The White Whales - Perfect Credit Scores?

[disneysteve]

Would you please explain how an 850 is a sign of passing up free money? We use our credit cards for almost everything including paying utility bills each month. Paid in full each month. Our cards are cash back card so we do earn rewards. I’m just not understanding exactly what you mean.

Thanks!

I'm guessing they mean you could be playing the credit card reward game more aggressively, getting sign up bonuses and such. That would lower your score but get you hundreds or thousands in rewards.

 

[jazz4cash]

Would you please explain how an 850 is a sign of passing up free money? We use our credit cards for almost everything including paying utility bills each month. Paid in full each month. Our cards are cash back card so we do earn rewards. I’m just not understanding exactly what you mean.

Thanks!

Maybe because paying the balance off early means you are giving up the float? I don’t think anyone knows the formula well enough to say for sure what it takes to get 850. My scores run 790-830 usually but I met with an auto finance guy and he said my score was 858…..out of 900.

 

[jazz4cash]

Nope, never an 850 for me.

And not gonna even try. About twice a year I'll forget to pay one by the due date. Yeah, my fault. Buried under the stack, fell off the back of the desk...

Yeah, I'm imperfect -

I don’t think they ding your score unless you are 30 days late.

 

[RobbieB]

Na, I see the ding the month after on the ole disco bill. I run between 780 and 810.

 

[disneysteve]

I don’t think anyone knows the formula well enough to say for sure what it takes to get 850. My scores run 790-830 usually but I met with an auto finance guy and he said my score was 858…..out of 900.

There are different credit scoring systems. The FICO one that most of us are familiar with and typically refer to when we are discussing credit scores, goes to 850 but there are others that use a different scale.

 

[foxcreek9]

I'm guessing they mean you could be playing the credit card reward game more aggressively, getting sign up bonuses and such. That would lower your score but get you hundreds or thousands in rewards.

Exactly, the money is in the bonuses, banks are tripping over themselves to give you their cards. If you have self control and organizational skills there are a lot of free hotel nights, flights, and cash back available.

 

[audreyh1]

My score always explains that it would be higher it I had some revolving credit. But I’m not about to get a car loan or buy some appliance on credit to increase my credit score further. Too much hassle!

 

[foxcreek9]

My score always explains that it would be higher it I had some revolving credit. But I’m not about to get a car loan or buy some appliance on credit to increase my credit score further. Too much hassle!

The other, easier way, is more credit availability with CCs. If you have one card with 10k limit and you put 3k of spending on it, that hurts your score (using 30% of credit). Now if you have 4 cards with a total 100k limit, same spending, you are now down to 3% of credit - your score goes up.

Bottom line, your score is irrelevant if you have no need or desire to get a loan or play the CC game.

 

[audreyh1]

The other, easier way, is more credit availability with CCs. If you have one card with 10k limit and you put 3k of spending on it, that hurts your score (using 30% of credit). Now if you have 4 cards with a total 100k limit, same spending, you are now down to 3% of credit - your score goes up.

Bottom line, your score is irrelevant if you have no need or desire to get a loan or play the CC game.

Yeah, I’m done with more CCs. I already have more than I need and have let some lapse (be closed) due to lack of use. My credit reports are frozen so I avoid opening new accounts these days.

 

[dm]

The wife’s is 834, I just checked. I looked at her discover card account. I don’t know what mine is. We’ve been married now 42 years and all the credit cards have been in her name. I’m just a add on.

I’m the one that makes sure the bills are all paid and I guess she gets the credit.

 

[Koolau]

The wife’s is 834, I just checked. I looked at her discover card account. I don’t know what mine is. We’ve been married now 42 years and all the credit cards have been in her name. I’m just a add on.

I’m the one that makes sure the bills are all paid and I guess she gets the credit.

Yeah, DW opened a checking account here in the Islands when we moved and she added me later. I wonder if that's why she's always a few points higher than I am. Doesn't really matter, but once in a while she points it out to me.

 

[Music Lover]

Having left the US and its bizarre and somewhat deeply intertwined system of debt encumbrances I see things very differently now. In Europe, there is no such thing as credit scores as credit simply doesn't exist in the sense it does in the US. Thi sis an entirely US concept and I believe it was introduced deliberately and very slowly into the US socio-economic system to encourage indebtedness. In a sense, this is a form of debt slavery as it ties you completely to your debts. Not having debt causes your credit scores to drop like a stone. Complete freedom is not having any debt whatsoever and this is not something encouraged in the US. I get these emails all the time stating my credit score is dropping. This is because we have 2 American credit cards which we use all the time and pay them off completely each month. This makes us "bad" customers as they can't earn off of us twice, once at the transaction phase where they get 3% (they even rake in roughly 1% off currency exchanges despite Chase declaring there would be no such a thing but it happens at VISA and not the Chase level) and again off servicing the debt. For us, we are not as profitable so are "punished" with lower credit ratings which are meaningless here. I laugh at the inability for us Americans to see where the banks have taken us. The same for mortgages or car loans.

I'm in Canada and have never known or cared about my credit score.

