At what point is your credit score "high enough"?

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Mandrale
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At what point is your credit score "high enough"?

Post by Mandrale » Tue Aug 27, 2013 3:00 pm

Obviously having a perfect score is the best possible outcome. At the same time, that is extremely hard to achieve. So, for a person that wants a base line on a good credit score, at what point is your credit score "high enough" that you realistically could achieve anything you would like with it? (Most importantly a great rate on a home loan/auto loan, or any other money borrowing scenarious you can think of.)

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Re: At what point is your credit score "high enough"?

Post by Quickfoot » Tue Aug 27, 2013 3:06 pm

Having a perfect score isn't the best possible outcome because it doesn't get you anything more than a 740 FICO does, the best possible outcome credit wise is to (a) get approved and (b) get the lowest offered rate. You stop getting rewards from your credit score once you hit 740, after that income and net worth may have an impact but credit score doesn't. Having around a 760 could be beneficial because opening new accounts can cause the score to drop 5-10 points for a couple months.

Also you can have a 740 and not get approved if your income / net worth isn't high enough, it's generally going to be better to focus on income and net worth after about 720 FICO. With a 720 you will get qualified for anything you will with a 740, you may pay a *slightly* higher rate but not much.
Last edited by Quickfoot on Tue Aug 27, 2013 3:09 pm, edited 4 times in total.

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Re: At what point is your credit score "high enough"?

Post by White Coat Investor » Tue Aug 27, 2013 3:07 pm

740..All you have to do to keep that is pay your bills.
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Re: At what point is your credit score "high enough"?

Post by The Wizard » Tue Aug 27, 2013 3:10 pm

I'll be pragmatic and say that it's high enough after about 2-3 years of consistent never-late payments on your edu loans, car loans, and/or credit cards.
I'm not sure what the number would be after 36 months of perfect payment history on several credit lines, but it should be adequate to demonstrate credit worthiness...
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BrandonBogle
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Re: At what point is your credit score "high enough"?

Post by BrandonBogle » Tue Aug 27, 2013 3:10 pm

On rare instances I've seen some places want 760 scores not for the best rate, but for easier documentation requires for loan processing. But in general, once you get past 740, you have nothing to worry about.

I just did a HELOC for 795 and the lady said with my score don't worry about this, don't worry about that. Made it much easier. Funny how "used" she is to lower scores though. At the end of the call she said that if I did X or Y I could improve my credit score. She wasn't expecting me to reply back "but why would I want my score higher than 795?". LOL :)

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Re: At what point is your credit score "high enough"?

Post by MnD » Tue Aug 27, 2013 3:16 pm

I got additional points back (1/2 point I think) against closing costs on a 2010 refi for having scores from all three credit reporting firms above 750.
Wasn't a big loan so it was worth ~$500 to me.

We have applied for and received six credit card sign-up bonuses in the past couple of years worth around 240,000 frequent flyer miles, so having a high enough score to do that and still maintain an excellent credit score despite the hard credit pulls was quite valuable. Essentially you can "spend" the credit score point room you have above 750 (or whatever you feel is minimally acceptable) for valuable prizes! :mrgreen:

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Re: At what point is your credit score "high enough"?

Post by YttriumNitrate » Tue Aug 27, 2013 3:23 pm

To get the best rates on a Fifth Third bank mortgage, you need a 740 or better if you're getting a conforming loan and an 800 or better if you're getting a jumbo loan.

https://www.53.com/wholesale-mortgage/w ... heets.html

lindisfarne
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Re: At what point is your credit score "high enough"?

Post by lindisfarne » Tue Aug 27, 2013 4:37 pm

The different credit agencies have somewhat different top scores, thus, a given "score" has different meanings.
http://www.myfico.com/crediteducation/creditscores.aspx

Your score can affect your insurance (home, auto, etc.) rates (or at least, an insurance agency may reduce/eliminate the credit you get for a good insurance score - this increases the total amount you pay the insurance company although technically, it does not raise your "premium") as well as your mortgage rates.

It seems pretty ridiculous that if you have an excellent payment history and low % usage of credit that opening new accounts can hurt your credit score, but it does ("New accounts will lower your average account age, which will have a larger effect on your score if you don't have a lot of other credit information." http://www.myfico.com/CreditEducation/I ... Score.aspx ).

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Re: At what point is your credit score "high enough"?

Post by 2wolves » Tue Aug 27, 2013 5:09 pm

I refinanced many times, and sometimes the highest rating was 800+. But I agree that above 740 will put in in a high enough group for just about everything else.

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Re: At what point is your credit score "high enough"?

