Since most people here are my age or older, can you guys throw out some numbers of what your credit score numbers are? Apparently, 300 is super crappy and 800 is really good? I have a 777 and was wondering if that was awesome for my age or just average? I use my Credit card for pretty much every purchase so thas likely why my credit is so high.

 

that score is great regardless of age...Mine is in the 750's just as a reference and I am 36.

 

That is AMAZING Danny. If you dont mind me asking, what card are you using. Im looking into getting one to "establish credit." Just dont know if I want one.

 

Damn good score Danny!!! Mine was 795 or 796 the last time I had a credit report...still trying for a "perfect" score of 850...:shifty:

 

That is an awesome score Danny.You could get a loan for almost anything with that.

 

I have no idea my credit score...

 

that's a great score. BUT being in the car biz has taught me a lot. It depends on how much credit you have also. You may have a high score BUT if you only have a few accounts it doesn't mean a whole lot. You can have 1 account and be a 800 but your not going to get any big loans becuase you don't have enough credit. Score is great but you also have to look at how many accounts you have. If you can, open some low interest cards and keep low balances on them to pay them off. That will help out a lot. honestly. People come in to buy cars and they can't becuase even though they have high scores, their credit history won't allow them to make that big of a purchase.

oh and with that said i'm working on mine. I'm in the mid 700's.

 

my score is a 677 right now..

i suk

 

Sure a 777 is a great score, but it does not tell the whole story as someone already pointed out.

BTW, I believe 850 is the max.

There are also different ways of calculating the score depending on the purpose of wht you are trying to get credit.

My credit score dropped about 80 points right after buying an investment property eventhough the property instantly made me over a 100 large on paper.

There is also such thing as having too high a score. Huh? you say? This is an indicator of not properly leveraging your credit and not using it to make money.

Look at it this way. Would you rather have a score of 777 and own nothing, or a score of 624 but have 4 rental properties which are all making you money. Or, a score of 624 with a bunch of credit card debt and cars loans. The person in the second example in most cases is in the best shape eventhough the score is the same as the last example.

 

Hmm. Very interesting. So Blake, any advice as to how to "start building" credit, as I want to buy a house within 2-2.5 years.

 

When I was younger in my 20's I opened up about 3-5 credit card accounts, got a personal loan and paid them every month ON TIME and paid more than what was due. The key is to have a few accounts of revolving credit and pay them on time and never be late!! This is how I built my credit and I have outstanding credit at this time.

 

Yeah MT is correct. You gotta make sure your credit is leveraged properly. My wife and I both are into the 750's with a mortgage, home equity line of credit, 1 credit card and 2 car payments. It's a fine balance of income to debit ratio, number of years with debt and how well you pay your bills. Be careful when 'establishing' credit. I tried to take the fast route and wound up screwing myself with 9 credit cards at the age of 19. Be careful of who you get cards from also. Some banks are all about taking advantage of younger card holders and will find every dirty trick in the book to get money out of you.

 

The only way to build credit is to get credit. My advice would be to open a few accounts and use them but pay them off each month. Things like car loans and paying them ontime help too.

Avoid store credit cards and having a particular credit card for a long time helps.

Suzy Orman has a website with programs you can buy for building and fixing credit. She has a system that shows you how to build credit points.

There are also many first-time buyer programs that banks have for buying houses. It is better to have no credit then injured credit....so just don't ruin it. I fyou have no credit, but income you usually can still get what you want.

Look at how many people have to rent homes. Sure, some do it for good reasons such as temporary living, but consider the numbers. A $100k mortage is about $600 per month. In most communities you can at least but a condo for a $100k. Why pay rent if you can buy. Many folks are paying more for rent then what it would cost them to buy a house because of bad credit. Then, condider the tax deductions when owning. The $600/month mortage is only like $450 per month when you consider the tax benefit PLUS you build equity two ways. 1 - By buying down the loan 2 - By the house appreciating.

There have also been a large increase in foreclosures recently. The vast majority are from low-income people who mistakingly bought a house recently and took a variable loan. They could afford it at 4.5 % but not at 6.5%. Don't make that mistake, but it is a good time to try to pick up one of these properties. Never use a variable loan to be able top afford something...use a variable loan because you think the rates will only drop and you intend to stay for less then 5 years in the house.

This is why I think it is soo sad to see a young person, with low income, and huge car payments and insurance. This is a deep pit that most people in these circumstances will never get out of. Sometimes you have to "defer" happiness for now so you can have more later. The car loan and especially the insurance is costing these people way more then they realize....and the costs are in "opportunity costs".

