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Esteemed Contributor
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Registered: ‎05-27-2016

@Ibby114 wrote:

They don't want you to have more debt, they want you to have more available credit.  The better you manage your debt percentage is what boosts your credit rating.  It makes perfect sense to me!


@Ibby114 when you think about it, it's all the same.  

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Posts: 25,929
Registered: ‎03-09-2010

When we were about to retire we closed all but 2 credit cards. Paid off my car loan - our only debt. We got a mortgage for our new house when we moved to Fl. because they said they would pay $7000 of the closing costs if you took a mortgage with them.We paid it off 2 months after we closed. But , you know, paying bills on time and paying them off early does NOT get you as good a credit rating as being in debt does.

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Posts: 7,398
Registered: ‎03-10-2010

Re: Credit ratings - ugh.

[ Edited ]

@itiswhatitis wrote:

@Ibby114 wrote:

They don't want you to have more debt, they want you to have more available credit.  The better you manage your debt percentage is what boosts your credit rating.  It makes perfect sense to me!


@Ibby114 when you think about it, it's all the same.  


No, it's not the same.  Say I have a $10,000 credit line - but only use $2,000 and pay it off every month. My debt percentage is much better than if I have $9,000 charged with only $1,000 available. 

 

It's about your available credit lines vs the debt you've incurred/carry. 

Esteemed Contributor
Posts: 5,069
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@Ibby114 wrote:

@itiswhatitis wrote:

@Ibby114 wrote:

They don't want you to have more debt, they want you to have more available credit.  The better you manage your debt percentage is what boosts your credit rating.  It makes perfect sense to me!


@Ibby114 when you think about it, it's all the same.  


No, it's not the same.  Say I have a $10,000 credit line - but only use $2,000 and pay it off every month. My debt percentage is much better than if I have $9,000 charged with only $1,000 available. 

 

It's about your available credit lines vs the debt you've incurred/carry. 


@Ibby114, I got it!  Tx.

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@Nightowlz wrote:

My car loan was paid off  Fri. We are debt free again so will see how it affects us. Discover shows me at 850. That's as high as their scale goes. I don't think the 3 credit places rate that high?

I have already had 3 credit cards close our accounts for non-use.


@Nightowlz-

I think if you request that they note:"closed per customer request"-that will reflect better on your credit score, rather than having it show they closed your account. That's what I was told anyway.

"If you walk the footsteps of a stranger, you'll learn things you never knew. Can you sing with all the voices of the mountains? can you paint with all the colors of the wind?"
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Posts: 20,570
Registered: ‎06-13-2012

@Ibby114 wrote:

They don't want you to have more debt, they want you to have more available credit.  The better you manage your debt percentage is what boosts your credit rating.  It makes perfect sense to me!


Ah well I used to think this were true until I had no debt and I've always had much more available credit than debt. I have 4 credit cards open, 2 of which are only used once a year just to prevent the banks from closing them, and they are all paid off every month. So the available credit is very high (my debt to income ratio is very low, which is suppose to be a positive). However, now even that is considered a negative based on the description in the reason for my credit score (which is still high, just not perfect). According to them, they do want to see month to month carry over debt to make sure we can handle making timely payments. Weird- i thought paying off my debt every month  is doing that very thing, same with making timely payments and never once a late payment for 26 years ?

 

So it is not as black and white as you stated. It SHOULD be, but it isn't. 

Honored Contributor
Posts: 14,178
Registered: ‎10-25-2010

Both my DH and I have a credit rating of over 800.  At this point in our lives, we really don't care if it goes up or down a couple of points.  We don't plan to use any credit in the future.

 

About three months ago, I checked my credit and noticed that State Farm Insurance checks our credit yearly.   I hate the fact that your insurance rate  is based on your credit score.  Mine is okay, but it still is not fair.

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Posts: 9,139
Registered: ‎04-16-2010

@AngusandBuddhasMom wrote:

@SahmIam wrote:

@151949  Agree, that is does not make sense. The only time I've cared is when applying for a mortgage and in those cases, I've found bank lenders to "see the light".

 

Beyond that, don't give a cr@p what anyone else thinks.


Banks use a totally different point and credit system. Its not the same as what the public uses for general credit ratings. 


Yes, I know. Which is why I said what I said. Thanks.

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Posts: 20,570
Registered: ‎06-13-2012

@Carmie wrote:

Both my DH and I have a credit rating of over 800.  At this point in our lives, we really don't care if it goes up or down a couple of points.  We don't plan to use any credit in the future.

 

About three months ago, I checked my credit and noticed that State Farm Insurance checks our credit yearly.   I hate the fact that your insurance rate  is based on your credit score.  Mine is okay, but it still is not fair.


I noticed this too a few years ago. There was also another type of company that checks too, I think it was Dish network? I can't remember exactly but it bothers me that they can check it. I mean, if I have never missed a payment or been late in all the years I've been with that company, there should be no reason to check it. 

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Registered: ‎03-11-2010

@HappyDaze wrote:

@Ibby114 wrote:

They don't want you to have more debt, they want you to have more available credit.  The better you manage your debt percentage is what boosts your credit rating.  It makes perfect sense to me!


Ah well I used to think this were true until I had no debt and I've always had much more available credit than debt. I have 4 credit cards open, 2 of which are only used once a year just to prevent the banks from closing them, and they are all paid off every month. So the available credit is very high (my debt to income ratio is very low, which is suppose to be a positive). However, now even that is considered a negative based on the description in the reason for my credit score (which is still high, just not perfect). According to them, they do want to see month to month carry over debt to make sure we can handle making timely payments. Weird- i thought paying off my debt every month  is doing that very thing, same with making timely payments and never once a late payment for 26 years ?

 

So it is not as black and white as you stated. It SHOULD be, but it isn't. 


@HappyDaze ITA. Even though we have excellent credit it's not the highest # they give. We have never paid a bill late not ever in over 40 yrs. We made monthly mortgage payments on time until it was paid off. We pay cc in full each month as we don't want to pay the interest. After 40 yrs I'm sure they can see we can make the payments on anything we choose to buy. We have never lived beyond our means or as I say high off the hog.