Post by grabiner » Tue Aug 27, 2013 9:44 pm

lindisfarne wrote:It seems pretty ridiculous that if you have an excellent payment history and low % usage of credit that opening new accounts can hurt your credit score, but it does ("New accounts will lower your average account age, which will have a larger effect on your score if you don't have a lot of other credit information." http://www.myfico.com/CreditEducation/I ... Score.aspx ).
"Not having a lot of other credit information" is not the same as "low % usage". If you have several accounts with low balances which you have had for years (either open or closed), opening a new card won't hurt your score very much (although it could hurt your insurance score). If you have only one credit card which you opened three years ago ("not having a lot of other credit information"), opening a new card will hurt your score more immediately, although it will help your score in the long run to have two cards rather than one.

But the real reason that X reduces your credit score is that the credit score is a measure of risk; people who do X are more likely to default. People with good credit who open new accounts might either be shopping around for better terms (and thus no more likely to default) or planning to borrow more money (and thus more likely to default); the scoring companies can't tell, and thus reduce scores as the new accounts are opened. The more important factors are clearer indications of risk; people who make late payments, or run up high balances, are much more likely to default, and will see their scores drop much more.
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coolguy954
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Re: At what point is your credit score "high enough"?

Post by coolguy954 » Tue Aug 27, 2013 10:10 pm

over 800..which I have :sharebeer

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Re: At what point is your credit score "high enough"?

Post by interplanetjanet » Tue Aug 27, 2013 10:25 pm

Probably the highest score requirements I've seen have been for either exceptional auto lease deals (some require an 800+ FICO to get the best possible deal) or mortgages with >80% LTV or high DTI. With some mortgages I've seen 760 be a cutoff for the best possible rate, and higher scores are considered mitigating factors for high DTI.

For those of us paying large amounts in child support or alimony, mitigating high DTI is often necessary even when buying conservatively - a $3k/mo payment to an ex-spouse affects DTI the same as a credit card with a $3k/mo minimum monthly payment (it's considered a debt, not a reduction to income).

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Re: At what point is your credit score "high enough"?

Post by dr_g » Tue Aug 27, 2013 10:52 pm

I belong to a credit monitoring service and my scores are around 800. They offer a simulator which I played with at length. One option is to simulate no changes other than "pay all bills on time for 6 months." That drops my credit score by about 20 points for two of the three credit agencies. The score from the third agency remains flat.

The monitoring service https://enhanced.wellsfargoprotection.com/default.aspx swears they simulate the behavior of the respective credit scoring agencies. Any ideas other than the modeling is worthless?

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Re: At what point is your credit score "high enough"?

Post by IlliniDave » Wed Aug 28, 2013 5:05 am

My credit score is waning due to a personal policy of no longer borrowing money. I had eliminated all debts except my mortgage a number of years back and in 2010 I refinanced and my score had dropped relative to what is was in 2008 when I also refinanced. My "report" was/is clean (all "old" accounts settled on time or ahead of schedule), but I'd guess by now my score has dropped further. Sometimes I wonder about that, but at the end of the day I don't worry about it. It is what it is.
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Achelois
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Re: At what point is your credit score "high enough"?

Post by Achelois » Wed Aug 28, 2013 5:21 am

Mine usually hangs around 814. I do not know why. I have never done anything specific except pay my bills. It was that way when I first learned what it was.

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prudent
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Re: At what point is your credit score "high enough"?

Post by prudent » Wed Aug 28, 2013 5:53 am

IMHO 740 gets you the best deal on almost everything, 760 for practically everything else, and 800 for certain mortgages.

Many people aren't aware that there are multiple types of scores. FICO itself has different "flavors"of scoring - for mortgages, credit cards, auto loans, etc. So it's possible to be in one tier for one type of credit but a different tier for something else. Also, consumers are assigned to "buckets" which can affect your score if you are moved from one "bucket" to another even if nothing else has changed. Depending on what bucket you are in, the things in your credit record may be weighted differently. For example, someone may have a relatively short credit history which may be a factor in assigning them to a particular bucket, but when their history is longer they get moved to a different bucket. Their score may change for that reason alone.

There's "high enough" to get the best rate on credit, and like MnD said there's "high enough" to where you can exploit certain offers that you know will ding your score but you are still above the top threshold going forward, so no harm done.

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Re: At what point is your credit score "high enough"?

Post by Leesbro63 » Wed Aug 28, 2013 6:00 am

This thread was VERY informative for me. Thank you. I never really knew what was "good enough". Now I do!

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Re: At what point is your credit score "high enough"?

