Skip to comments.My Credit Score is Better Than Yours (VANITY)
Posted on 08/21/2007 1:00:50 PM PDT by the_devils_advocate_666
I just went through the process of getting my wife a new (well, 2006 anyway) car. I had wanted to save enough to pay cash but my old car wasn't going to hold out quite that long. So off to the bank to secure the extra funds. In the process I found out today that my credit score was 819. The loan officer said he'd only seen one higher score. He's young, so maybe it isn't all that great, but...
What does a credit score like 819 do for me? Is there anyway I can leverage this to my advantage in the future? What's the highest possible credit score?
“””How can child support, on an almost 18 yr old, be retroactive? You must have had a terrible attorney”””
In the State of Florida, and I’m assuming elsewhere, child support laws are set up strongly to favor custodial parents. Did I think this was possible? Did my attorney think this was possible? NO! The female judge sure thought it was possible, and she thought it was just.
Translation: Act your wage.
I like your attitude--perhaps because it is not very different from my own.
As concerning your desire to pay off your mortgage, I would strongly suggest that you procure an amortization schedule. When we refinanced our condo in the early 1990s, a co-worker of my wife offered us this tip. And it worked. Big time!
At the time of our re-fi, we owed about $40,000. By making an extra principal-only payment each month (NOTE: this is a separate transaction; it must NOT be conflated with the regular monthly payment), we saved over $19,000. Not bad, since that is about half of the beginning balance.
In the beginning, we were able to retire an entire monthly payment for around $5. (No, that is not a joke!) Although the amount of principal rises gradually, it does so at the rate of only about a dollar or two per month--a negligible amount.
I truly hope you will try this (assuming, of course, that the terms of your mortgage do not authorize the lien-holder to penalize you for making pre-payments). It saved us a real bundle of money--as well as retiring our final debt.
(NOTE: Even if you itemize when you do your taxes, and take the home-mortgage deduction, that does not come anywhere close to saving you the kind of money that this will.)
Saw mine for the first time as part of an identity-theft program (reputable company).
It’s probably not worth worrying about small differences. I saw some interesting explanations for my score (around 800).
First, I have a couple of credit cards that I usually don’t use (keep them as a “safety” back-up). It turns out that will lower a score by some (small) amount.
Also, one credit-reporting organization said I had a balance of about $2,000 on a card, which also was supposedly a negative. Turns out I always pay off the card I use monthly
so it was somewhat of a surprise (if the report had been done one week later the balance would have been zero!).
Finally, big purchases (such as a car) are always paid in cash, so the credit-reporting organization has no info to make an estimate (sounds almost like what’s been happening in the sub-prime mortgage market?).
I suspect the person who said 720 or above is good has it right.
Some credit issuers will allow an individual to open multiple cards. Others won't. Go figure.
Plus, the 30-40 figure included business cards, which (apparently) generally have higher limits than individual cards.
Apparently it gives you an excuse to post a vanity telling us all about your credit score.
"So who can top my 819?"
Very telling comment. Had you just been interested in what your credit score really could do for you, you could have asked your banker or CPA, or you could have posted a one line vanity asking what a credit score of 819 was worth. But instead you give us the whole story and then challenge everyone else to try and top yours.
Just my $0.02, and worth exactly what you paid for it. ;-)
First off, 780s is nothing to sneeze at and more than “good enough” as 720 is about the highest most lenders expect - anything higher is gravy.
Secondly, if you have “too little” credit, it can impact your score negatively, since there’s less ‘track record’ to go off of.
Keeping your credit card balances at 1% to 9% of total limits, with no more than 4 cards with balances, is the best.
gap coverage is best gotten thru your auto insurance agency. you can take it off at anytime that way. if you get it thru the dealer, they charge you for coverage for the full term up front, then add it onto the loan.
as far as financing.. some of us feel greater need to have a reliable vehicle. if it were just for me, i’d buy a beater for cash, but having wife and kids, i feel more comfortable with a car with a warranty, that i know is going to start every time i stick my key in it.
Actually, it’s better to borrow the million WHEN you have a million - so as to keep the million earning money for you in interest or investments.
My Brother in law went to a bank to get a car loan, after checking his fico score they asked for the calender back and check that they got all their pens.
Funny how they never manage to make a child support decrease retroactive to the day you lost your job...
It's usually about $200 for the life of the loan.
For my family, it's important because the cars we buy are good quality but suffer from rapid depreciation (think Mitsubishi or Hyundai here).
It may not have made a difference. Each creditor (credit card company, mortgage lender, etc) reports once a month, on the same day. What you need to do is find out what day of the month that credit card reports, and pay it all off but 1% of the limit. Then pull credit a couple days later. Then feel free to pay the remainder off.
Reason is that the best balance is to use the card, but not too much - in other words, use between 1% and 9% of your available credit.
However, at your score, who really cares? You're far above 720.
For more on this I recommend the 1996 bestseller, The Millionaire Next Door, which points out that most American millionaires are not ultra-high earners; rather, most are ordinary Americans with unremarkable lifestyles, who simply live way beneath their means, and save the difference.
Thanks, it does make sense after all.
I believe part of the score is payment history. No history, no score.
does gap availability vary by state? i had gap when i went thru progressive.
The millionaire will buy a 3 or 4 year old Toyota while the Joneses buy a new BMW...stuff like that.
If you have to buy Gap insurance, you may need to rethink what you are doing.
Thanks, RockinRight said the same thing.
Hey, do you think I can convince my husband to let me shop more? I could use a new wardrobe.
What if, instead, you paid a million CASH for your house, and then put the money you WOULD have been paying out in mortgage principle and interest each month for the next fifteen or 30 years into investments? In pretty short order you'd have your million back and earning 10% again, AND you'd have a paid-for house!
