Just a reminder to you young guys, don't F-up your credit rating. Your credit rating is sooo dam important in today's worls, and once it is dicked, you are screwed. Be smart, you need credit but don't abuse it.

My wife and I are stuck in a situation helping a family member who not only has rough credit, but has done a **** poor job keeping track of it and has not cleaned-up past things from an old divorce. I am trying to sign-over a house to her, and her bad credit has litterally cost her $65,000 in lost equity in the last two years.....and her score is still 540 (long story).

It is VERY hard to build good credit, but dam easy to ruin it and ruin it fast.

Good credit means banks will work with you, the lowest possible interest rates, and free offers. My bank sends me in the mail checks that I can sign....pre-approved to buy a car up to $75,000 w/o even getting any other pre-auth.

 

fo sho! i work w/a guy that has ****ed up his credit over and over and over again. he just doesn't learn! ****in' ppl.

 

I'm 22 and I owe 5200 on my credit I got when I was 18...I went crazy with it...with my current part time all I can pay is the minimum payment...you think my credit is good?

 

your score most likely sucks depending on how you paid it in the past, but you are young enough to be able to turn it around pretty fast. your top priority should be paying that thing off, no more nights out, eating out, clothes, **** like that. little sacrifices like that go a long way. pay the **** down, when you go to buy a car or a house you will thank yourself.

 

Water DR is so right! My mom and dad were smart and got me a credit card when I was 16 and let me use it for gas and other little things while they paid for it (the deal was that as long as I got good grades and played sports year round I didn't have to work...took advantage of that all the way up until my senior year in college. ha ha).....this helped establish good credit early on and by time I was out of college my credit was really good. Now it's just about as high as it can get, which helped me out when buying my house, dirt bikes and everything else. Credit is very important.

When I was buying my dirt bikes they ran my credit and found out it was really good and at that point they were MUCH more willing to deal with me because they knew I wasn't some bum in their trying to buy something I couldn't afford. After talking to the sales guy a little more he said 7 out of 10 people that try to purchase bikes from them have bad or borderline bad credit so when people come in with good credit they pretty much are all over it. Anyway, I think that's how it pretty much works in all aspects of large purchases.

Good credit=less money in the long run and MUCH easier to make large purchases

 

I've spent 10 years cleaning my credit up from the 18y/o first card.

If you can only make the minimums then you're technically paying as agreed but it will take you 20 years and ~4x the original principle to pay it off. Take every spare dollar you can get and put it at the card. Get the card to zero and you'll be in a much better credit situation.

I think the thing that messes up your score the most on a day to day basis is high balances. You MUST keep the balances as low a fraction of your available credit as you can. Every % of available credit that's used above about 25% will drop your score dramatically.

If you ever want to retire and be able to live then fix your credit, buy a house and pay the house down. Then buy another. Land and single family detatched houses are the only things that you can really own that you can retire on when the time comes with no real risk of them just up and vanishing (don't by a home in the Love Canal or 3 mile Island and you should be ok).

 

I actually have two credit cards...I owe 5k on one and my other card..I use it sort of like a debit card. Anything I purchase with it is paid of. Although I've never been late on payments on any of my credit cards..and I try to usually pay 50-60 more than the minimum on the one that i'm fawked with...

 

To pay off that card you need to make payments that are more than the montly interest charges over the principle if that's even remotely clear.

basically the minimum is what is required to pay off the last months interest and something like .2% of the principle. If you're charged 50 bucks a month in interest, and you pay 50 over the minimum, then you've net zero'd yourself. You'd want to pay, in such a case (which isn't your exact case) at least 100-200 dollars over the minimum. The problem for you is the high balance is raping you on interest.

You're a good customer of that card, so every year you need to call them up and tell them you'll pay off the card close the account if you don't get a reduction of the interest rate. They'll say no, then you say, "Please transfer me to your supervisor and I'll ask them." and they will and you will and they will and you will be happy. This only works if you ALWAYS pay on time. 1 bad payment and you'll be back to square one.

I have something like 6 cards. 1 is an Amex and I use it and pay it in full every month. the others..hell I don't even know the last time I used any other cards.

If you're using it like me, then get an amex. Don't get the gold...get the blue and be happy with it.