Post by tigermilk » Wed Aug 28, 2013 7:34 am

IlliniDave wrote:My credit score is waning due to a personal policy of no longer borrowing money. I had eliminated all debts except my mortgage a number of years back and in 2010 I refinanced and my score had dropped relative to what is was in 2008 when I also refinanced. My "report" was/is clean (all "old" accounts settled on time or ahead of schedule), but I'd guess by now my score has dropped further. Sometimes I wonder about that, but at the end of the day I don't worry about it. It is what it is.
Imagine you have no debt, no credit cards, and Warren Buffet sized assets in cash. You'd have no credit score. Credit score is not a measure of wealth but your ability to take on and pay debt. Food for thought. Seems like the real goal here should be "how do I get no credit score?"

I'm like you - don't borrow, but I also now have a paid off house. Don't know what my score is and frankly don't give a hoot, as short of a catastrophe I will never borrow money again in my lifetime, a good feeling to have in my 40s.

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BrandonBogle
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Re: At what point is your credit score "high enough"?

Post by BrandonBogle » Wed Aug 28, 2013 7:48 am

For those of you with "no debt", are you saying you do not use credit cards either? In this day and age that is difficult, but not impossible. Personally I put everything on my credit card and pay it off each month for the benefits my card provides. In this scenario, my card is revolving credit that I pay on time (and in full) every month. So I will never have "no debt" or "no score" on my report.

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bertilak
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Re: At what point is your credit score "high enough"?

Post by bertilak » Wed Aug 28, 2013 11:40 am

BrandonBogle wrote:For those of you with "no debt", are you saying you do not use credit cards either? In this day and age that is difficult, but not impossible. Personally I put everything on my credit card and pay it off each month for the benefits my card provides. In this scenario, my card is revolving credit that I pay on time (and in full) every month. So I will never have "no debt" or "no score" on my report.
I believe it is possible to have "no debt" even with an actively-used credit card. This is based on personal experience.

My credit score was dinged with the explanation that I carried too high a percentage of my CC limit. This happened even though I paid the card in full each month.

I wasn't happy about that so, I made a change and paid weekly to keep the balance low (not at the time realizing this wasn't important). I actually paid off the card BEFORE the statement date. This meant there was a zero, or even negative, balance on the monthly statement. (Use of Quicken allowed me to cut things this fine.)

One month I let it go a little longer so there was a low, but non-zero, balance on my statement. I got dinged AGAIN because a "previously inactive account became active!" Turns out that the statements are all that the rating agencies see so all those zero/negative balances looked to them like an inactive card. This was even though I was charging a couple of thousand to the card each month. Now I make sure there is always a low balance each statement. I also asked for, and got, an increase to the limit on my card.
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Re: At what point is your credit score "high enough"?

Post by 2wolves » Wed Aug 28, 2013 11:41 am

tigermilk wrote:
IlliniDave wrote: I'm like you - don't borrow, but I also now have a paid off house. Don't know what my score is and frankly don't give a hoot, as short of a catastrophe I will never borrow money again in my lifetime, a good feeling to have in my 40s.
Credit score can also affect your insurance rates in many states. But it's usually only the really bad scores that would have a big impact on your premiums. A 700 vs 800 would probably not matter all that much.

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Re: At what point is your credit score "high enough"?

Post by BrandonBogle » Wed Aug 28, 2013 11:46 am

Bertilak, while most credit card companies post the updated balance based on your statement date, not all do. There were FatWallet threads about that a couple years back.

And while yes, there would be no "outstanding debt" in the scenario you outlined, you would still have access to a revolving line, so it would not be a situation that there is nothing but old, closed accounts to report on your credit report. But perhaps I was misreading/misinterpretting the other posters' comments and that is not what they meant.

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Re: At what point is your credit score "high enough"?

Post by stoptothink » Wed Aug 28, 2013 11:50 am

bertilak wrote:
BrandonBogle wrote:For those of you with "no debt", are you saying you do not use credit cards either? In this day and age that is difficult, but not impossible. Personally I put everything on my credit card and pay it off each month for the benefits my card provides. In this scenario, my card is revolving credit that I pay on time (and in full) every month. So I will never have "no debt" or "no score" on my report.
I believe it is possible to have "no debt" even with an actively-used credit card. This is based on personal experience.

My credit score was dinged with the explanation that I carried too high a percentage of my CC limit. This happened even though I paid the card in full each month.

