• We’re currently investigating an issue related to the forum theme and styling that is impacting page layout and visual formatting. The problem has been identified, and we are actively working on a resolution. There is no impact to user data or functionality, this is strictly a front-end display issue. We’ll post an update once the fix has been deployed. Thanks for your patience while we get this sorted.

PSA: Want to get LOWER credit score? This is how you do it

I work with a lot of people right out of school and the number one offense I see is paying late. For some reason they don't think it has any implications beyond a late fee. Then they find out their APR which was 11% got jacked to 25% or more. Close behind is overextending themselves by only looking at monthly payments, then coming to the realization that they have no cushion and any little blip in the cashflow will cause big problems.

One example was a guy who got hired after graduation. Bought a ridiculously big new truck with all the bells and whistles (and put almost nothing down). A few months later, his roommate decides to move away and he can't afford to pay the rent by himself. I asked why he couldn't handle a few months of $500 more in rent until he found a new roommate. Answer: no savings, and he was maxed out on school loan payments and his truck payment. He was making $65,000 a year and could not swing 6 months of the extra rent (total $3,000).

So he goes back to the truck dealer and explains he can't afford the truck and needs to trade it in for something cheaper. The dealer says sure, just come up with the remaining loan balance after subtracting the trade-in value... a balance of $8,000. Ended up having to keep the truck and borrow from his parents to cover the rent until he got a roommate. And is still living on the financial edge.
 
kranky said:
I work with a lot of people right out of school and the number one offense I see is paying late. For some reason they don't think it has any implications beyond a late fee. Then they find out their APR which was 11% got jacked to 25% or more. Close behind is overextending themselves by only looking at monthly payments, then coming to the realization that they have no cushion and any little blip in the cashflow will cause big problems.

One example was a guy who got hired after graduation. Bought a ridiculously big new truck with all the bells and whistles (and put almost nothing down). A few months later, his roommate decides to move away and he can't afford to pay the rent by himself. I asked why he couldn't handle a few months of $500 more in rent until he found a new roommate. Answer: no savings, and he was maxed out on school loan payments and his truck payment. He was making $65,000 a year and could not swing 6 months of the extra rent (total $3,000).

So he goes back to the truck dealer and explains he can't afford the truck and needs to trade it in for something cheaper. The dealer says sure, just come up with the remaining loan balance after subtracting the trade-in value... a balance of $8,000. Ended up having to keep the truck and borrow from his parents to cover the rent until he got a roommate. And is still living on the financial edge.
Click to expand...


WTF how does loans, car payment, and $500 rent eat up a 4k - 5k paycheck a month?
 
Here's a question. I have only one credit card with a low limit. I use it for everything, so I'm constantly running into the limit to the extent that I have to pay it off every week to continue using it. I'm running several times the limit through this card every month. Does that look good or bad to a credit reporting agency?
 
SlitheryDee said:
Here's a question. I have only one credit card with a low limit. I use it for everything, so I'm constantly running into the limit to the extent that I have to pay it off every week to continue using it. I'm running several times the limit through this card every month. Does that look good or bad to a credit reporting agency?
Click to expand...

if you pay it off every month, it makes no difference.

credit utilization only matters for revolving credit
 
SlitheryDee said:
Here's a question. I have only one credit card with a low limit. I use it for everything, so I'm constantly running into the limit to the extent that I have to pay it off every week to continue using it. I'm running several times the limit through this card every month. Does that look good or bad to a credit reporting agency?
Click to expand...
Depends on when it's reported but probably not good. Will look like you can't manage your $$ if the balance is continually high. Try and get the limit raised.

@Max: If they're reporting on the 1st and he's paying on the 5th, by the due date, he can still take a wack. Easier to try and get the limit raised and not worry about it.
 
Last edited:
The last late payment I've had on my accounts fell off last month. My credit score went up 20 points.
 
SlitheryDee said:
Here's a question. I have only one credit card with a low limit. I use it for everything, so I'm constantly running into the limit to the extent that I have to pay it off every week to continue using it. I'm running several times the limit through this card every month. Does that look good or bad to a credit reporting agency?
Click to expand...

Bad. One of the things they look at is how much credit you have and how much you're using (utilization). I'm surprised your CC hasn't offered to up your limit yet. Call them they probably will as long as you been making all your payments. How years have you had the card?
 
xSkyDrAx said:
WTF how does loans, car payment, and $500 rent eat up a 4k - 5k paycheck a month?
Click to expand...

No idea. He didn't explain his other obligations - I was just very surprised that he didn't have ANY money set aside, and he could not handle a relatively modest increase in monthly costs for a few months. I would have thought he could have cut costs/deferred purchases/who knows what else to make up the difference.
 
