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Author Topic: How much do you value your credit score?  (Read 9904 times)
Kluge
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August 05, 2012, 09:03:10 AM
 #21

I just think it is sort of a sucker score. My understanding is that if you always pay your debts you will have a decent credit score. But the dream customer not only pays, he/she also is prone to getting into debt. Being debt averse (arguably being responsible) will limit your score.
As far as not being able to get credit, so far this has not been a problem. I know the rating agencies say you must have a score. Just like the credit card companies say you need a card. They will say "How will you rent a car?".  Roll Eyes
If I wanted a score I could get it back quickly. Last time I had one the banks were ridiculous in their offers to me. The amounts they said I could borrow were way too much money. Someone has to be the grown-up and the banks are not up for that task.
That's correct, and many parents "start their kids off on the right foot" by adding kids to their own debt accounts. For "the best" score, you want to utilize credit regularly, but not "over-utilize." If you have 3 cards you can put $10k each on, and care about your credit score, it's best to "diversify" your debt instead of maxing one out because it has a marginally better interest rate. I learned that from maxing out 0% APR credit cards, only to find the offers dried up even when I had almost nothing on the xx% cards and my credit score dropped from around 800 to the mid 600s. This eventually corrected after paying off the credit card when the promotional rate expired.

They also don't credit your score when you pay bills on time (rather, I assume these companies don't report it to the credit agencies), but if you slip up and miss a payment, you'll sure get a huge penalty.

There are flaws, for sure, but it's a mutually-beneficial system, I think. They offer you boatloads of cash because they trust you. There's pretty much just a "no trust" and "trust" threshold. If lenders don't trust you, you're unlikely to get anything substantial. If lenders trust you, you'll get more than you might be able to pay off, because they assume you're responsible and intelligent enough to self-limit yourself as necessary. Basically, they treat you like a reasonable human being with a basic set of ethics. It's very difficult to distinguish between someone who's penniless as a result of tough luck and someone who either has no intent to pay back, or is "overly-optimistic" - so, the idea is that loans should go to people who have a lot of money, already, and steady income, but need more money to expand. Of course, banks hide the "I don't trust you" statement with numbers to pretend it's a purely objective decision (and some loan officers really do base their decision entirely on what the computer spits out) so they don't have to deal with suggesting to an individual that they appear to be unethical, have too high of expectations for themselves, or are just asking for more than they're worth.

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August 08, 2012, 06:46:19 AM
 #22

I could care less about my credit score in the monetary system we have with fiat money.

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August 08, 2012, 09:49:04 PM
 #23

I just think it is sort of a sucker score.

A number of years ago, when I was an almost starving grad student, I called the bank and asked if I could increase my wife’s credit card limit to $800 so I could pay tuition without having to drive a half hour to where the bank was to pick up cash.  The lady ran a credit check on both my wife and I and the only thing that either of us had was that one little card (that we paid off in full each month).

She then asked me several questions.  Do you have a car and if you do, what are the monthly payments and amount you owe?  What is your monthly rent?  Do you have any student loans?  Hospital bills (she knew we had two small children)?
 
I owned two cars, bought them used and paid cash.  Had a mortgage (with a really low interest rate from a private lender outside the banking system). Neither of us ever took a student loan (if I couldn’t afford school, I dropped out for a semester).  No medical bills (we did home births with a midwife – paid cash).

Finally she said  “How do you have two cars, a house, no loans, and yet are invisible in the banking system?”

I explained “To get a credit score, you need to borrow money from the banks. If you borrow money you pay interest. Paying out interest is losing money.   If you have to borrow money, you can sometimes find it cheaper outside of the banking system.  Therefore a higher credit score just shows that you are losing money to the banks.”

She paused for a little while and then said “I have never thought of it that way, but you are right.”

She increased my credit card limit to $2500.

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August 09, 2012, 04:33:13 PM
 #24

Haha @Bees Brothers. I guess a bad credit score is your reward for being responsible. This from the same industry that rates junk bonds as AAA.