I wasn't happy about that so, I made a change and paid weekly to keep the balance low (not at the time realizing this wasn't important). I actually paid off the card BEFORE the statement date. This meant there was a zero, or even negative, balance on the monthly statement. (Use of Quicken allowed me to cut things this fine.)
I do this as well, pay weekly, as I have had a similar experience where my credit was dinged for too high utilization (because I had just paid $7k in tuition and bought a new car the same week) despite the fact that I haven't carried a balance once in my entire credit history. I pay pretty close to 100% of my bills via CC. It is really psychological at this point though, I have pretty much no need for credit outside of the possibility of a future mortgage.

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Re: At what point is your credit score "high enough"?

Post by Mandrale » Wed Aug 28, 2013 1:05 pm

These responses have been great... Thank you everyone. It seems like a commonality between opinions is that anywhere north of 750 will get you the "deals" that you want, and to maintain that level it is really just about continuing to use and pay your bills/charges on time.

Thanks for the information everyone!

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Re: At what point is your credit score "high enough"?

Post by danwhite77 » Wed Aug 28, 2013 1:09 pm

Zero.

Assuming you pay cash for everything! :D
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Re: At what point is your credit score "high enough"?

Post by dr_g » Wed Aug 28, 2013 2:53 pm

stoptothink wrote:
bertilak wrote:
BrandonBogle wrote:For those of you with "no debt", are you saying you do not use credit cards either? In this day and age that is difficult, but not impossible. Personally I put everything on my credit card and pay it off each month for the benefits my card provides. In this scenario, my card is revolving credit that I pay on time (and in full) every month. So I will never have "no debt" or "no score" on my report.
I believe it is possible to have "no debt" even with an actively-used credit card. This is based on personal experience.

My credit score was dinged with the explanation that I carried too high a percentage of my CC limit. This happened even though I paid the card in full each month.

I wasn't happy about that so, I made a change and paid weekly to keep the balance low (not at the time realizing this wasn't important). I actually paid off the card BEFORE the statement date. This meant there was a zero, or even negative, balance on the monthly statement. (Use of Quicken allowed me to cut things this fine.)
I do this as well, pay weekly, as I have had a similar experience where my credit was dinged for too high utilization (because I had just paid $7k in tuition and bought a new car the same week) despite the fact that I haven't carried a balance once in my entire credit history. I pay pretty close to 100% of my bills via CC. It is really psychological at this point though, I have pretty much no need for credit outside of the possibility of a future mortgage.
I found out that the creditor fixates on the one and only report they pull.

For example, let's say you've been paying off your credit cards for 20 years and you always wait until the end of the month to pay the float and you charge everything under the sun for convenience and the 1-2% rebate. You would think that person is pretty smart and responsible and warrants a very high score.

Well, if you happen to have a balance of $20k that month, but $100k in your checking account to pay it off on time, the creditor's computer will go into hyperdrive, report that you may have trouble paying it off, and lower your score. Moral: Pay cash during the month prior to authorizing a creditor to pull your credit.

To add insult to injury, the creditor's underwriting system may consider the $20k a recurring debt, lowering your debt to income ratio.

I found that the underwriter has little latitude to apply logic to the loan application package, since the computers are so smart.

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BrandonBogle
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Re: At what point is your credit score "high enough"?

Post by BrandonBogle » Wed Aug 28, 2013 3:39 pm

Generally, whenever I am getting ready to do a loan where I want to "watch my numbers", like debt to income, I prepay my revolvings so they close with a near $0 balance. I saw near $0 b/c a couple years back my Chase card would not report negative balance and would simply NOT report an updated balance if there was a credit owed. Then, if I find anything I need to nix, I just roll it into the loan.

For instance, on Friday is my closing for a HELOC 2nd mortgage. I prepaid my cards since I wanted to get this HELOC for the maximum amount and I do have a first mortgage and two auto loans already. When they ran my report, my paid off student loans still showed a balance (paid off in February). I simply said I will use the proceeds of the HELOC to pay off the student loans.

Meanwhile, I disputed the entries on the credit report as paid and am waiting for that to update. So either way, I am not worried.

Long story short, yes, it pays to pay down revolving debts before having a lender pull the trigger on a credit report.

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Re: At what point is your credit score "high enough"?

Post by Barefootgirl » Wed Aug 28, 2013 6:10 pm

Last time I checked, a month ago, it was around 800 +

ALthough, I am currently in a dispute on my credit reports with Verizon....they billed me incorrectly, I paid late and they still won't remove it...I paid late since it took them that long to fix the bill...I guess the lesson is let Verizon hold a gun to your head, then try to get your money back later.

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Re: At what point is your credit score "high enough"?