 

[pb4uski]

I'm in Canada and have never known or cared about my credit score.

Interesting. I'm in the United States and have never known or cared about my credit score.

 

[Koolau]

That's a pretty broad brush, isn't it ("us Americans")?

Uh, I think he's talking about my BFF (and his ilk) who is half a mil in debt (assets minus liabilities) at age 79. He has half a dozen credit cards - maxed out, of course. He is a very "good" American! The banks just love him.

 

[rmorris50]

Perfect credit? Congrats you get to pay more on your mortgage!

https://finance.yahoo.com/news/mortgages-homebuyers-good-credit-cost-135954525.html

 

[Kabowest]

At this point in my life it is more of entertaining my curiosity opposed to actually caring. Currently sitting at 834. Maybe I'll hit 850 by end of plan. ;-)

 

[Koolau]

Perfect credit? Congrats you get to pay more on your mortgage!

https://finance.yahoo.com/news/mortgages-homebuyers-good-credit-cost-135954525.html

Yeah, I've seen several stories on this. 3 years ago, I wouldn't have even considered that it was real.

 

[MichaelB]

Perfect credit? Congrats you get to pay more on your mortgage!

https://finance.yahoo.com/news/mortgages-homebuyers-good-credit-cost-135954525.html

This link is, to put it politely, misinformed, and there’s no explanation in the post to let members know what the point is.

Beginning May 1 the closing fees will change for loans guaranteed by Freddy Mac or Fanny Mae. Borrowers with high credit scores will pay a bit more, and first time borrowers with lower credit scores will pay a fair amount less. Low credit score borrowers will still pay a considerably higher fee. Here’s a link explaining the change https://www.usatoday.com/story/mone...ge-fee-structure-change-may-2023/11713841002/

From the article

Starting May 1, upfront fees for loans backed by Fannie Mae and Freddie Mac will be adjusted because of changes in the Loan Level Price Adjustments (LLPAs), the fees that vary from borrower to borrower based on their credit scores, down payments, types of home and more. The changes relate to credit scores and downpayment sizes.
./.
For example, if you have a score of 659 and are borrowing 75% of the home's value, you'll pay a fee equal to 1.5% of the loan balance. Before these changes, you would have paid a 2.75% fee. On a hypothetical $300,000 loan, that's a difference of $3,750 in closing costs.

On the other end, if you have a credit score of 740 or higher, you would have paid a 0.25% fee on a loan for 75% of your home value before May 1. After that date, you could pay as much as 0.375%.

 

[rmorris50]

I did not take reading the article to mean good scores will pay more than low scores in an absolute level sense. But re-reading the title I can see how someone might interpret it that way.

 

[Koolau]

This link is, to put it politely, misinformed, and there’s no explanation in the post to let members know what the point is.

Beginning May 1 the closing fees will change for loans guaranteed by Freddy Mac or Fanny Mae. Borrowers with high credit scores will pay a bit more, and first time borrowers with lower credit scores will pay a fair amount less. Low credit score borrowers will still pay a considerably higher fee. Here’s a link explaining the change https://www.usatoday.com/story/mone...ge-fee-structure-change-may-2023/11713841002/

Yeah, getting news from Yahoo isn't always the best way. Thanks for the better link.

I'm sure you're right on the details, but the effect is the same if you have a high FICO score. With a high enough FICO score, you will now pay more on May 1 fees than you did April 28. Not to quibble, but a "bit" is a fairly loose term. My score would cost me more per month than I pay for my Cell package but YMMV.

I'll leave the "point" to others.

I've always found FICO scores to be a bit nebulous, but higher fees for higher scores are not.

 

[Midpack]

Never cared, but I just looked and we're 816. But I've been told those with no debt who pay everything off immediately can't have a perfect credit score? In addition we've had credit freezes in place for more than 10 years, so I'm not sure what data is used.

 

[Dtail]

No one on the site cares about their scores, but perhaps it appears that is not true for some.
A non intuitive comparison is in Pickleball for all those that say I don't care if I win, as long as I play well. BS.

 

[jebmke]

I don't know what my score is. I've never known.

 

[Time2]

I didn't know my score until my bank started posting a FICO score link on my account page. Was over 800, but during the last year I took out a loan on my Heloc and paid it back and took out a second Credit Card. That added 15 points. I said once I retired I would not need any credit, well that was wrong. Borrowed once to help one kid with a house and again just to have an Amazon CC, I had to fight to get that. I didn't have enough credit!

 

[Walt34]

I didn't have enough credit!

That can and has bitten a lot of people. A guy I worked with had a hard time buying a house because all his life he'd paid cash for everything, furniture, clothes, cars (bought used of course) and anything else one can think of. When he applied for a mortgage he was initially denied because he had no credit rating at all. Not bad credit of course, but no credit. He finally got the mortgage with a small local bank that planned to keep and service the mortgage and was used to dealing with people like him.

That Sears credit card I applied for and got at the age of 22 helped me get my first apartment - otherwise I'm not sure I could have moved there. My older sister was the one who talked me into it "just to build a credit rating".