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August 09, 2012, 04:51:13 PM
 #25

I just think it is sort of a sucker score.
Therefore a higher credit score just shows that you are losing money to the banks.”

Get a credit card.  Pay your balances in full, monthly, then there are NO FEES.  Free credit score.
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August 09, 2012, 05:28:07 PM
 #26

I just think it is sort of a sucker score.
Therefore a higher credit score just shows that you are losing money to the banks.”

Get a credit card.  Pay your balances in full, monthly, then there are NO FEES.  Free credit score.
Free low credit score. Banks do not want you if you pay off with no fees. That's the thing, a high score means you will borrow more than you can pay off and will go into debt. The credit business is about getting you in debt, not lending you money.

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August 09, 2012, 06:31:00 PM
 #27

Haha @Bees Brothers. I guess a bad credit score is your reward for being responsible. This from the same industry that rates junk bonds as AAA.

Having a non-existance (bad) score didn't seem to hurt at all.  They still did what I wanted.

A few years later when I went to get a "real" mortgage, they were concerned that I didn't have any credit history other than that little card.  The private mortgage wasn't reported, but the lender did write a letter saying that I always paid on time and usually paid extra.  Having lowered the loan a bit (impressive when your a starving student) plus all the improvements I did, the appraisal showed significant equity.  They gave me the loan.

Again showing that the scores aren't that important.

A few years later (after getting a full time job - but still a grad student) I got a loan for a 2nd house, still with only 2 accounts in my credit history (neither with any late payments).  No problem getting that loan.

Bottom line, if a person seems credible and low risk, they will be happy to lend you money and receive your interest payments.

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August 09, 2012, 06:46:59 PM
 #28

I just think it is sort of a sucker score.
Therefore a higher credit score just shows that you are losing money to the banks.”

Get a credit card.  Pay your balances in full, monthly, then there are NO FEES.  Free credit score.
Free low credit score. Banks do not want you if you pay off with no fees. That's the thing, a high score means you will borrow more than you can pay off and will go into debt. The credit business is about getting you in debt, not lending you money.

I have not had the same experience.
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August 09, 2012, 07:51:47 PM
 #29

Somewhat related= I took a closer look at 80 acers of forest up north. The owner is fine with financing up to 60k as a private investment. That's almost the total price and more than I need. I told him of my opinion of credit scores and he was even more eager to business.  Wink
'm thinking about creating a wolf sanctuary with the land. We just got a crazy law to hunt wolves. Sad, as they are about the most non-threatening animal in th forest.

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August 09, 2012, 09:01:05 PM
 #30

Not having a credit score = a lot less options in common financial markets.

Clever???

 Roll Eyes
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August 10, 2012, 02:40:28 PM
 #31

Not having a credit score = a lot less options in common financial markets.

Clever???

 Roll Eyes
That is what I was told, but that is not what I see happening. Anyway my banker told me that if you have no score they rate you at about a 660. So I suppose I effectively still have a score. He then went on to say that they know me and would work with me, score or not. One may not be able to get that kind of co-operation from a big national bank, but I choose a small local bank after looking into their lending practices and their risk exposure. I feel like the only money I'm missing out on is the money no one should be offering me in the first place.
Besides, I choose not to participate in "common financial markets". I don't think they know what the hell they are doing anymore. As evidence I point to fact that they have broken the whole world.

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August 11, 2012, 09:52:09 AM
 #32


 With inflation it can be very tempting.
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June 28, 2013, 06:58:14 PM
 #33

Just an update. It has been hard, but I am still maintaining my un-scoreable status. I am looking at buying some more land on the Ice Age trail and found a seller who values cash a lot more than credit scores. I am more convinced than ever that I do not need one. 

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June 28, 2013, 07:06:16 PM
 #34

Yes, I value my credit score quite a bit.  Leverage is a great tool to enhance wealth if used responsibly.  I have a 0% loan for 18 months, something cash cannot do.  Same with margin accounts, goodluck shorting something with no credit score.  Not to mention certain jobs take into account your credit score in order to be hired.  Cash and credit are not mutually exclusive, you can and should have both.  The problem is not credit, it's the management of credit that gets people in trouble.