Post by grabiner » Wed Aug 28, 2013 11:21 pm

2wolves wrote:Credit score can also affect your insurance rates in many states. But it's usually only the really bad scores that would have a big impact on your premiums. A 700 vs 800 would probably not matter all that much.
This is not correct, as I confirmed from my own experience; I had excellent credit in both 2010 and 2012, but got a 15% auto insurance discount in 2010 (two open accounts, two recent inquiries) and 30% in 2012 (three open accounts, one inquiry 19 months ago) from the same company.

In addition, the scoring algorithms for insurance are different; the same factors are good for both credit and insurance, but many insurance algorithms have a much heavier weight on inquiries.

The reason that the difference between good and excellent credit matters with insurance is that insurance risks are not capped at zero. If a good credit score is a 0.2% chance of default and an excellent score is a 0.1% chance of default, the bank won't care. If a good insurance score is a 10% chance of an accident and an excellent score is a 9% chance of an accident, the auto insurer will charge 10% less to customers with excellent rather than good insurance scores.
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Re: At what point is your credit score "high enough"?

Post by IlliniDave » Thu Aug 29, 2013 5:55 am

BrandonBogle wrote:For those of you with "no debt", are you saying you do not use credit cards either? In this day and age that is difficult, but not impossible. Personally I put everything on my credit card and pay it off each month for the benefits my card provides. In this scenario, my card is revolving credit that I pay on time (and in full) every month. So I will never have "no debt" or "no score" on my report.
I've found it quite easy to live life without credit cards and a mortgage, no difference really except I don't have to keep up with paying an extra bill (or bills) on time every month to avoid interest charges. I understand that's not a huge hairy deal in and of itself with the automated billing options that exist today. I don't think there's anything "wrong" with approaching things the way you do, it just doesn't appeal to me.
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Re: At what point is your credit score "high enough"?

Post by IlliniDave » Thu Aug 29, 2013 6:17 am

grabiner wrote:
2wolves wrote:Credit score can also affect your insurance rates in many states. But it's usually only the really bad scores that would have a big impact on your premiums. A 700 vs 800 would probably not matter all that much.
This is not correct, as I confirmed from my own experience; I had excellent credit in both 2010 and 2012, but got a 15% auto insurance discount in 2010 (two open accounts, two recent inquiries) and 30% in 2012 (three open accounts, one inquiry 19 months ago) from the same company.

In addition, the scoring algorithms for insurance are different; the same factors are good for both credit and insurance, but many insurance algorithms have a much heavier weight on inquiries.

The reason that the difference between good and excellent credit matters with insurance is that insurance risks are not capped at zero. If a good credit score is a 0.2% chance of default and an excellent score is a 0.1% chance of default, the bank won't care. If a good insurance score is a 10% chance of an accident and an excellent score is a 9% chance of an accident, the auto insurer will charge 10% less to customers with excellent rather than good insurance scores.
Edit: did some research and answered most of my questions. Interesting that I'll eventually be lumped in with the deadbeats of the world as punishment for satisfying all my debts and achieving financial independence.

For now, I have enough "residual" in my credit record that according to Credit Karma my insurance score is an "A" at something over 900. I also learned that the state I plan on moving to has some protections in place limiting how far an insurance company can carry things. I plan on staying with my present insurer indefinitely, so hopefully as credit "information" about me thins, my (by then) 30+ year track record with the company as well as state regulations will keep me from getting abused too badly.

That I would have to lick the boots of the system and maintain a credit account I don't want or need to keep from getting ripped off for something relatively unrelated to credit is something I find immensely aggravating. :annoyed
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Re: At what point is your credit score "high enough"?

Post by Oilburner » Thu Aug 29, 2013 7:14 am

It is good to know that anything over 740 does not get you any better credit deals. That coincides with a recent refinance experience I had. My wife and I recently refinanced through Amerisave and both of our credit scores are over 800 from all three agencies. We also refinanced with Amerisave before that under two years ago and were never late on a mortgage payment, so they know that we are not a risk. And during the current refinance, it was unbelievable how much documentation they wanted. Every single investment, savings, and bank account statements six months back, copies of my divorce decree signed by the Judge from over 10 years ago, signed statements by me for normal deposits to my bank account, etc. And this was for a $170,000 15-year loan with the house appraising for over twice the refinance loan amount, with housing expenses being about 15% of our pay, and our investments totaling about $750,000. I was expecting our high credit scores to get us special treatment, but it appears it did not. That was the most grueling refinance I have been through and I was kind of perplexed since I thought our credentials were about as good as it got.

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Re: At what point is your credit score "high enough"?

