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  1. #1
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    A question about credit.

    I'm 27. I've never had a credit card, and I've only ever purchased one item on credit, and that was a TV last year. All I've ever made payments on are my car, medical bills and student loans.

    For some reason, I apparently have amazing credit. My bank has told me my credit score is more-or-less perfect, and anytime I go in to a store and go through the steps of possibly making a credit-based purchase, no credit problems ever arise.

    While I'm curious why the above is true, I'm more curious about this...

    What impact will it have to pay off a credit loan early? I get wildly mixed answers when I ask people this question.

    Typically, people tell me...

    1) It's bad for me to pay off a loan early because the whole point is to have a history of making steady payments on something.
    2) It's ok to pay off a loan after 12 months, but less than 12 see #1

    If I want to go buy a new couch tomorrow on my credit, is it better for me to simply pay it out until the bitter end, or is there no negative side to paying it off early?

    Anyone have some wisdom they'd be willing to share?

  2. #2
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    Re: A question about credit.

    In all honestly, if your credit is excellent; I don't think it will matter when you pay it off as long as payments are made on time.

    But if you're trying to build credit like me, the most important thing is consistency, and punctuality.... so I'm told...

    So far it's workig as Ive gained 120 pts across the board in the past 6 months.


    As another election draws near; the G.O.P. are yet again filled with a stupid confidence that the they will win the White House. What they don't realize about people like Trump, Carson, and Cruz is that their rhetoric only resonates within an echo chamber, but not the American people. They live in an illusion of falsehood and distorted truth and only seek information and opinions that confirm these beliefs and instantly reject anything that contradicts them because only their opinions matter. Their notion of freedom is freedom for themselves and those alike to them, but not the rest of the country which has changed.
    These are the reasons why the G.O.P is set to lose in 2016. And when that happens, rest assured that they will have myriad of conspiracy theories blaming everyone and everything from the liberal media, to Oprah, to welfare moms, and pretty much everyone but their own disgusting selves.



  3. #3
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    Re: A question about credit.

    Yeah, I'm generally concerned as it relates to my ability to be approved for a home loan. I assume there's a huge difference in being approved for 5-10k as opposed to 200k despite how good your existing cred it, I imagine they want to see a broad and timely credit history.

    In those past 6 months, have you just been making minimal payments?

    That's another aspect I consider. Is it more beneficial, as it relates to your credit, to pay more? The general consensus seems to be that the only thing that matters is that you make a payment.

  4. #4
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    Re: A question about credit.

    your credit score is good so just focus on NOT paying interest when you don't have to.

  5. #5
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    Re: A question about credit.

    at a certain point your actual score doesn't matter so much. if you have good enough credit, going up or down a little doesn't really effect your credit worthiness and the interest rates you can get with it.
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  6. #6
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    Re: A question about credit.

    Agreed, but what is the relationship between credit score and credit history?

    I have great credit.
    I have practically non-existent credit history.

  7. #7
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    Re: A question about credit.

    You do have credit in the form of loans which is a better than credit cards.

    One thing to watch (being that you seem to have a common name) is to make sure there is nothing erroneous on your credit. If another jdavis lives in your town. He may be responsible fr your good or bad credit more so than yourself.
    Last edited by JustinC939; 11-19-2010 at 04:11 PM.


    As another election draws near; the G.O.P. are yet again filled with a stupid confidence that the they will win the White House. What they don't realize about people like Trump, Carson, and Cruz is that their rhetoric only resonates within an echo chamber, but not the American people. They live in an illusion of falsehood and distorted truth and only seek information and opinions that confirm these beliefs and instantly reject anything that contradicts them because only their opinions matter. Their notion of freedom is freedom for themselves and those alike to them, but not the rest of the country which has changed.
    These are the reasons why the G.O.P is set to lose in 2016. And when that happens, rest assured that they will have myriad of conspiracy theories blaming everyone and everything from the liberal media, to Oprah, to welfare moms, and pretty much everyone but their own disgusting selves.



  8. #8
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    Re: A question about credit.

    http://en.wikipedia.org/wiki/Credit_score

    As Brandito stated, once you cross a threshold your score doesn't much matter anymore. I believe anything 750+ will get you the best rates for a home loan.

    That said, your credit score is only one factor in gaining approval for a home loan. Just as important to the bank is the projected payment versus your income. The best score in the world won't get you a $200K loan if you're only bringing home $25K per year. The bank will tally your obligations and allow you a loan payment no more than ~36% of your income, so keeping your revolving accounts at zero or low balance increases the amount you may borrow. Also note, the credit bureau will not report a zero balance on an active card even if you pay off every month. They will report the balance on your last statement, so buying a big ticket item on credit may show as a payment obligation even if you've already paid off the balance, as the credit report lags your actual credit accounts slightly. Doesn't matter to you if you have no credit accounts, but even buying that furniture on credit creates an account whether you have a "card" or not.

    Bottom line: Don't carry a balance simply to build your score. That's but a small part of the score, and for most it is not worth it. Maintaining an account (maintaining doesn't mean heavily using) over the long haul and never being late are key as these show consistency and discipline.

  9. #9
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    Re: A question about credit.

    Quote Originally Posted by myv65 View Post
    http://en.wikipedia.org/wiki/Credit_score

    As Brandito stated, once you cross a threshold your score doesn't much matter anymore. I believe anything 750+ will get you the best rates for a home loan.

    That said, your credit score is only one factor in gaining approval for a home loan. Just as important to the bank is the projected payment versus your income. The best score in the world won't get you a $200K loan if you're only bringing home $25K per year. The bank will tally your obligations and allow you a loan payment no more than ~36% of your income, so keeping your revolving accounts at zero or low balance increases the amount you may borrow. Also note, the credit bureau will not report a zero balance on an active card even if you pay off every month. They will report the balance on your last statement, so buying a big ticket item on credit may show as a payment obligation even if you've already paid off the balance, as the credit report lags your actual credit accounts slightly. Doesn't matter to you if you have no credit accounts, but even buying that furniture on credit creates an account whether you have a "card" or not.

    Bottom line: Don't carry a balance simply to build your score. That's but a small part of the score, and for most it is not worth it. Maintaining an account (maintaining doesn't mean heavily using) over the long haul and never being late are key as these show consistency and discipline.
    was going to add that they like to see accounts that you've had for a long time, but seems you covered that.

    i will say that you should try to use your open credit cards somewhat regularly, even for small purchases, just to keep the accounts open.

    i found out recently that bank of america closed my master card account with them because i hadn't used it in a while, that card had a pretty high limit compared to my other cards so that effected my credit a bit. not to mention it was one of my older accounts.
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  10. #10
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    Re: A question about credit.

    It sounds like I need to look in to actually getting a credit card.

    I've never had one before because I fear that despite what everyone says that there is still some hidden fee. Everyone assures me that as long as you pay off your credit at each month, and can maintain that responsibility and discipline, that everything is fine.

    That just sounds too easy!

  11. #11
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    Re: A question about credit.

    Oh there is a hidden fee, but it's a transaction cost paid by the seller. Everytime someone accepts a credit card for payment, the CC company nicks them for a transaction fee. It's one of the reasons you occasionally see gas listed with seperate prices for cash versus credit.

    For the consumer, finding a zero fee card is a no-brainer. For the consumer with the ability to always pay their balance and the discipline not to go overboard, it's more a question of what else would you like *besides* no annual fee. All have some sort of points program, whether it's cash back or something else.

    As if it hasn't been said enough, the key is to maintain that discipline and not bury yourself. Make a late payment or carry a balance, and you're flushing money down the toilet, and the CC companies just love that.

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