If I’m debt free, own a house and car, have only 1 active credit card, am I an automatic max score?
My HELOC keeps mine down in the high 700’s. Oh well.
Exactly. It is my understanding that when Sam Walton died, he drove a seven-year-old Ford pickup. And he was a billionaire (with a "b"), about two or three times over.
The father of my closest friend in the late 1960s and early '70s lived in a working-class neighborhood and drove an automobile that was nowhere near new. And he was a millionaire--at a time when a million dollars was the equivalent of several million today.
Not necessarily. The coverage protects (to an extent) the borrower in the event that the collateral auto is totaled, and the insurance proceeds are less than the loan balance. Living in Northern Virginia, especially with plenty of illegals driving about (some without insurance), means we should probably buy this coverage.
It's the same way with collision and comprehensive coverage.
If I had cash to pay for a car and to replace the car, in the event of an accident or other damage, then I would not really need all of those coverages, now woudl I?
Wow, smacked down in my moment of gloat!
I think the thread’s stayed remarkably on track considering what FReepers are capable of. ;)
I’m saying borrow the million as a mortgage, leave the other million alone in my example.
$1,000,000 earning 10% per year after 30 years:
Cost of borrowing $1,000,000 for 30 years at 7% interest:
$2,395,087.20 in principal and interest at an amortized payment of $6653.02/mo principal and interest (we don’t count principal in cost since it is re-added to home equity and assets)
Net result, not including tax benefits of a mortgage:
$15,054,314.80 plus a paid-off house at the end of 30 years.
Spend the million on the house. You now have zero. Let’s forget for a moment the inherent risk in spending every dime you have.
Put the mortgage payment equivalent in an account earning 10% - that’s $6653.02/mo for 360 months. With no interest deduction. The interest deduction matters because you’re investing what your interest would have been, so your monthly outgo is the same.
Total Investment Value after 30 years in this example:
$15243 more to take the loan and leave the million alone. Not a huge difference, until you consider that it would also take the ENTIRE 30 years to build up the same amount you would have had had you left the million alone. Also - you have to consider the tax benefits of a mortgage.
Hey now, don't give the other FReepers ideas :P
The wealthiest people I knew growing up (worth ~$50-100 million in the '60s) drove Fords.
That's way, way over my pay grade... and credit score. ;)
“If you can verify income, the reserves requirements in addition to down payment funds should have been no more than 2 months worth of mortgage payment.”
“What repairs were needed? They might not have been as stupid as you think.”
Reattach loose trim strip in bedroom, seal joints in (seamless!) gutters, repair torn screen, etc.
“What area are you in BTW?”
North Central WV.
I do realize that my loan was different. The house was an FHA repo. I took advantage of one of their year end inventory reduction sales and was able to get the house for $100 down and a whole lot cheaper than its appraised value. I have a few year old appraisal of it that had not taken into account the increased property values in the area, the new windows, new roof and lots of other things. I know the comps that their appraiser used and he scratched the bottom of the barrel. I am a cheap b#stard and made a rediculously low offer. FHA took it. I should have told the bank what to do with their loan, but that would have meant scrapping my contract with the FHA.
BTW - I had the loan officer state in email that I was required to use a certain appraiser, because he was the only FHA approved appraiser in our area. There are actually 13.
I bet I got the longest credit report.
Both! The beauty of credit is it allows one to borrowoney at favorable rates without losing the principal. It’s a way to get a bit of leverage if used sanely.
She left him with a 700,000 dollar mortgage and 85,000 worth of credit card debt.
They were a two earner couple with twin Mercedes with car notes.
The wife makes about twice as much as him being the administrator of a large community business.
He has a very good attitude and told me jokingly that his credit score was zero after filing for Chapter 7.
However,he is getting all kinds of credit card offers and the local car dealer/salesman called to say he had a hell of a deal on a new Lexus.
LOL, you are so right. It's a great thread, I'm glad it was posted.
Several credit card companies will give a recently-bankrupted person a $300 limit on an unsecured, but high-fee, credit card.
It’s actually a good way to re-establish yourself. The companies charge such high fees to start with, they figure they have little to lose issuing the card. Besides that, a person can’t file bankruptcy again for 7 years, so they can’t walk away that easily.
Since I never use debt, I have no reason to know my credit score.
My credit Score is in the dumper...so you win! Congrats!
I had a 825, paid off my house, 1 yr later when I went to get a loan for 30 k to buy a new house, it went down to 809. I never paid a dime of interest on a credit card, have always paid off any car loan in 6 months, and dump thousand a month to get rid of this 30k loan which is now down to 8k. These good rates generally get you a better rate when getting any loan. they also refer to how much debt a bank is willing to risk on you.
That is a commonly held misconception. If you are shopping for a mortgage or an auto loan, a number of credit checks from various inststutions over a reasonable time period are expected. You are, after all, only seeking one mortgage or car loan. On the other hand, if you are shopping equity loans, personal lines of credit and new credit cards all at the same time, that becomes a red flag to the lenders.
My dog has a credit card, and his credit score is really high. It’ll probably get shaved a few points next week when he buys a fishing boat.
Last time I checked my Trans Union credit score it was +931 out of a possible +934.
One other thing to try is use an interest only line of credit to buy your car. I have one as my 1st lein on my mortgage. on a 10k loan you may only pay 72$/mo for this 10 k, which gives you xtra money to apply to the principle. as your principle goes down so does your payment, but if you end up short of money in a month, you arent stuck with a 250$ car payment, howver as your balance gets down to 5 k etc.. your interest payment is very small. this is how I went about paying off a 90k mortgage in 4 yrs.
My wife and I have a 1725.