Post by BrandonBogle » Thu Aug 29, 2013 8:34 am

IlliniDave wrote:
BrandonBogle wrote:For those of you with "no debt", are you saying you do not use credit cards either? In this day and age that is difficult, but not impossible. Personally I put everything on my credit card and pay it off each month for the benefits my card provides. In this scenario, my card is revolving credit that I pay on time (and in full) every month. So I will never have "no debt" or "no score" on my report.
I've found it quite easy to live life without credit cards and a mortgage, no difference really except I don't have to keep up with paying an extra bill (or bills) on time every month to avoid interest charges. I understand that's not a huge hairy deal in and of itself with the automated billing options that exist today. I don't think there's anything "wrong" with approaching things the way you do, it just doesn't appeal to me.
To each his own. I used to only have a credit card only for large items, but still would never carry a balance. But from 1998 - 2003 I lost my wallet once and got mugged three times. Each time I lost $100-$200 in cash. I haven't been mugged since, but I switched everything over to my cards. I rarely have more than $5-$10 on me in cash. Meanwhile, I earn cash back on all my purchases (up to 5%) and validate/adjust my budget as needed since I have all the "records" in front of me. I still never carry a balance and about $1,200 - $1,800/mo gets charged. It's convenient for me, so that's works. If your process works for you, that is great. No right or wrong answer here. :)

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Re: At what point is your credit score "high enough"?

Post by telemark » Thu Aug 29, 2013 9:46 am

IlliniDave wrote:That I would have to lick the boots of the system and maintain a credit account I don't want or need to keep from getting ripped off for something relatively unrelated to credit is something I find immensely aggravating. :annoyed
It's the modern equivalent of burning incense on an altar. Not a big deal unless you skip it, and then the priests will get you talked about.

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Re: At what point is your credit score "high enough"?

Post by The Wizard » Thu Aug 29, 2013 9:56 am

telemark wrote:
IlliniDave wrote:That I would have to lick the boots of the system and maintain a credit account I don't want or need to keep from getting ripped off for something relatively unrelated to credit is something I find immensely aggravating. :annoyed
It's the modern equivalent of burning incense on an altar. Not a big deal unless you skip it, and then the priests will get you talked about.
Keep a credit card for use in online purchases and travel-related expenses and you'll be fine.
While you may be able to use a DEBIT card for some of those expenditures, as you're finding out, it won't have the same impact on your all-important Credit Score...
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Re: At what point is your credit score "high enough"?

Post by bogleblitz » Thu Aug 29, 2013 10:12 am

I use mint.com and just last month, mint automatically emailed me saying I'm using 30% of my credit limit and that will affect my credit score. I quickly went to pay off the balance even though I pay it off every month.

Credit reports have no idea how much you have in your checking/savings account. They only know how much you owe and how much you can borrow.

Credit reports will always find some way to ding off points no matter how perfect you are. More than 740 score is good enough.

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Re: At what point is your credit score "high enough"?

Post by nonnie » Thu Aug 29, 2013 8:41 pm

MnD wrote: We have applied for and received six credit card sign-up bonuses in the past couple of years worth around 240,000 frequent flyer miles, so having a high enough score to do that and still maintain an excellent credit score despite the hard credit pulls was quite valuable. Essentially you can "spend" the credit score point room you have above 750 (or whatever you feel is minimally acceptable) for valuable prizes! :mrgreen:
I've started doing this except they keep giving me too much credit. I expect $15K or so and they give me $25K. I'm now up to 8 cards which is way too many, guess I'll have to prune and see how it affects my credit score. Any tips or special steps you take?

This is a general question-- it is my understand that if you lose a credit card or it's compromised in some way and a new one needs to be issued, your credit history date with that CC company starts with the date of issue of the NEW card and so you're out of luck if it happens to your oldest or one of your older cards. Is this correct?

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Re: At what point is your credit score "high enough"?

Post by BrandonBogle » Thu Aug 29, 2013 9:02 pm

Nonnie,

Replacement "transferred" cards are dated back to the same age as the original card, so if my Visa card is compromised and I'm issued a new number, it's the "same account" and thus the new entry is as old as the previous entry. The previous entry also remains and ages for seven years.

New accounts where you have an existing relationship are different. It depends on the issuer, but most will base "new" accounts on that specific account's date. AmEx is a notable exception in that your new cards will be back dated to the first card you had with them.

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Re: At what point is your credit score "high enough"?

Post by grabiner » Thu Aug 29, 2013 9:18 pm

nonnie wrote:This is a general question-- it is my understand that if you lose a credit card or it's compromised in some way and a new one needs to be issued, your credit history date with that CC company starts with the date of issue of the NEW card and so you're out of luck if it happens to your oldest or one of your older cards. Is this correct?
No. Your creditor reports the date that the account was opened, not the date that the account was first reported to the bureau. Thus, if your credit card was opened in 2007 and the creditor started reporting to Trans Union in 2009, the Trans Union report will show the card as opened in 2007 (but with no payment data from before 2009). If the account number is changed because the card is stolen in 2013, the creditor will report the new number as an account opened in 2007. The old card may be reported as a closed account as well.