 

how come noone ever warns you of this stuff in high school...for all of us here it is what it is already...

 

Credit cards are the devil...

 

I'm actually clearing myself out of debt today...

I owed a total of $270 to the banks, which isn't really bad, but I also owed some of my buddies and I had been dragging it out..

Was only a total of $660 but I know I could've done a better job at keeping track of what I was charging ect on my credit and debit card..

Yall gave me very good pointers, now its time to actually use them.

 

noone warns you because our parents failed us... the baby boomers were the last recipients of anything approaching proper financial training. We expect ourselves to go from high school to adulthood without even a simple requirement to understand how to open a checking account... or how to read a Schumer statement.

If I could do one thing in my life for the current generation it would be to make it crystal clear to them how much peril they place themselves in if they fail to learn about modern financial practices.

Why don't they tell kids... so kids can go and ruin their credit and have to spend 20 years building it back up... brings bucket loads of money into the credit issuers and takes the maximum amount of money from those with the least capacity to hold on to it. Basically they're taking candy from babies, and government is owned by those same banks so they're powerless to even try to undo the damage. It really does break my heart that the innocence of youth has to be muddied with the worst sort of financial backstabbery from the worst sort of people.

From what I learned in my religions classes many years back, pretty much everybody's "God" calls usury (charging interest on loans) a sin... guess we konw why.

 

When I was 18, I had $11,000 in debt. Decided to file Bankruptcy, lawyer told me to stop making payments and he will take care of everything. 3 months into it, I had a change of heart and canceled the Bankruptcy and paid everything off in about 3 years. Unfortunately, the 3 months I was delinquent was enough to f'up my credit for 7 years anyways.

So, fast forward to 2000, I was $35,000 in the hole (not just credit cards this time) and I wasn't going to do the same thing, so.....I filed and went through with it.

Wanna know how screwed up credit card companies are?
When I filed Bankruptcy in 2000, there were two Capital One credit cards included, 72 hours after I left the courthouse, I received a pre-approved offer from Capital One.

7 years later, my score is 680 and I receive offers daily.

 

I'm adding my credit card company to my hit list.....

 

yeah, my parents did the whole make me an authorized user on their credit card thing as well. And believe me, my mom loves her credit card and I was using it the whole time to buy parts for the mustang and such. my mom always made her payments and i always gave her money to make payments on my stuff.

now, i'm 19. I got a new fourwheeler with no cosigner and a the best interest rate i could get. i have a 5.49% interest rate on my car and i'm approved for 5 lines with no deposit with all cellphone companies.

I would have to say i'm not doing to bad.

money doesn't make the world around anymore.

Credit makes the world go 'round.

Credit = Life

 

A few more comments since I started this thing....

Credit card companies are not really evil, they just play the odds and too many people take the bait. Get in trouble, you ONLY have yourself to blame. Be a sucker once.....ok.....be a sucker again, you have a serious problem.

Building good credit requires establishing patterns. You need to have open credit and you need to use it. You also need to make timely payments and not charge to the max limits. Also, you don't get points for having too many cards even if there are zero balances. ****, we had something like over 15 credit cards one time, but did not owe much money. The total that I could have charged was well over 100k. In fact, I had a few cards with 30k credit limits.

I simply cancelled most of the accounts especially the newer ones and kept the oldest ones as you get more points on your credit rating that way. Most of the additional cards were worthless store cards or gas cards that they suck you in for 10% off deals. I now have only a couple....less then 5 I think.

My credit rating is now a 799 and it is probably now higher, because I just paid-off my wife's car.....two years early.

You can have too-high a credit rating. Yup....that is right. It is really not a bad thing, but it means that you might not be leveraging your credit rating properly. In other words, if you have a very high rating, it might be a good time to use this rating to borrow funds to invest, such as rental property or some other solid business plan.

Those of you young folks who have been added to a parents CC, this is a very smart thing. In fact, when my kids are old enough, I will put them on my accounts, BUT they will never be allowed to use the cards. However, the credit will still be theirs. The downside is that if your parents screw-up, you get nailed too and the history can not be errased, so there is risk.

 

725 credit score oh yeah

 

My old man has an 793 beacon....