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June 28, 2013, 08:23:16 PM
 #35

My credit score went to hell due to a dispute with Verizon.

End of the dot.com era, 2001, I had one month left on my cell phone contract. I had a $500 deposit.
Out of a job because my dot.com went dot.bomb, I called Verizon and told them I would not be renewing my contract.

They said fine. I asked if my last month could be deducted from the deposit. She said sure, she'd set that up, I'd get my deposit back less the last month's fee. Great.

Several months went by, I still had not reveived the check, but I received my last bill showing a negative balance equal to $500 less my last months pay.

Then I got a call from a bill collector. He wanted to collect for my last month. I told him what was up, and he said that wasn't his concern, he wasn't verizon - he was just paid to collect, I had to talk to them.

So I called them, told them what was up, and they said "We don't work that way, by not paying your last bill you forfeit the $500 and you still owe us the last month."

For years, every few months I'd get a call from a bill collector and the amount they claimed I owed kept going up. I kept telling them to have Verizon take me to court so a judge could see how absurd it was, but of course Verizon never did that. Instead they kept reporting my alleged debt to the credit unions, and fucked over my credit.

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June 28, 2013, 11:36:44 PM
 #36

I don't really care what banks think, I have as much credit as I'd ever need within my circle. If I buy a house, I have family that would even take a loan in their name because they know I'm good for my word and money.

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June 29, 2013, 12:05:18 AM
 #37

I value mine because I want to buy a house some day, and that's the only thing I plan on going into debt for.  Sure, if you save up a shit ton of money, you can probably buy a house in cash some day, but you're actually probably better off paying the mortgage, especially if you're buying at today's interest rates.  If you can do better investing in the stock market whatever the percentage you're paying on a mortgage, then you're better off with a mortgage than without one.  If you can't, you're better off just paying off a house as quickly as possible.  I feel like I could do better in the stock market and the mortgage interest rates would have to go up substantially for that to change.

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June 29, 2013, 12:30:11 AM
 #38

I value mine because I want to buy a house some day, and that's the only thing I plan on going into debt for.  Sure, if you save up a shit ton of money, you can probably buy a house in cash some day, but you're actually probably better off paying the mortgage, especially if you're buying at today's interest rates.  If you can do better investing in the stock market whatever the percentage you're paying on a mortgage, then you're better off with a mortgage than without one.  If you can't, you're better off just paying off a house as quickly as possible.  I feel like I could do better in the stock market and the mortgage interest rates would have to go up substantially for that to change.

I don't think credit extends to outside your home country really, right? Say I live in the US and wanted to buy a house in Canada

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June 29, 2013, 01:49:07 AM
 #39

I value mine because I want to buy a house some day, and that's the only thing I plan on going into debt for.  Sure, if you save up a shit ton of money, you can probably buy a house in cash some day, but you're actually probably better off paying the mortgage, especially if you're buying at today's interest rates.  If you can do better investing in the stock market whatever the percentage you're paying on a mortgage, then you're better off with a mortgage than without one.  If you can't, you're better off just paying off a house as quickly as possible.  I feel like I could do better in the stock market and the mortgage interest rates would have to go up substantially for that to change.

I don't think credit extends to outside your home country really, right? Say I live in the US and wanted to buy a house in Canada

Actually, it looks like it does.  I just looked up FICO scores, which is what the credit scoring system is in the US, and there is also a Canadian site for TransUnion, one of the credit scoring agencies.  Given that they have a Canadian site, I'd say that it's likely that the FICO scoring system also exists in Canada.

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June 29, 2013, 02:22:22 AM
 #40

I don't really care what banks think, I have as much credit as I'd ever need within my circle. If I buy a house, I have family that would even take a loan in their name because they know I'm good for my word and money.

Even with my bad credit as a result of being unemployed for six months and the dispute with Verizon, I was able to buy a house - but I had to do it through a credit union, regular banks wouldn't touch me.

I have two more payments and it is paid off, never having missed a payment.

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