Credit information?
 

I'm sure most of you on these boards have heard some "detailed" information about how to so called "build" your credit. I have been doing searches on google trying to figure out the rock hard information that explains credit in general and I cannot for the life of me find it!

If you ask anyone how to "build" your credit, you will find that many people have different opinions on how to build credit. Examples
-Credit card
1. Only charge an amount of money you can pay off monthly
2. Never make minimum payments
3. Be sure not to pay off the card leaving a zero balance every month.

I'm sure many of you have heard these variations. The question is, "What is the truth?" I can't for the life of me locate a credible site that explains the "Credit chart" or basic information about credit building. When I google this, I get massive "FREE CREDIT REPORT" offers that are likely not legit offers.

Better business bureau had some information but not nearly what I was hoping to run into. I was really hoping someone on here has had this same question and ended with higher success than I've achieved. If you have, please do me a favor and send me a link. Word o' mouf is great and all but I want INFORMATION, not hear say.

Re: Credit information?
 

I was told by my bank when applying for a loan that the 2 things that matter most is your credit to debt ratio and obviously that you make payments on time.

Re: Credit information?
 

It's called "Debt to income ratio" and yes that is as important as credit according to a bank. Making your payments ontime is an A+ but people don't get outstanding credit scores just by making ontime payments. There are plenty of information out there, I just can't find it. All of the ads keep the real information hidden.

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When I purchased my house last year, I had a 790 credit score. I didn't use any special process to build my credit. Just 1 car loan that I paid off in 4 years. And a couple credit cards that I just made on time payments too. No special tricks or processes. Just some credit cards and 1 loan, and made sure to make my payments on time. When I was looking for house loans, every bank I spoke with said my score was excellent for a 23 year old, and I'd have no problems getting a loan. My score is still in the mid 700's, the only debt I have is my house, and $500 left on my 13mo no interest loan from Circuit City from when I bought my TV setup. I'm sure people will say that always having a little debt is good, but I personally hate debt, and pay cash for just about everything. I'll buy something every couple months on my credit card just to keep it current, and then pay it off a couple days later. That's obviouslly worked for me.

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I've had to get back to using credit cards to build my credit. Carrying a balance works to build credit cause it shows you can manage money. But, the key is to not get the need for that. Brandson had the perfect layout to building and keeping good credit when young. And it's people 18-25 that detroy their credit most. It's hard to build it back up then as well. I've watched my score jump up about 75 points in the last year. One more year like that and I'll be sitting pretty. One thing we did a lot last summer was put a lot of the gas we used on a card with a $300 limit. I kept a revolving balance of around $70 for the summer, so it did cost me a little in intrest but the general rule was to pay off everything as it statement came in. Now with the new car loan we've kicked the use of our credit out a lot.

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Well I just checked my score just now, still sitting pretty!

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Where did you check it? I know there are free ones all over, I havent checked mine ever.

Re: Credit information?
 

There is a guy on MNSC 'jjdurrant' that works for the company that created the credit score shit. He has some great tips over there as well. One which is to only use www.myfico.com to get your solid credit score. He also advises on some credit cards that do more damage that good.

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FYI: Everytime you (or anyone else) checks your credit score (with your permission) it is lowered slightly. Checking it once a year is a good idea, but just don't do it too often. Getting insurance quotes, applying for loans/credit cards/etc. all lower your score slightly.

Only buy what you can actually afford and always make your payments on time. A few late payments can really affect your score, this includes cable TV, utility bills, everything.

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I spoke with my loan agents about that actually, and she said the amount your score lowers when someone checks it is very small. It's when you have multiple people checking it, in a small period of time, is when you might actually notice. I had my credit report checked 3 times while I was looking for a home loan, by different agencies. That may have impacted my score a little. But checking it once a year, shouldn't noticably affect it. I usually check it once a year, to make sure I don't have any false accounts on mine.

Re: Credit information?
 

Your first problem is that you're asking financial questions on a car forum. If you take only one piece of financial advice from this site, let it be this:

For financial advice on the internet, go to a financial advice website.

If you have a question, post on the "your money" message boards on MSN Money ---> http://moneycentral.msn.com/communit...oard=YourMoney

If you're looking for more of a tutorial, try CNN Money. http://money.cnn.com/index.html?cnn=yes
Under Personal Finance, click on Money 101 (or just click here --->) http://money.cnn.com/pf/101/index.html And you should be able to find everything you ever wanted to know.

P.S. It's never a good idea to carry a balance on a credit card, it will not help build your credit. Credit card companies report to the three major credit beureaus once a month, usually around the time that they create your monthly statement. Whatever your balance is at that time, is what will show up on your credit report. It doesn't say anything about if you paid it off or not. If you look at my credit report, you might think that I carry a $200-$800 balance every month on my Discover card. But I actually pay it off every month and have not paid a dime in interest in years.

You personally can check your own credit report every single day if you wanted to, and it would not affect your credit score. What hurts your credit score is when others (credit card companies, banks, etc.) check your credit report i.e. applying for a loan or a card. The reason it hurts your score is because the score is calculated on many different factors, one of which, is how often you apply for credit. It's a very small factor, and will only affect your score by a few points though.

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According to the FICA site, my main "weak points" are the length of time I've had my accounts. I got my first credit card with Bank of America back in 2001, and that is my oldest account. It says typically people have their longest accounts being 15 years old. Well at my age, that's obviouslly impossible. So there isn't much I can do there, but just know that with more time, my score should go up. My second weak point was that my newest account was opened 8 months ago. And new accounts apparently have a negetive impact on your score. That account would probably be my circuit city 0 interest loan.

