CNBC article on "Establish a good credit rating, and hold onto it"

RossMAN

Grand Nagus
Feb 24, 2000
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http://moneycentral.msn.com/articles/banking/credit/1341.asp

No wonder my credit score (748) is higher than I thought (683). I have done almost all of the following:

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The Basics
Establish a good credit rating, and hold on to it
For years, cash was king. Paying with cash was a sign of success and stability. No more. Credit now wears the crown in America.
By Mary Rowland

Credit now wears the crown in America. Today you need a good credit rating to buy a home, to get a good job or a preferred rate on your homeowner's or life insurance policy.

That makes establishing credit and monitoring your credit rating one of the most important financial tasks you face. Fortunately, it's not difficult. But it's just as easy to get off on the wrong foot if you don't know the rules.

Credit issuers have broad leeway to develop their scores based on their experience, provided they don't discriminate against people because of their sex, race, age, religion or national origin. A credit issuer may use age as a criterion of a scoring system if, for example, past experience shows that those in a certain age group are less likely to pay their bills.

That's what credit scoring is: A compilation of the lender's experience in issuing credit translated into a scoring system. For that reason, it can be difficult to know precisely how any one lender will judge you. But here are some of the characteristics that will help you get a higher score, according to Detweiler.

Pay your bills on time That still counts. What might trip you up though, is that paying even a few days late puts you in a different category. Ditto with the mortgage payment. Most mortgages offer a grace period of 10 or 15 days after the due date before your payment is officially late and you?re charged a late fee. But for scoring purposes, if you?ve not paid by your due date, you?re late.

Own two to four credit cards. Less is bad; so is more, according to most scoring systems, Detweiler says. Keep a checking and savings account.
If you have neither, you?ll have points deducted from your score.

Keep your debt-to-income ratio under 20 percent.

Make infrequent requests for additional credit. Your credit file shows how many inquiries have been made about you recently from credit issuers. If there have been more than four over the past year, that's a strike against you, Detweiler says.

Stay put. If you've been in your current home for four years or longer, and with your current employer for five years or more, you rack up points.

Lenders also look at your spending behavior. For instance, how close are you to the limits on your various cards? How many cards do you use? What do you carry in balances?

If your report contains errors, write to the credit bureau immediately. Explain what's wrong. For example, suppose your record indicates that you have an account at Nordstrom's that is overdue. In fact, you have closed your account at Nordstrom's and owe nothing.

In your note to the bureau, be specific: "I closed my Nordstrom's account in 1994. The balance is paid off." If you are in a hurry to get the matter cleared up, you might write to the creditor also. That's what I did when I wanted to get my mortgage approved. The creditor sent a letter to the credit bureau stating that my account was closed and paid in full. I got my mortgage loan.

Many of the things that count against you are the obvious ones: late payments, court judgments, an account that was turned over to a collection agency and, of course, bankruptcy.

There are pros and cons to the credit scoring system. On the plus side, it eliminates discrimination because approval is based on raw numbers. On the other hand, the scores don't take into account consumers who have exceptional circumstances. If the score is too low, they're turned down. Still, you must understand how it works if you're going to get it to work for you.

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vi edit

Elite Member
Super Moderator
Oct 28, 1999
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Decent article besides this:

<< Today you need a good credit rating to buy a home, to get a good job >>



I have NEVER had a credit check a requirement for employment and I have worked in some positions where I was privy to some VERY sensitive data and financial records.
 

RossMAN

Grand Nagus
Feb 24, 2000
78,855
355
136


<< Decent article besides this:

<< Today you need a good credit rating to buy a home, to get a good job >>



I have NEVER had a credit check a requirement for employment and I have worked in some positions where I was privy to some VERY sensitive data and financial records.
>>



I agree that's total B.S., my job could care less what my credit rating is.

However more and more insurance companies are pricing insurance policies based on credit score which has it's pros and cons. Fortunately for me I went from $140/month to $70/month with American Family Insurance (amfam.com) after 6 months of clean continuous insurance with them, authorized them to check my credit and seconds later my premiums were slashed in half.
 

TomC25

Platinum Member
Oct 12, 1999
2,120
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wow I didn't know paying my mortgage payment on the 5th or 6th was bad when it is only late to my lender after the 15th. :Q

Guess I need to start paying my mortgage BEFORE it is due.

By the way, I really don't know much about credit, so is 703 a decent score?
 

RossMAN

Grand Nagus
Feb 24, 2000
78,855
355
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703 is a good credit score.

I currently have 5 cc's I need to payoff and close 2 cc's.

Also my DSR (debt to service ratio) is pretty high around 40% maybe 50%, I need to try and reduce that to at least.

I need to stop applying for new credit which isn't that difficult. I resisted the temptation to apply for any credit for a whopping 1 year!

Last but not least I need to get myself banned from AT so I stop spending money on Hot Deals and reduce my cc balances.
 

pyonir

Lifer
Dec 18, 2001
40,855
319
126


<< Decent article besides this:

<< Today you need a good credit rating to buy a home, to get a good job >>



I have NEVER had a credit check a requirement for employment and I have worked in some positions where I was privy to some VERY sensitive data and financial records.
>>


a job in law enforcement generally requires a credit check.
 

