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| doesn't guarantee you have good credit
The "Paying off credit cards thread got me thinking and reminded me of a situation a friend went through. As a few of you know my friends and family call me a "credit geek" and am a firm believer in pulling your Credit Report once a year to make sure everything is "in line". I remind them every year. I have a good friend that use to always say "I have really good credit" I would say have you pulled your report this year? His response would be "yes, it shows everything in good standing, all paid on time" So my next question was "Whats your score?" I almost fell over when he said " I don't know, they wanted $6 or $7 each so I figured that since everything showed paid on time that means I have good credit so it didn't matter" I told him he needed to get the "numbers" so he could either skip eating out one night or I would pay the less than $20 if he was going to be such a "bozo" but get the numbers. lol this is a really good friend so I could "bully" him a little. Imagine my surprise when he called me yelling "What is this crap, my credit score is 628 I pay my bills on time, I should have a higher score than that" I told him if he stopped yelling we could take a look and find out the situation and fix it. It turned out that he had 32 !!! 32 open accounts with a couple hundred here, a few hundred there. He did have a couple biggies but a majority were the local store cards. His reasoning with the store cards was "well it is easier" I told him that the "easier" has reduced his credit score and it was time for a plan. Especially since he wanted to buy a new house with in the year. He had just received a commission check so we used that to pay off the small store cards then he closed them .(this is one time when closing cards was important) We also called the "biggies" (major credit cards) and requested to have the interest rates lowered. He took the small payments he was making to the "store" cards and added it to the payments to the "biggies" which help pay them down faster. Fast forward 1 year later his Credit Score was a nice 720 and he was able to start house hunting knowing that with his actual "good credit" that he will get a good mortgage rate. So I thought !!!! This post is long enough so I wont "bore you" with the details But take me going on a cruise the week he is to sign the papers add in one "look what I can offer you " loan person and the words words "good deal" mix them all together and you get "An adjustable rate interest only mortgage" Yup he did lol . I have to laugh because if I don't the temptation to "smack him upside the head" would be to great So now a year later his monthly payment has gone up $200 a month and we are in the middle of "fixing" his latest "venture" into the land of credit. The only good thing about this is he has become more credit "savvy" and knows that "a good deal" is not always that and most important "just because you pay your bills on time doesn't mean you have good credit So folks get your credit reports once a year and pay the extra to get your scores. Karla |
Follow-Up Postings:
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| Thanks Karla for your gentle remender that I need to pull my repost 'and' credit score sometime soon. Yes, I agree, so many folks really don't know enough to be even handling their own affairs. They are continially taken in by those offering 'great offers'. I have one friend who has made so many costly financial mistakes, that she finally said she would consult me on any purchase, or contract over $200. "An adjustable rate interest only mortgage" Fools and their money are soon parted...or so they say. Sue |
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- Posted by harriethomeowner (My Page) on Sat, Nov 4, 06 at 13:10
| Question: Is this the correct official site for requesting your credit report? Thanks. |
Here is a link that might be useful: Annual Credit Report
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| Harriet - Thats the one my Dh uses and it was accurate Sue - all he heard was "good deal" and his common sense went right out the window. I have been "on his case" for the past year to refiance it. He has been "talking to various mortgage brokers" lol I finally said to him last week "are you done messing around"(well i used a stronger word than messing but this is a family site) are you ready to listen and it finally sank in that he should call the current mortgage company and see what they can do. I am happy to report that he called me today to let me know that he is refiancing it to a FIXED 6.5 % !!! ring the bells lol I told him if he walks out with anything but that, there would be "he**" to pay. hey I have an idea |
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| I was confused at first because I misunderstood what you meant by "paying all bills on time". I see you mean paying the MINIMUM due and carrying a balance. I thought you meant paying the balance due on time! I wonder what percentage of accounts are paid in full every month? Is there some positive financial reason for not doing that? (You have money invested that is earning MORE than the credit card charges?) If you are NOT going to be applying for credit anytime soon, it seems to me that it is adequate to just get your report without a score -- right? (Especially if you do pay every balance due on time?) |
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| 6.5 sounds high, rates are down |
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| Chisue yes if you aren't planning on any new credit purchases with in 6 months just getting just the report is fine. However if you haven't gotten you score in a couple years or more it's not a bad idea to get it so you can have a "baseline" saphire |
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| FWIW, it probably was not the number of open accounts that hurt your friends credit score. It was most likely the number of credit inquiries from opening the accounts. For those people who have balances on their accounts, closing accounts can actually decrease credit scores as it causes credit utilization percentages to go up. I do agree that if someone doesn't have any balances that it can make sense to close accounts just not to leave them out there. But alone it usually won't do much to the credit score. |
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- Posted by jaceysgranny (My Page) on Thu, Nov 30, 06 at 1:50
| Is there a catch to checking your credit rating at the link noted above? Any joining fees that will show up after you've given them all of your information? |
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| it is free unless you want your actual score then it is around $6 or $7 if you are not aware of your credit score I would pay so you can have a baseline for future reference Karla |
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