JTsyo said:
Bad. One of the things they look at is how much credit you have and how much you're using (utilization). I'm surprised your CC hasn't offered to up your limit yet. Call them they probably will as long as you been making all your payments. How years have you had the card?
Click to expand...

If you've been paying it off it shouldn't be too bad. You can also apply for another card and that will count towards your maximum credit limit and you can at least spread the credit utilization per card so one card isnt overloaded.

If you've had the card for a while (and have been good with it) the next one you apply for should have a larger limit than your current one especially if they have not extended your limit.
 
JTsyo said:
Bad. One of the things they look at is how much credit you have and how much you're using (utilization). I'm surprised your CC hasn't offered to up your limit yet. Call them they probably will as long as you been making all your payments. How years have you had the card?
Click to expand...

I've had it for one year. It's my first card, actually. I've been requesting credit line increases every few months. My credit score isn't great though. That may be what's keeping them from giving me any sizable increases. My credit score has gone up something like 50 points since I got this card though, so maybe that'll change in the near future.
 
ultimatebob said:
This is ATOT... I thought that everyone here made $250K a year and had an 850 FICO score.
Click to expand...

Wow... wait to aim low. I thought everyone here made in excess of seven figures, had no less than 2 supermodels (neither having pointy elbows) hanging off their arms and had credit scores OVER 9000!!!!

SlitheryDee said:
I've had it for one year. It's my first card, actually. I've been requesting credit line increases every few months. My credit score isn't great though. That may be what's keeping them from giving me any sizable increases. My credit score has gone up something like 50 points since I got this card though, so maybe that'll change in the near future.
Click to expand...

D: Holy shit dude - you do know that each credit line increase usually means an additional HARD credit inquiry on your credit reports, right? And those are a BAD thing.
 
SunnyD said:
D: Holy shit dude - you do know that each credit line increase usually means an additional HARD credit inquiry on your credit reports, right? And those are a BAD thing.
Click to expand...

I received assurances that they would perform a soft pull that wouldn't affect my score. I check my score every few months as well, and what they told me seems to be true.
 
SlitheryDee said:
I received assurances that they would perform a soft pull that wouldn't affect my score. I check my score every few months as well, and what they told me seems to be true.
Click to expand...

Wow, interesting. Both Amex and CapOne did hard pulls on my accounts. Amex for when I asked for a line upgrade, CapOne for when they upgraded my line without me asking. :colbert:
 
ultimatebob said:
This is ATOT... I thought that everyone here made $250K a year and had an 850 FICO score.
Click to expand...



But Ultimate Bob ... they do!

I've interviewed a number of managers at each CU or bank that I've had accounts at over the years (they are good indicators) and the fact is (from their perspective) is that the "average" American lives paycheck-to-paycheck, has little savings, has no emergency fund and is in significant debt.

It must be thrilling to be an "average" American ...
 
Corporate Thug said:
I thought a late payment was usually not counted against you unless it was 30+ days late???
Click to expand...


This. I've been 'late' a few times but only 1-2 days past the due date. I was always scared that would count against me since I've been penalized for it.

I pulled my credit report a few days ago and my history is clean from all 3 agencies so I'm guesing what Corporate Thug said is true.
 
Corporate Thug said:
I thought a late payment was usually not counted against you unless it was 30+ days late???
Click to expand...

It all depends on the creditor and how/when they report.

Most CC companies will dock you after about 15 days. Most non-revolving debts only dock you after 30 days. Things sent to collections usually get reported well after 90 days. Some installment accounts report whenever they feel like reporting. For example, my student loans show perfect repayment history, though I know due to some confusion at various points I've been well over 30 days late on a payment here and there.
 
Svnla said:
Since many of ATOTers kept asking how to get HIGHER score, this could help by NOT to do these things below.

1. Opening Too Many Accounts at Once

2. Missing One Payment (or late)

3. Closing an Old Account

4. Maxing Out a Single Credit Card

5. Racking Up a Bill Right Before Your Statement Closes

6. Not Checking Your Credit Report

7. Ignoring an Account That Has Gone Into Collections


http://finance.yahoo.com/news/7-small-mistakes-that-will-hurt-your-credit-score.html
Click to expand...

you forgot the most important one. having no revolving debt is a sure fire way to have a low credit score.

the biggest myth i see on this forum is a high FICO Does Not Equal Financial Fitness


Your FICO score is solely based on the following criteria:

35% is based on debt history
30% is based on debt level
15% is based on length of time you’ve been in debt
10% is based on new debt
10% is based on type of debt
 
Last edited:
You must log in or register to reply here.

TRENDING THREADS

Back
Top