Ameesh

Lifer
Apr 3, 2001
23,686
0
0


<<

<< Decent article besides this:

<< Today you need a good credit rating to buy a home, to get a good job >>



I have NEVER had a credit check a requirement for employment and I have worked in some positions where I was privy to some VERY sensitive data and financial records.
>>


a job in law enforcement generally requires a credit check.
>>



ive had a couple of credit checks at previous jobs.
 

RossMAN

Grand Nagus
Feb 24, 2000
78,855
355
136


<< ive had a couple of credit checks at previous jobs. >>



If you don't mind me asking what kind of jobs were these?
 

StageLeft

No Lifer
Sep 29, 2000
70,150
5
0


<<

<< ive had a couple of credit checks at previous jobs. >>



If you don't mind me asking what kind of jobs were these?
>>

I didn't know international arms dealer required credit checks :eek:
 

RossMAN

Grand Nagus
Feb 24, 2000
78,855
355
136
It took you 3 days to post to this thread, are you losing your touch?
 

ElFenix

Elite Member
Super Moderator
Mar 20, 2000
102,374
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<< I need to get myself banned from AT so I stop spending money on Hot Deals >>

;)

<--- has pretty good credit, but doens't know or care to know his score, other than "good"
 

Hammer

Lifer
Oct 19, 2001
13,217
1
81
I had background checks for job but never a specific "credit" check. Not that it matters, my credit is excellent.
 

glen

Lifer
Apr 28, 2000
15,995
1
81
If you are unemployed, but in medical school, wouldn't that help you obtain more credit?
 

RossMAN

Grand Nagus
Feb 24, 2000
78,855
355
136
Although a security check for employment might entail a credit check they are still two distinctively different kinds of checks, right?
 

iamwiz82

Lifer
Jan 10, 2001
30,772
13
81
I have a question. I have a joint checking and savings account with my girlfriend. She was the original owner and then added me. Since i am not the primary on the account, would that be marked against my credit report?
 

denali

Golden Member
Oct 10, 1999
1,122
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Well here is how I increased my credit limit on my CC. Quit job and traveled for a year, used CC in many foreign countries. When I come home I find out the credit limit had been raised. They also never seemed to question why charges were coming from all over the world, which is scary.
 

RossMAN

Grand Nagus
Feb 24, 2000
78,855
355
136


<< I have a question. I have a joint checking and savings account with my girlfriend. She was the original owner and then added me. Since i am not the primary on the account, would that be marked against my credit report? >>



Checking and savings accounts typically are not even reported to credit bureau's. Credit cards, car loans, home loans, personal loans, lines of credit, etc. are a different story.

So the answer is no. Even if your checking and savings accounts were reported to the credit bureau it would only be negative if you had a few NSF's (non sufficient funds - AKA bounced checks).
 

iamwiz82

Lifer
Jan 10, 2001
30,772
13
81


<<

<< I have a question. I have a joint checking and savings account with my girlfriend. She was the original owner and then added me. Since i am not the primary on the account, would that be marked against my credit report? >>



Checking and savings accounts typically are not even reported to credit bureau's. Credit cards, car loans, home loans, personal loans, lines of credit, etc. are a different story.

So the answer is no. Even if your checking and savings accounts were reported to the credit bureau it would only be negative if you had a few NSF's (non sufficient funds - AKA bounced checks).
>>



here is a quote from the article:



<< Detweiler says. Keep a checking and savings account.
If you have neither, you?ll have points deducted from your score.
>>

 

RossMAN

Grand Nagus
Feb 24, 2000
78,855
355
136


<<

<<

<< I have a question. I have a joint checking and savings account with my girlfriend. She was the original owner and then added me. Since i am not the primary on the account, would that be marked against my credit report? >>



Checking and savings accounts typically are not even reported to credit bureau's. Credit cards, car loans, home loans, personal loans, lines of credit, etc. are a different story.

So the answer is no. Even if your checking and savings accounts were reported to the credit bureau it would only be negative if you had a few NSF's (non sufficient funds - AKA bounced checks).
>>



here is a quote from the article:



<< Detweiler says. Keep a checking and savings account.
If you have neither, you?ll have points deducted from your score.
>>

>>



I've seen my credit report about a dozen times and never has it listed my checking and savings accounts but maybe they do have an impact on your credit score.

Like I said as long as your account is in good standing with no loss (no bounced checks) to the bank, then you should have nothing to worry about.
 

RossMAN

Grand Nagus
Feb 24, 2000
78,855
355
136
I forgot the website name but there was a Hot Deals thread and I had an Off Topic thread (both archived by now) which had the website name.
 

Bullhonkie

Golden Member
Sep 28, 2001
1,899
0
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Consumerinfo.com is where I had a free credit check done for my girlfriend a few months ago. You have to cancel the credit monitoring thing within 30 days (or whatever length of time it's free for), or they'll charge you for it. We had no problems cancelling it though, phoned in and within a minute it was cancelled and done. I think you can even cancel it online, I just prefer to call and make sure.