Credit score tips that don't make sense
If you want to have high credit scores -- which can mean lower loan rates -- then you'll need to do some things that don't sound quite right at first.
This post comes from Jason Steele at partner site Money Talks News.
You pay your bills on time, so you expect good credit scores, right? If only it were that simple.
In fact, your credit scores are determined by a number of different things, not just your payment history. Here's where it gets downright strange: Some of the ways to improve your credit don't even make financial sense:
By opening up more than just one or two credit cards, you can increase your available credit and reduce the percentage of credit used. In the same way that having more credit cards reduces your overall credit usage rate, asking for a higher limit will also achieve the same effect.
The simple explanation is that your balance on any given day is reported to the credit bureaus as a debt. I'll still pay my balance only on the due date, but I might pay earlier or avoid using credit cards if I was trying to raise my scores to get a home loan.
While credit scores are determined by mysterious recipes that are never fully disclosed, FICO and others give us many clues about what ingredients are included. By understanding how the credit agencies view your finances, you can make the best decisions to maximize your credit scores.
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No mystery here: Credit scores are meaningless to consumers. They are designed to show banks whether a profit can be made from how you use your credit. If you have no outstanding debt banks can't make money from you, therefore your score is lower than someone who always carries a balance.
Adding insult to injury there's now a whole industry designed to make consumers purchase their credit scores, which are unlikely to be the scores the banks use anyway.
The "credit companies" are just a rip off, nothing more. I pretty much just save for what I want and pay for it in cash. I have NO debt whatsoever. I like my life that way.
Home...paid in cash.
2 cars...paid in cash.
I have ONE credit card that I use only if I have an emergency..which I rarely use.
My extra monies all go into savings/TSP for my family and their future.
Basically, I've told the credit bureaus to go F themselves. I don't need them, I don't need their fake scores, and I don't need to buy their phony services either.
Any time you try to buy a car, house, get a loan, anything, you go in armed with your latest credit scores that you bought online...and then you get the excuse, "oh, we don't use those scores. we have other scores they send us that we use."
So if you paid your hard earned money for something, then as a consumer, the item you paid for should be the reflected and true item in an honest representation.
Congress has been coddling banks and credit companies while we suffer. Plain and simple.
BTW...I'm hoping and praying that BoA falls on its **** and dies like it should have years ago. I didn't get a bailout...neither should Corporate America. Rise and fall on your own merits.
FICO is a scam. It doesn't show your net worth or your character. All it shows is that you are willing to get in debt and stay in debt for a long time to get a stupid 3-digit number attached to your identity.
Think on this: I can have $30 million in the bank. No credit cards, no home loan, no car loans. But I couldn't rent an apartment and would get turned down for a car lease. I could buy the whole apartment complex or the car dealership, but I wouldn't get past the finance guy for something that small.
They may as well call it an "I am a financial slave" score.
i buy everything with CASH..if i cant afford it, i dont buy it...period
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