This isn't really true. To make a big purchase like a home, they want to see behavior. You think this is flawed? If I take out a credit card, spend $100 and pay it back you believe that should give me perfect credit? If a bank wants to give me $250,000 you think me showing that I didn't go crazy with $100 should prove to them that I'm responsible? Let me ask you this. You don't know me from Adam. If I were to ask you fro $10,000 grand and tell you "Hey you can trust me! My co-worker gave me 50 cents for a coke once and I paid her back that same week!" would that make you cool with the loan? However, getting a credit card doesn't require good credit. Go get a credit card and use it for something like getting gas every month with the stipulation that you pay it off each time. Don't use it for anything else. You're honestly best off getting two cards and avoiding piling debt on them. Your credit will slowly build over time. But I completely disagree that it is wrong or flawed or slavery for a credit score to count how long you've had your credit cards, whether you've been responsible with them, etc. Also, anyone telling you that you will be hurt by paying off your debt is wrong. The best thing to do is keep two credit cards, use them for small purchases and pay them off each month. The cards will usually be reporting to the credit agency that you have a balance before you pay off and that cycle will continue. (it isn't like an instant report once you pay off) The most important factor for your revolving lines is payment history. When you look at your report it will say "paid on time" for each month the account is open.
No problem. Working in the tax field (I'm actually at work now ), I'm obsessed with stuff like this, finances, retirement, etc. Always happy to help out a fellow ClutchFan.
Im 23 and what is a good credit score? In all seriousness though. I think it is stupid that I get penalized for being young and not having enough debt accounts opened (credit cards, loans, etc.). But when I try to get those debt accounts up, I get penalized for having too many inquiries (which I understand). So it's like a catch 22 if you are young. I mean my credit is fairly good (from what I am told) for my age and circumstances, but I hate being potentially handicapped for put in a disadvantage just because I dont have 10-20 years worth of credit history. Just because I am young doesn't mean I am irresponsible. Credit can be a wonderful thing, helping those without money to afford to pay for things over time (house, car, etc.). It can also help those who are more fortunate to invest their money wisely (instead of paying straight cash, homey. They can make payments and invest the rest into stocks, business, etc and have the difference become a profit). It can also be a terrible thing! People will live/die by their credit score. Doing anything to boost it, or get sh!tted on if its bad. An almost impossible task for most if it's below a 600. Crazy world we live in.
Well, ok, perhaps I may have gone too far... but that was what first came to mind to respond to his "this is slavery" comment. I meant it as an exaggeration, too. He just doesn't know how to compare it. He has changed his tune: he calls it indentured service.
I was actually referring to pizza da huts comment, not yours. He's using slavery in such a nonchalant way that it makes you wonder if kids today are just programmed differently. Their world view certainly is. If he really wants to see propagation (and control of a human being) he needs to watch birth of a nation. if all I had to worry about was a credit score growing up, I think I'd be okay with that, not that I am black or anything, just in general.
credit scores are a snapshot of your spending habits and financial history. the actual debt you accrued is indentured servitude. but for the most part, that debt was your own fault.
There might be something lost in translation here. I'm not saying that if you pay everything off at a time your credit score should be perfect. I'm saying let's say you let something slip. Let's say I max out an $800 credit card and don't pay it back for a year, I default on it. When I pay it back, realistically with interest and fines that debt goes up to roughly $1400 at least. I pay the credit card company $1400 now where is my credit? Is it back where it started? No. Not even close. I'm not saying after a default I should have perfect credit, I'm saying the scoring system itself is flawed.
Yes and no. I have only student loan debt, but honestly we are starting to live in a world where debt is becoming more and more necessary. In this country debt is really viewed as a necessary evil, and even at times it's viewed as a good thing.
Get credit cards. Use them for items you normally pay cash. Pay them off in full every month. Don't buy things that you cannot afford to pay off in one month.
if you loan your buddy 500.00. He promises to back you next week, but he defaults on it. Eventually, he gets around to paying you, but it took 1yr. He pays you 100 dollars extra even for being a swell guy. So, what your telling me, is that you view this buddy of yours exactly the same way as you viewed him before you loaned him the 500.00. That the bank is open for business with him again because he paid you finally? credit scores are based on a composite of information about the likelihood of you paying the money when you are supposed to pay it back. if you are slow to pay 1 month, and with 1 card, you are viewed differently than if you are don't pay 5 cards until 1 yr later. So, forgive me if I don't quite understand what you are talking about.
student loans and medical bills notwithstanding, revolving credit card debt is never necessary. every purchase you make is a choice. a new shirt, going out to dinner, a car, a house, cable, cell phone, etc. these are all choices you make and they all affect your bottom line. if your output exceeds your input you're in debt. beyond the basics of food, water, clothing, and shelter everything else is just excessive wants. i have friends who complain they are broke, yet every weekend they're out at the bar drinking or buying the latest Blu ray. they play the victim card a lot. "i need a raise. i don't make enough money....blah, blah, blah." want a raise and get out of debt? stop spending.
You defaulted on $800. Of course that hurts your credit. This is super bizarre to me that you find it "flawed" that you defaulting for a year and then paying it back should not leave you with a bad record. What if that was a home loan that you defaulted on for a year? The reason a credit score exists is to show a future lender what your reliability is. If you couldn't be counted on to be responsible with the $800, why would you be responsible with $180,000?
I don't see how you can't see anything wrong with this. If I let you borrow $800 thinking you are going to pay me back in full in a month, I'd be pretty pissed off if it took you a year to give me back my money. I sure as hell would not consider letting you borrow money again.
I have a problem with this definition of good debt. Simply put, good debt puts money in your pocket, bad debt takes money out. If you are renting a house and your mortgage is $1000 a month and you bring in $1200, that is good debt. Being able to take tax writeoffs from debt does not automatically make it good, especially when people often don't qualify to deduct. I do understand how you can make bad debt into good debt, such as a 2% student loan. Sure, its better to pay the min. on that debt if you are are getting better returns elsewhere, but lets face it, using that extra $100 on a monthly car payment to get a fancier car when you could be paying down other debt is not the wisest idea.
The definition of slavery is not out working the produce fields in the hot sun 24 hours a day while Masta beats you with a whip all day long.
dude, what the hell are you talking about. first of all, you need to stop using racial slang to make your point. We are not back in slavery days, so I think we can ALL respect the men and women that endured that institution by not making jokes at the expensive of their dialect. You got me?
