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Old 08-19-2016, 10:38 PM   #41
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Paid off mortgage 18 months ago. No loans. Two credit cards and retired 5 months ago. FICO of 850
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Old 08-20-2016, 05:19 AM   #42
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Braum, I would pick one of the oldest cards and keep that one active, maybe pulling it out of the drawer a few times a year to use, and cancel any others you don't want to keep.

I generally keep open 3 or 4 older cards with no annual fee just to have the steadying effect, because I open new card for bonuses/miles/points every year and close them after a year. My scores are in the low 800s. I don't have a mortgage but I keep a HELOC that is not used open as well.

One interesting thing I've done a couple of times is add friends as authorized users (I keep the cards) to help with their scores. This one easy thing, done with 3-4 of my cards, will bump up their scores nearly 100 points, even when they have old, bad marks.
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Old 08-20-2016, 10:23 AM   #43
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Originally Posted by eta2020 View Post
...
TransUnion shows long history of single credit card.......
This could be the issue, you should have more than one CC just for safety sake.
I always like to have at minimum a Visa and MC, because some places will not take one of them (it is rare, but has happened more than once).

Also if your number is stolen, or the card lost, it will take a while to replace, so it's nice to have another handy.

Finally, if you have one CC, why not 2 , just use the second one once every 6-8 months to keep it active.

You can even be paid to do this, AARP just sent me an offer - will pay $100 if I get the card that has no annual fee and spend $500 within a few months of getting it. And it gives a crazy 3% back on gas and restaurants.

The key is, it costs you nothing to get it, they pay you, and it costs you nothing to keep it, plus it will raise your credit score.
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Old 08-20-2016, 11:20 AM   #44
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This is OP. Just to update you. So I decided to obtain one more Credit Card that is very difficult to get and has 0 annual fees. ( I would not pursue card with fees)

I submitted application. Next screen told me call them. I called them to verify few things and without any problem was approved. Normally this card is out of reach for FICO under 740. My FICO of 660 did not come up during application process.

I agree with posters that in general it is better to maintain good FICO.
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Old 08-20-2016, 02:39 PM   #45
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I opened two new credit card accounts early this year, plus I increased my limit on the old Fidelity AMEX in anticipation of the switchover.

As a result, there were three hard credit inquiries, and two new accounts. I watched my FICO score gradually drift down over the late spring and summer, and it dipped just below 800 one month. But it's popped back above 800 now and is higher than several months ago. Maybe it will keep drifting back up and get back to where I started the year.
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Old 08-20-2016, 02:40 PM   #46
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Well I was able to get other 2 reports and they were flawless with single credit card over decades. (or more like last X years)

I doubt I would not be able to negotiate lowest mortgage rate if I wanted it.
If you only have one trade on your credit report your score will always be on the lower side of any scoring algorithm. Think of it as reading online reviews of two e-bay sellers - one with only a single glowing review, and the other with numerous positive review. Both might be great, but who would you have confidence in as being the better seller - that's the logic for the "Number of Trades" variable used by most scores. Your credit utilization might also be higher than it would if you had multiple cards. If you care to improve your score you may want to open another card or two or three over time. My personal bias though is that it's not worth it if you have to pay an annual fee on any of those.

If you aren't expecting to borrow in the future this may all be a moot point, other than potentially some minor improvement in your car/home insurance if you shop those in the future. If you don't plan to shop insurance that too is moot, since most carriers aren't re-running credit on renewals (and if you live in CA, HI or MA it's not used).
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Old 08-20-2016, 06:27 PM   #47
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This is OP. Just to update you. So I decided to obtain one more Credit Card that is very difficult to get and has 0 annual fees. ( I would not pursue card with fees)

I submitted application. Next screen told me call them. I called them to verify few things and without any problem was approved. Normally this card is out of reach for FICO under 740. My FICO of 660 did not come up during application process.

I agree with posters that in general it is better to maintain good FICO.
Just tell us this card came with a nice sign up bonus and that you made some money trying to raise your credit score.
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Old 08-21-2016, 10:41 AM   #48
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I don't quite understand your last sentence ("I doubt I would not", does that mean you think you could?), but if you mean you think you could get a low rate mortgage with a crappy FICO score and no significant income, you're very likely wrong.
That is exactly what I mean if crappy FICO is because you have you no history of having many loans/credit cards.

When it comes to mortgage they care much more about your debt-to-income ratio then what your FICO is. (When comparing 2 Households with identical income/assets) I assume someone FIREd has pretty good income from Dividends or pension.

With high ratio even 850 FICO will not help you.

If you pay off your mortgage and DTI goes to 0% your FICO will nose dive (if you have no credit cards or other loans). Do you think Bank will refuse to give you mortgage on vacation house because of that?

BTW it is that DTI ratio that decides how much of the house mortgage you can afford
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Old 08-21-2016, 04:26 PM   #49
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I do not believe that FICO has any idea what your/my investable assets are. Think about it. How could they?


They seem to collect CC data and loan data and magic those numbers up to come up with that number. I quit checking my FICO score, but when I did it seemed to vary from 800-825 for no reason at all. I use my CC to buy close to 100%of my stuff and have no loans.
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Old 08-21-2016, 05:34 PM   #50
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That is exactly what I mean if crappy FICO is because you have you no history of having many loans/credit cards.

When it comes to mortgage they care much more about your debt-to-income ratio then what your FICO is. (When comparing 2 Households with identical income/assets) I assume someone FIREd has pretty good income from Dividends or pension.

With high ratio even 850 FICO will not help you.

If you pay off your mortgage and DTI goes to 0% your FICO will nose dive (if you have no credit cards or other loans). Do you think Bank will refuse to give you mortgage on vacation house because of that?