I have a card for which both of these situations apply, so I can confirm it from personal experience.

And this makes sense from the standpoint of the credit bureau's customers (the lenders who use the scores). If you open a new account, that increases your default risk, and lowers your credit score. If a bank assigns a new account number with the same account, you haven't opened any new credit, so that doesn't increase your default risk.
Last edited by grabiner on Thu Aug 29, 2013 10:14 pm, edited 1 time in total.
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Re: At what point is your credit score "high enough"?

Post by BrandonBogle » Thu Aug 29, 2013 10:03 pm

Update: Typo Fixed
Last edited by BrandonBogle on Fri Aug 30, 2013 9:17 am, edited 1 time in total.

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Re: At what point is your credit score "high enough"?

Post by grabiner » Thu Aug 29, 2013 10:14 pm

BrandonBogle wrote:
grabiner wrote:No. Your creditor reports the date that the account was opened, not the date that the account was first reported to the bureau. Thus, if your credit card was opened in 2007 and the creditor started reporting to Trans Union in 2009, the Trans Union report will show the card as opened in 2009 (but with no payment data from before 2009).
David, I think you mean 2007 in the part I changed to red and bolded.
Typo fixed.
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Re: At what point is your credit score "high enough"?

Post by lindisfarne » Fri Aug 30, 2013 12:49 am

2wolves wrote:
tigermilk wrote:
IlliniDave wrote: I'm like you - don't borrow, but I also now have a paid off house. Don't know what my score is and frankly don't give a hoot, as short of a catastrophe I will never borrow money again in my lifetime, a good feeling to have in my 40s.
Credit score can also affect your insurance rates in many states. But it's usually only the really bad scores that would have a big impact on your premiums. A 700 vs 800 would probably not matter all that much.
On my homeowners insurance, last year I got a credit of $87 due to my "insurance bureau score" which is somehow calculated from my credit history. This year, it was reduced to a credit of $37. The only thing I did was open a couple of credit cards. The promotions I got from opening them was more than the $50. About 16 months ago, my credit scores hovered around 800. I don't know what they are now, but given that I have a long credit history, low % of usage of credit, and no late payments (ever), my credit scores should not have dropped below 740. (opening a couple of credit cards (given my credit history & usage) shouldn't ding your credit score by 60 points!)

Thus, a credit score of even 750-780 can lead to higher homeowners insurance costs!

(I ordered my credit report & there were no errors on it. I'll wait a bit then ask my insurance company to look at this again. Either my credit score may go up again, or I've heard that some people have had some success by pointing out they have great credit history & that the new credit cards should be ignored.)

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Re: At what point is your credit score "high enough"?

Post by lindisfarne » Fri Aug 30, 2013 12:52 am

nonnie wrote:
MnD wrote: We have applied for and received six credit card sign-up bonuses in the past couple of years worth around 240,000 frequent flyer miles, so having a high enough score to do that and still maintain an excellent credit score despite the hard credit pulls was quite valuable. Essentially you can "spend" the credit score point room you have above 750 (or whatever you feel is minimally acceptable) for valuable prizes! :mrgreen:
I've started doing this except they keep giving me too much credit. I expect $15K or so and they give me $25K. I'm now up to 8 cards which is way too many, guess I'll have to prune and see how it affects my credit score. Any tips or special steps you take?

This is a general question-- it is my understand that if you lose a credit card or it's compromised in some way and a new one needs to be issued, your credit history date with that CC company starts with the date of issue of the NEW card and so you're out of luck if it happens to your oldest or one of your older cards. Is this correct?

Nonnie
Do some searching on google - generally, getting rid of credit cards will not improve your credit score (and can hurt it if your credit usage exceeds a certain %). I've heard you should also keep your usage of any one credit card to below 25-30% of your available credit.

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Re: At what point is your credit score "high enough"?

Post by IlliniDave » Fri Aug 30, 2013 5:28 am

lindisfarne wrote:
Do some searching on google - generally, getting rid of credit cards will not improve your credit score (and can hurt it if your credit usage exceeds a certain %). I've heard you should also keep your usage of any one credit card to below 25-30% of your available credit.
Too low of a "Credit Card Utilization" percentage is viewed as punishable offense too. Just nosing around I saw somewhere that at least for Transunion, having 0% utilization gives you a grade of "C", nearly 100 points lower in one of the more heavily weighted categories than if you're using 1-20%. I guess if you're not letting the banks get their piece of the action you deserve what you get. :oops:
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Re: At what point is your credit score "high enough"?