So looks like I'm doing well, I'm still in the mid 700 range. All I can do is just give it time it looks like, and keep on doing what I've been doing.

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I beg to differ. You can check your own credit score and it doesn't affect it. Only when others make inquiries. There is a difference.

Re: Credit information?
 

^I have heard differently, I guess my college proffessors were wrong. I was told ANY authorized inquiry.

Re: Credit information?
 

again guys, this is why i asked for CREDIBLE sites. So there is no dispute between "opinions." I appreciate the "info" but I won't change my ways for anything other than a credible place the specifically recommends doing so.

You asked why look on a car site? That's actually a dumb question.. when you have thousands of people mixed into one community, you are bound to find someone that has an idea of what I'm talking about.

If I posted this question on a money board, I'd likely get laughed off similar to if some noob comes here and says "what's a dsm" get it ?

thanks for responding though, I'll check out the links you left later on.

Re: Credit information?
 

I think it looks like the "someone that has an idea" would be Mark. You should probably take his advice, or at least consider it.

Re: Credit information?
 

It's the internet. You do not know who to trust and who not to. That is exactly why I wanted to find out information from a legit website so that I could pass it on to the next guy so as a whole, I can help people make better decisions.

I take into consideration any advice I've been given. That doesn't mean I'm not going to keep looking for more or better information.

Re: Credit information?
 

I have 3 .pdf documents discussing credit. Anyone care to host them?

EDIT:
Nevermind--> http://www.newyorkfed.org/regional/projects.html#gff
Scroll down to Get Financially Fit.

Re: Credit information?
 

Your college professor was wrong. Your credit score is not affected by your inquiries; it is affected by third party inquiries.

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I see that now, I did some researchin' today at work. Good thing I gave them so much money. Oh well, who knows, maybe that was one of the days I brought beer to class with me....or was that the vodka day? Meh, who knows!

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Things have changed alot in recent years chris. That may have been the "rule of thumb" a few odd years back.

Re: Credit information?
 

http://www.myfico.com/CreditEducation/

Best info I came accross was located here.

Re: Credit information?
 

Could be, a lot of them were old-school so who knows.

Re: Credit information?
 

Debt to income ratio is another thing they look at but completely different than debt to credit ratio.

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Yeah I thought you made an error before but I realized later on that it wasn't an error. I understand that it's two different things and important. :)

Re: Credit information?
 

Not having more than 1/3 of the credit limit on a credit card is one big thing. Even if it is a $500 credit card with $400 on it, that will look worse than a $5,000 credit card with $1,000 on it. If you know you are getting a loan soon in the future, get the balances moved around so you are ok on all your cards.

Re: Credit information?
 

I'm honestly just looking for new information I don't know about. This isn't anything trying to find out how to get a loan.. I'm already approved for 225,000 to buy a house. 6% fixed or 5.25 3year arm. I just was looking for ways to continue bettering it incase I ever want to refinance or get a personal loan to get great rates or whatever.

Re: Credit information?
 

That is a good example of credit to debt ratio. Makes a big difference.

Re: Credit information?
 

What you are approved for and what you can actually afford are two separate things. You seem like you've got a decent head on your shoulders, so you probably know that though.

Re: Credit information?
 

225k is pushing it as far as what we can afford. I'm buying together with one other person and renting to two people for 400-500 a month all bills included. No matter what I do, buying a house will be tough. It's my first one so many unexpected things will come up. Can't get around all of that!

Re: Credit information?
 

http://www.myfico.com/CreditEducatio...YourScore.aspx
http://www.myfico.com/CreditEducatio...Fallacies.aspx
http://www.myfico.com/CreditEducatio...uiries.aspx#30
Credit Card Ratings:
http://www.cardratings.com/

Re: Credit information?
 

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Good luck on the 225k house your first time around. I hope your renters do not bail on you.

~John

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I totally agree with that. This is my first house as well. My point of view on it was to purchase something that I can afford, on my own. And then at some point possibly get a roommate, because it wouldn't hurt to have someone help with the mortgage. But people move on to bigger and better things. So I didn't want to have to rely on a roommate's money to afford my home. My loan was for 168k, and that loan is quite a handful to take care of on my own, I can't imagine 225k. But good luck with it man. Everyone's situation is different, so just make the right choice for you!

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It's amazing how inflated home prices have got the last few years. The only people who can afford them without going broke are the ones who bought a house 10 years ago and can now sell it for triple what they paid.

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Pricing on houses is DOWN right now. It's a buyers market and at 6.0% fixed rates, you can't really go wrong. I'm not relying on renters to pay the bills, I'm relying on them to let me live more comfortably. I could afford to pay for it without them but life would suck. Overtime is always available if I need it.

For the record - That money is already considered mine. So those of you that don't think the same as I do, You're wrong! :) As I said before, knowing people is a great thing.

Also - I don't need to spend 225k on a house. I just know that's the limit. If I find something worth the cash struggle, i'd pay up to 225k. Otherwise I'm looking to keep it down around 200 or less.

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LOL, i'm not picking on this guy in any way tho. They need to make a course on credit knowledge in high school mandatory that is for sure.

I'm obviously gonna ask my bank these questions but i think its always a good idea to talk to people that won't be looking for my money. I've never abused my credit card and I keep getting increases in my line of credit. I never have had a loan. If I pay off a $10,000 motorcycle in 3 years That would most likely leave me with decent credit right?

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Holy old thread Batman!!!

Re: Credit information?
 

Its not about how fast you can pay it off... Its actually better to make just about every payment, maybe paying $25-$50 more per month if you are looking to pay it off sooner. This is if you are trying to build your credit.

And yes, whats with the old thread...

Re: Credit information?
 

I can haz search button.