I don't see why the credit score thing really matters, unless it reveals serious financial mismanagement.
I don't see why the credit score thing really matters, unless it reveals serious financial mismanagement.
Agreed. Im about to pay off my mortgage and my 800+ credit score will go to 0 within 6 months I was told. A good FICO score only proved your good at being in debt.
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False. You were told wrong. Good Credit, Bad Credit, Judgments, Repos all stay on your report for 7 years. Several factors build up your score, about 35% is based on credit history, 15% length of established accounts etc. I spent 2 years reading over people's credit reports everyday and I'll tell you the number is just a small piece of the puzzle.
So my 800+ score (no negative credit issues) will remain 800+ for 7 years?
That I do not know. I do know that the mortgage will appear as paid in full on your report for 7 years. Any other Credit that you have may also be in there if that institution reports to the 3 credit bureaus. The number is just a mathematical formula based on what is in the file. Get this, part of the formula used to deduct points everytime your credit was pulled. It no longer is part of the score but is listed in the file.
Well accordiing to my financial adviser, the score goes away pretty fast once you have no more lines of credit open. I have no CCs or car loans, only debt is the mortgage. So yes a 7 year record of activity would sound right but I'll see what the actual score does when I become 100% debt free this spring.
Congrats! That's a hell of an accomplishment. Far from there myself. Yes it will be interesting to see what happens. I know one guy has a high interest saving account that he borrows against and puts in savings. It's a great way to keep his credit strong. The net interest rate is through the floor and has quick access to cash if he needs it. If I become dept free that will be my plan, but I'm 20 years from there.
Never heard of such a thing. Not sure I follow you?
But I dont need to maintain a CS because I wont be going into debt again. I can pay cash for things so easily with no payments in the world.
So what I mean by that is using a savings as a collateral for a loan. Some banks do it some do not, you also have to get favorable rates to be worth it. But when you borrow against your own money you get a much lower rate because there is no risk to the bank as the funds are there. An example (hypothetical %) of this is - let's say you have a 5 year CD that pays 2% APY. You could borrow against that for 3% APY. So the net of that is having a loan at 1% APY. So you could have cash at a low interest rate or if you put it in savings account that nets 1% APY. it's a wash. The only reason you would do this is if you needed emergency cash at a very low interest rate without tapping into your savings. Or to establish, build, or maintain credit without really going into debt.
Again it's awesome that you will be debt free! Credit reports are used for much more than credit/dept but often it's looking at the file rather than the number. I know some utilitiy companies do not require a deposit for people with great credit etc.
Yeah I know but theres nothing I can think of there worth paying a dime for to keep a high credit score.
That whole borrowing my own money at any interest rate is ludicrous to me. No offense.
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