BTW it is that DTI ratio that decides how much of the house mortgage you can afford
Retired folks have trouble getting mortgages because investments are not the same as job income. You can garnish job income.

Anyone who does not have Credit cards, is either very very poor at handling their money or is a bad credit risk, wait, that is the SAME thing....
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Old 08-21-2016, 08:22 PM   #51
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Originally Posted by eta2020 View Post
I assume someone FIREd has pretty good income from Dividends or pension.

With high ratio even 850 FICO will not help you.

If you pay off your mortgage and DTI goes to 0% your FICO will nose dive (if you have no credit cards or other loans). Do you think Bank will refuse to give you mortgage on vacation house because of that?

BTW it is that DTI ratio that decides how much of the house mortgage you can afford
If you are FIREd and living off of investments, either cash/interest or dividends, you have no income in the eyes of the mortgage company. A pension or rental income is a different story. But just living off investments will make it nearly impossible to get a mortgage.
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Old 08-22-2016, 03:52 AM   #52
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If you are FIREd and living off of investments, either cash/interest or dividends, you have no income in the eyes of the mortgage company. A pension or rental income is a different story. But just living off investments will make it nearly impossible to get a mortgage.
Personally if I did not get best mortgage rate I would pay cash so this is not something that worries me much. I am not against having single Credit Card which in my case is Costco Citi Visa, but I do not care about obtaining ton of credit since I simply have no use/need for it.

I probably would pay cash even if I did get best rate. I may not completely agree with following video but there is something to it.

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Old 08-22-2016, 07:35 AM   #53
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Your issue is one of the reasons we have not paid off a fully amortizing 10 year mortgage with 6 years left at 2.875%. It represents only about 6% of the fair market value of our primary residence but is the only debt we have. Even though I have been mostly phased out of the mortgage deduction during my working life, when I retire in December I will revert to being permitted to deduct about 50% of the interest. Also, although I have no intention of ever borrowing money again an excellent credit score provides benefits other than credit.

My view is that if the mortgage is painless and is at these very low interest rates it is better to keep it. Also, this is not an all or nothing proposition. Interest rates are still very low. Perhaps those that have a mortgage should payoff half and refinance the balance.
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Old 08-22-2016, 08:20 AM   #54
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Last time I checked was maybe a year ago at over 800. No mortgage for 20years, no debt except for a Costco-Visa and a MC CC that are paid off each month but we usually pay cash for everything. I froze our credit with all 3 bureaus so no one can take credit out in our name. Since we have enough to see us through to the end at our present comfort level I don't really care what our credit rating is. This is one thing I don't have to worry about.

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Old 08-22-2016, 08:26 AM   #55
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Anyone who does not have Credit cards, is either very very poor at handling their money or is a bad credit risk, wait, that is the SAME thing....
How does not having a credit card indicate a person is poor at handling money?
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Old 08-22-2016, 09:18 AM   #56
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For me, I didn't consider myself FI until I reached the point I no longer needed to borrow money. I accepted the fact I would never be able to get a mortgage and would pay cash for a home if moving. I only finance vehicles if the rate is less than what my investments yield and while I've got about a dozen different credit cards I pretty much only use the one with the highest rewards and pay it off each month.

What's interesting is my credit score is now the highest it's ever been (831) at a time I no longer need it.
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Old 08-22-2016, 04:17 PM   #57
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How does not having a credit card indicate a person is poor at handling money?
Someone good at handling money should not turn down free money by definition, and that is what is being done if you don't have a credit card.
  • Credit cards often give you free bonus and ongoing bonuses for having it.
  • They are loaning you money for free for a month until you pay it off, who else will loan you $25,000 like that if you need to book a trip for example.
  • Other expenses in life are cheaper because you have a good credit score (which credit cards help you obtain) examples are insurance and mortgage rates.
Now, I know folks who are poor at handling money and they wisely chose not to have a credit card because they are poor at handling money. If they have a credit card, it is like a demon monster yelling buy, buy, buy at them constantly and they rack up a huge debt on piles of useless stuff, that takes them years of misery to pay off.

Credit card companies usually pay me between $500 and $1,000 per year in bonuses and benefits, while making my life easier and safer than carrying around hundreds to a thousand dollars all the time.

There are some other folks who don't carry credit cards, but they are a very low percentage of the population. The paranoid ones who don't want the government to track their spending, or know what store they bought stuff at, and credit cards allow this (so do loyalty cards).
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Old 08-22-2016, 04:31 PM   #58
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According to Sunset, I got better at handling money today. I never have pushed for best CC,because I have too many in a filing cabinet never used. However, I bought about everything on one paying balance in full each month and getting 1% cash back. Noticing I rarely took advantage of the 5% categories, I accepted another CC I own offer today to switch to a 1% on purchase and 1% back on payment. So to the filing cabinet you go, Chase. Citicard is now in the starting lineup and I am 1% smarter with my money.


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Old 08-22-2016, 05:43 PM   #59
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Now, I know folks who are poor at handling money and they wisely chose not to have a credit card because they are poor at handling money. If they have a credit card, it is like a demon monster yelling buy, buy, buy at them constantly and they rack up a huge debt on piles of useless stuff, that takes them years of misery to pay off.
I only have one CC because I like simplicity just like I like simplicity in my investing.

That being Costco I imagine cancelation of Amex and now having new credit Visa from Citi is what had driven me down to 660. It also looks like I carry huge balance but it is payed off every month.


I am far from poor in handling money
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Old 08-22-2016, 07:28 PM   #60
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Right well your beef is with FICO not with us. No one said you were poor at handling money.
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