I paid off my mortgage a year ago and have no other debt but my score is still 730 I guess because I still have a VISA debt card account open. Everything else is closed.
If you want to borrow money, you have to have a Credit Bureau Verifiable Credit History. Bottom Line. Gone are the days you can go into a locally owned bank and borrow money based on your history with them. I was lucky and went to church with the Vice President of a local bank that approved my first loans to buy guns when I was 18 yrs old. That credit history let me get Wards and Sears cards to use and payoff each month. Then eventually car loans and mortgages.
Its a multi-year process to build up your credit report history. Virtually everything and everyone will use a FICO score or one of the other systems to grade your credit. Length of credit history is not considered acceptable until 7+ years for the average of your accounts. Keeping your balances below 30% of limit is best.
While its commendable to be debt free, this does not eliminate the need to be able to borrow money. For instance, your house gets damaged during a storm and insurance only pays a pro-rated amount to replace your roof. How do you make up the difference? You have to be able to borrow. You will get the better interest rate based on your credit score. Also, you can work ahead of time and establish a line a credit with a bank or credit union.
Its a multi-year process to build up your credit report history. Virtually everything and everyone will use a FICO score or one of the other systems to grade your credit. Length of credit history is not considered acceptable until 7+ years for the average of your accounts. Keeping your balances below 30% of limit is best.
While its commendable to be debt free, this does not eliminate the need to be able to borrow money. For instance, your house gets damaged during a storm and insurance only pays a pro-rated amount to replace your roof. How do you make up the difference? You have to be able to borrow. You will get the better interest rate based on your credit score. Also, you can work ahead of time and establish a line a credit with a bank or credit union.
I ran into that similar issue 25 years ago. I closed accounts I was no longer using thinking I was being responsible. What I didn't understand was that both the number of active accounts and how long they have been open add to your credit score. They are used for your average and can help keep your score from dropping to much if you need to open a new account.
Check out Credit Karma and monitor your score. I doubt you will see that your Debit card being reported to the credit bureaus.
Well a smart man would pay cash for it. Since I have no more debt, I pay myself $2000 a month (that used to be payments) to put into mutual funds. Thats $24k a year cash plus 12% growth. If I need $20k tomorrow, I have it there.
Plus I keep $10k setting in savings for an unexpected emergency (insurance).
lol, smart or not, I got money for once in my life.
Hows that workin fer ya?
Question with regard to this statement. Our debit cards with USAA are also able to be used as credit cards. Would cards like that still be shown on a credit statement? (I've not checked with credit monitoring or credit agencies in years.)
Yes my debt/VISA shows up on my report.
That's interesting. It must not be just a Debit Card then. None of my Debit cards from either the bank or credit union are on my credit report. But my credit card from that same bank and credit union are on my credit report.
Well it's a VISA and I can choose to use credit when paying, although not sure how that works cause it still take the money from my account same a a debt transaction?
Similar threads
