajay

    ninjajay Posting from the toilet

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    My only advice to add is don't over complicate it. Trying to figure out a "technique" versus paying down balances in descending order of interest rate will likely just cause you to pay more. Remember the ultimate goal is keeping as much of your money as possible, not raising your score.

    I don't think my credit has ever gone over 825 or so but I pay off credit cards in full every month and my only outstanding debt is my 0% truck loan.
     
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  27. Oct 25, 2018 at 5:59 PM
    #27
    tomsinamerica

    tomsinamerica New Member

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    while i'll be the among first to say that paying off debt is super important - i firmly believe that cash is king and debt payoff should be driven by the type of debt. While i could clear my truck loan with what's in my savings account and forgo the monthly payment, being that low on cash would scare the piss out of me. Given it's at 3% or so interest, I'd rather pay that and have the benefit of cash, if/when I need it.

    Bankruptcy isn't always caused by running out of money... its caused by running out of liquid assets and not being able to pay something. Owning your truck free & clear ain't worth shit if you don't have the cash to pay the tax bill for it.

    So back to topic.. separate debts into secured vs. non-secured. Non secured are the ones that I paid off first. Primarily my wife's student loans. A fat ton of debt at moderate interest rate with nothing of value to show for it... (wife's opinion may vary) is toxic. You can't sell something to clear it off - you just have to suck it up and pay it. Secured debts get paid last... car loans, mortgages and so on. Typically you'd see this with interest rates as well... non-secured have higher interest rates... therefore pay them down quicker. Once you're left with only secured loans, unless you have some horrendous interest rate, I plotted them out with a balance to monthly payment ratio and went after the ones that would give me more disposable income faster which i could then choose to pay off another loan faster. In the end, i'm left with a mortgage... my truck loan and a tiny note on the wife's car which... back to topic... i financed 20% of the value to build credit history as my credit thingy came back with "limited number of credit accounts" as a negative factor.

    A secured loan and using 10% of any CC balance is the quickest way to build credit. That and pulling quarterly credit reports so that you can see when some fucknugget sets up Amazon & walmart accounts in your name and get them cut off before bad shit happens. I use Identity Guard now to prevent that. While I bitch and complain at the $20 a month each time I pay it... I'm damn glad when i get the notification that someone filed a credit check against me.
     
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  28. Oct 25, 2018 at 6:57 PM
    #28
    Prostar 190

    Prostar 190 SSEM #9 I would rather be water skiing

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    Yeah don't think it's helping you just them. I have always paid of my credit card every month and have great credit. But I have been told the same thing before just never believed it.
     
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  29. Oct 25, 2018 at 7:03 PM
    #29
    tomsinamerica

    tomsinamerica New Member

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    I think it does because it shows payment history... Zero balance means zero payment so technically you're not showing responsible use of credit.

    I filled up with gas on a card a while ago and it auto pays at $5 per month ... It's not hurting my score, that's for sure
     
  30. Oct 25, 2018 at 9:36 PM
    #30
    TheFreshMouse

    TheFreshMouse learning as i go...

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