Post by ProfessorX » Fri Aug 30, 2013 7:14 am

When applying for a mortgage or refinance at places like Amerisave.com then you get a better deal (lower interest rate or larger closing credit) in 20 FICO score increments going all the way up to the top.

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Re: At what point is your credit score "high enough"?

Post by grabiner » Fri Aug 30, 2013 8:11 am

IlliniDave wrote:Too low of a "Credit Card Utilization" percentage is viewed as punishable offense too. Just nosing around I saw somewhere that at least for Transunion, having 0% utilization gives you a grade of "C", nearly 100 points lower in one of the more heavily weighted categories than if you're using 1-20%. I guess if you're not letting the banks get their piece of the action you deserve what you get.
Credit Karma's letter grades are oversimplifications; the main factors in a credit score are reduced to single numbers. If you don't use credit cards at all, that is not good for your credit score, which is the reason for the C grade for 0% utilization. But if you do use cards and happen to have a zero balance this month, or have a utilization less than 0.5% (this happened to me once), that won't hurt your score.
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Re: At what point is your credit score "high enough"?

Post by grabiner » Fri Aug 30, 2013 8:19 am

lindisfarne wrote:On my homeowners insurance, last year I got a credit of $87 due to my "insurance bureau score" which is somehow calculated from my credit history. This year, it was reduced to a credit of $37. The only thing I did was open a couple of credit cards. The promotions I got from opening them was more than the $50. About 16 months ago, my credit scores hovered around 800. I don't know what they are now, but given that I have a long credit history, low % of usage of credit, and no late payments (ever), my credit scores should not have dropped below 740. (opening a couple of credit cards (given my credit history & usage) shouldn't ding your credit score by 60 points!)
There is no single "credit score"; scores are different for different models, and insurance scores are much more sensitive to inquiries than loan scores such as the FICO numbers you are reporting. My insurance score as computed by Credit Karma made substantial jumps when my one inquiry became 6, 12, 18 (largest jump), and 24 months old.

Ask your insurer to recalculate your score when you next renew; the inquiries will have much less effect.
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Re: At what point is your credit score "high enough"?

Post by ProfessorX » Fri Aug 30, 2013 9:17 am

Also your homeowners and car insurance rates depend upon your "insurance score" which is some super secret number. This number depends in some indirect way upon your credit score. I don't know the specifics, and it may be super secret unfortunately.

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Re: At what point is your credit score "high enough"?

Post by lindisfarne » Fri Aug 30, 2013 4:32 pm

IlliniDave wrote:Too low of a "Credit Card Utilization" percentage is viewed as punishable offense too. Just nosing around I saw somewhere that at least for Transunion, having 0% utilization gives you a grade of "C", nearly 100 points lower in one of the more heavily weighted categories than if you're using 1-20%. I guess if you're not letting the banks get their piece of the action you deserve what you get. :oops:
That's an important point, but it's not my issue. I make sure to use all my credit cards, mainly to be sure the issuer doesn't cancel them for nonuse. Additionally, my pattern of usage hasn't changed in the last 16months (since I refinanced & got credit scores for all agencies) or since my last homeowner's insurance policy was issued 12 months ago, so those do not account for the change in the credit based on my insurance bureau score.

The only thing that has changed (as I said above) is opened a couple new credit cards to get the promotions. My point above is that the difference between a credit score of 800 vs. something in the range of 750-780 can actually cost you money! The credit (based on my insurance bureau score) on my homeowner's insurance policy was reduced by $50 - nothing else has changed in my credit history.

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Re: At what point is your credit score "high enough"?

Post by lindisfarne » Fri Aug 30, 2013 4:39 pm

grabiner wrote:There is no single "credit score"; scores are different for different models, and insurance scores are much more sensitive to inquiries than loan scores such as the FICO numbers you are reporting. My insurance score as computed by Credit Karma made substantial jumps when my one inquiry became 6, 12, 18 (largest jump), and 24 months old.

Ask your insurer to recalculate your score when you next renew; the inquiries will have much less effect.
Yes, I understand that. However, I really don't think whatever equation they use to calculate their insurance bureau scores is correctly representing risk. While it may be the case that some people with a certain credit history may represent a greater risk when they have a few inquiries, I don't think that is true of people with a LONG, excellent credit history who never have had a late payment or failure to pay, especially when they have a long history of low credit usage. There seems to be a flaw in the assumptions they make.

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