Let's say you have a $400/month new car loan and pay $250 for insurance. That is enough to buy about a $120,000 house after you consider the tax write-off. Where I live, properties are appreciating at 10% per year, so after owning that home for five years, it is now worth $195,000. What is the car worth....about $8,000.

Ammortized, that means that buying the house, you made $1250 per month during that time, or the NPV is about $800 per month after taking out the mortage payment and adjusting for tax benefit.

Sure, I am playing with numbers, Housing costs could increase or drop. But in most markets, lower prices homes always increase, just not at the same rate as high dollar ones.

Morale of the story....property is always a better investment then a car and if you have income and good credit, you can always get what you need.

Oh and BTW, if you are thinking about buying a house now...DO IT! In two years as you wait, that same house will cost you a lot more. Houses appreciate and interest rates are rising. If a house costs $100k today, it might be $120k in two years and rates could be 1% higher, meaning that the same house will cost a few hundred more per month to buy by waiting.

 

Hmm, VERY good info and advice Blake. Well, the car will be paid off by January, which makes me happy as hell. Not many kids can say they paid their first car off at 19 years old. So I guess I should look into getting into a smaller home at about 400 a month then? I have been paying between 3-1000 dollars a month on this car for the last 6 months or so, and it will be done by Jan, so I am pretty sure I can handle a house payment, but thats not the thing that scares me. What I might look into doing is buying a house and renting it out to pay the mortage + a little more for a year or two til im ready to move in. How do I go about buying a house without much downpayment, and how much SHOULD I put down at a minimum, because I dont want to try to buy one without a d.p. Thanks again, this knowledge is great.


BTW Sorry for hijacking your thread danny, Ill start my own.

 

haha its fine. I'm sure I dont have much credit. My entire history is my car loan(about $24000 total, still paying), a computer loan($500, paid off), and my credit card payments, which average about $1000 per month. I've probably spent about $13,000 total on credit card alone. And every payment I've ever made was on time.

As for my credit card...just your run-of-the-mill ebay mastercard. It's actually not affiliated with ebay in any way. I just get a point for every dollar to redeem for stuff. I'm at 10,500 points(I got it last august) and i dont plan on redeeming the points til it'd be for something useful.

 

HAHA I know what you mean about the points. I have that with my debit card and like 7k points is like a 5 dollar gift card...

 

EXACTLY!!!!! its ridiculous. I mean, the stuff around 100,000 points is nice, but right now, I could have $100 taken off my balance due, but thats for 10,000 points.

 

Wow, that kicks *** lol, even though, you are better off saving the points and paying the bill...

 

You don't need a dp for a house, but it has advantages. Remember a house is a leveraged asset, so in a gorwing market, you want to put as little down as you can.

Most banks like to see 20% down and you will get the best interest rates and you avoid PMI (mortgage insurance). This is added money to help the bank in teh event that you default.

I bought my first home (I still own it for another few weeks) with no money down. In fact, the sell paid all my closing costs. I signed the papers and got a check back at signing. I used my VA loan to do it, but there are always special programs for first-time buyers.

My advice to you would be to speak with a few mortage experts. Get advice from them even if you are not ready now, they can tell yoou what you need to do.

 

Damn good advise in both post Blake.

 

How does one check his credit score?......

 

I can check mine by logging into my credit card's website when I view my balance. But other places wont let u view yours. it varies

 

Not me!!!

 

When I transfered over my car loan before my credit card, it was 680.
Dunno what it is now.

 

Google "free credit check". There are sites that allow you to do this. If you don't pay the fee, you will get your score but not all the details. Otherwise, pay the fee and will will get loads of data.

 

I've actually heard that checking your credit score multiple times actually hurts the score. I dont remember why exactly, but i heard it from a few reliable sources

 

I dont think doing an inquiry on your own account (meaning asking for your credit report) hurts your score but having lending institutions doing many inquiries will certainly hurt your score such as if you go an apply for 5 loans in a month will have an impact on your score.

 

I agree with Blake, I bought a brand new house in October 2004, when the rates where insanely low. My interest is 5.25% on a 30 year fixed with 0 down at all. Same as him, I got a grand or so back at closing because the builder paid the closing costs.

The house has went up 15K in value, my actual house payment is $650 or so and its a descent size house (1500 sq ft ranch) in a nice housing development.

I was paying $600 for rent and getting nothing in return, I pay just under $1000 with house payment, PMI, House Insurance, and Taxes. But I get alot of that back in deductions.