 

Paying off a debt early has no effect on credit. Making timely payments on a credit line or multiple lines is the only way to increase credit. It also only applies to credit lines open for 6+ months. Working for a credit union you learn these things, take for example. I took out a personal loan at 18 to build credit (cost me like $80 in interest no biggie), well I wanted to just pay it off after about four months but when we checked my credit it was still a No Score account. Took two more months to see it actually show up.

 

While you get no points for paying a loan off early per se, you get points by having a loan, and then by paying it off. Also, you loose points simply by having a loan in the first place. So, as you pay-off a loan, your score increases....weather you pay it off early or not. But you benefit from the higher score sooner.

And yes, opening lines for short periods of time not only does not increase your score, it actually lowers it. This is to prevent people from "kyting". If you work for a bank, you should know this as kyting is one of the classic ways to rip-off a bank. This is to prevent people from constantly benefiting from those CC deals that allow you to tranfser balances. Some people just move money around w/o really impacting the balances or establishing patterns. Classic kyting is when people open checking accounts and start using these checks to deposit funds in other accounts but don't have the funds to clear the checks. If you do this fast enough, you can get away with it for months but end up stealing thousands of dollars. With stupid banks handing out CC's to everyone, the same can be done with them too.

 

I had it rough as my mother could not work due to her illness so I had to pay for our house, her CC and eventually funeral. If it was not for credit I would of not been able to pay for her burial. I ended up selling the house, paying all dept and putting money away for another home. The important lesson is that I did not spend what I did not have. Even though I did not have it in the bank it was in the equity of the home. CC are a must as you never know what can happen from one day to a next so its important to have it available for emergencies and not have it maxed out.

 

Im 21 and pretty sure I have a good credit score...as I have been consistantly offered 8.99% fixed rates on at least 4 different cards .

 

I just got a credit card at the end of last year. I have 0% interest until this October. I use it basically like a debit card. Whatever I spend I subtract it from my checking. When the bill comes I pay it off in full. Usually like 400/month is my total. Can't I just keep doing this when the interest rate starts right? You only pay interest on $ that isnt paid the previous month right? So if I continue to pay it off every month I won't be paying any interest?

 

I've got a credit score of 721 or something like that... I've only had a checking and credit card since May though. So far so good, I guess. I believe my dad put my car in my name as well to help boost my credit... our loan or w/e for the stang goes through Ford Credit.

 

I cleaned up my credit woes last year, beause, 1st I missed out on 2% interest for my car loan in 2004 from my credit union. had to settle with 4% instead. No big deal. I can afford it..

So decided that 4 maxed out credit cards was killing us, my wife and I decided to tap into our 401K. Yeah! we payed all credit cards off in full..

Bought a new pool and deck and still had money to burn.. Paid the 10% penalty for early withdraw and paid a big tax on that money. Oh well.. No big deal. We dropped our monthly bills down 1000 bucks a month. Yeah!!.. Credit card bills will kill your monthly budget if you have one.

BUT.. We didn't realize that the added income we got from 401K is considered earned income.. Well that put is in a whole different tax bracket than we were having taken out of our paychecks. Went from taxable income of 75 K to almost 175 K. OUCH. Had to pay almost 10 grand in taxes last year.. 7500 Federal and almost 2000 state.

That hurt, but we managed on a tight budget to pay the taxes. Now I got my dam visa card close to maxed out again.. LOL.. I'll get another card soon so all will be good.. Let's go swimmin...

 

My point is, You do need a credit card for emergencies, But you should always be ready to pay it off at any given month.. I ain't there yet.. But I am putting into my 401K at work, as much as I can afford too. I'm still waiting on my free ride to financial bliss, aka the lottery

 

Very nice use of credit.......you gotta do what you gotta do sometimes. Sorry about your struggles, but out of ashes sometimes great things happen and with your attitude, character, and experience, I am sure it has taught you a lot.

 

You can also "borrow" from a 401k and avoid all penalties and the added income. "stealing" $20,000 from a 410k is worth about $320,000 in 24 years assuming a 12% IRR. I would have no problem doing this, but only in an emergancy, but sometimes you have to do what you have to do.