My FICO Score

[jazz4cash]

That would make sense. You see by paying off everything you've proven that you don't really need credit, which is actually a huge risk... because if you don't need credit, you have no incentive to avoid a bad credit history. Because you don't even need to borrow. So, what's to keep you from borrowing up a storm and then just flat out stiffing the lenders.



I'm starting to really understand the logic now.

Ha! That is very twisted logic to me. I remember the old joke about having to prove you don’t need the money to get approved for a loan. My payment history should satisfy any lender.

 

[audreyh1]

I only occasionally look at the number because several of my accounts report it.

 

[braumeister]

Score is irrelevant to my life, since I never expect to ask for credit again, but I just looked at it out of curiosity. 837 is certainly very healthy, but has no meaning for me. All my accounts have been frozen for a number of years, and I'm only currently using 1% of my available credit. It has been many decades since I failed to pay the bills on time, and that was only for a couple of months during a move.

 

[LateToFIRE]

The majority of credit card accounts need to report zero balance. But at least one card needs to have a balance or its a pretty big ding for all accounts reporting zero. I didn't make up these rules, I just report them.

You can use a credit card but still have it report zero by scheduling full payment to clear before the card's reporting date. Reporting date isn't necessarily payment due date or account month end. You have to find out when your cards report. You can look on your credit report or call the card provider, if interested. I'm not an advocate for effort to max a score except as a mental exercise. If you go to the effort to set it up by auto-pay, my experience is it will reliably work from then on. I haven't altered my auto-pay schedules in 10 years and my scoring is still working. I have 5 cards total and I've set 3 of them up to be paid off to zero balance a day before their respective reporting dates.

No wonder my score is subpar - I've been making the mistake of paying all my CC's off in full each month for the past 30 years

 

[Montecfo]

Part of what will help credit score is showing that if you have debt that you will pay it. If you have no debt then lenders have no way to know if you would pay any debt. If you have debt, though, you will be helped by making on time payments.

Also having unused lines.

 

[jazz4cash]

I have seen my credit report cite “length of credit history” as hampering my score despite having accounts going back >30 yrs.
EDIT: maybe 30 yrs of payment history is too much?

 

[Fermion]

So...if I want to get a few more credit cards, is it hard to do when retired?

I have been keeping our MAGI lowish for ACA, so if they ask for income it isn't going to look great. I *could* generate more income but I won't do that just for a credit card.

If you have $2 million, you could generate $!00k a year super easy in 10 year treasuries, so is it ok to say your income is $100k if you have that much or do you have to say it is $29k (which is about where I land each year on MAGI)

 

[CardsFan]

So...if I want to get a few more credit cards, is it hard to do when retired?

I have been keeping our MAGI lowish for ACA, so if they ask for income it isn't going to look great. I *could* generate more income but I won't do that just for a credit card.

If you have $2 million, you could generate $!00k a year super easy in 10 year treasuries, so is it ok to say your income is $100k if you have that much or do you have to say it is $29k (which is about where I land each year on MAGI)

I don't think getting CC's are a problem. DW has applied for a couple since ER. They ask your income, but I don't think they have any way to verify it. I just use our AGI, but claiming credit for income inside an IRA seems legit.

Anyway, I think the FICO score counts more for getting cards. A mortgage probably is different.

 

[Aerides]

So...if I want to get a few more credit cards, is it hard to do when retired?

I have been keeping our MAGI lowish for ACA, so if they ask for income it isn't going to look great. I *could* generate more income but I won't do that just for a credit card.

If you have $2 million, you could generate $!00k a year super easy in 10 year treasuries, so is it ok to say your income is $100k if you have that much or do you have to say it is $29k (which is about where I land each year on MAGI)

They ask income. They don't ask "taxable income" or ask for a W2 or a tax form. You can say whatever you like.

 

[Fermion]

Oh ok.

I'll just use 7% x portfolio for income.

And as far as cards go, it looks like the Wells Fargo card with 2% cash back and no fee is currently the best?

 

[PandaBear]

I’ve noticed I couldn’t get my credit score above the high 700’s (780 or 790ish) and while intellectually I know it doesn’t really matter, dh’s was in the 800’s and I couldn’t figure out why mine wasn’t.

Then suddenly a couple of months ago it jumped to 820 or 830. No idea why. Then I made quite a few charges and had too high a credit utilization and it went down about 20 points. We had bought first class airfare to Iceland, paid the balances on a couple of vacations and wham! Of course, I pay it off right away so then so get notified my credit limit has doubled!!! From basically 30K to 60K. It just remains a mystery to me.

 

[Markola]

Just pay your CC at the 2 week interval and on auto pay, there is no rule it can only be paid once per month. Then the utilization will be lower.

OR phone them and ask to have the credit limit raised.



Both will lower your utilization.

Interesting idea. I’ll look into that.

 

[Texas Proud]

One thing you have to remember is that the CC companies want a profitable customer... we are, but not the most profitable...


The most profitable customer looks just like the one who is about to default... which is why the default rate is so high...



You want to keep them on the right side of the cliff...

 

[Badger]

I have no idea what my FICO score is. I have frozen my credit at all 3 agencies for how ever it would protect me and don't know why I would ever need credit. We are debt free with a house, cars, and health insurance all taken care of for the rest of our lives. We are 75 and 76 with expectations of 85 if we are lucky. I am sure there will be a decent inheritance for my wife's 2 grown children. I seriously followed much of the advice on this forum to prepare for a time when we no longer had a paycheck coming in. Why would those of us on this forum who are retired and have saved/planned for this time in our lives need to be concerned about FICO scores.

Cheers!

 

[Fermion]

The main reason to be concerned (two reasons really) is that if for some reason you ever need to rent something, they will pull your credit report. Your insurance rates also depend on your credit report.

 

[Time2]

I have seen my credit report cite “length of credit history” as hampering my score despite having accounts going back >30 yrs.
EDIT: maybe 30 yrs of payment history is too much?

Over 10 years ago, when my daughter went to college we gave her our credit card in case she needed something, later after graduating, she said don't take me off the credit card your record really helps my credit score. I have no concern about her using our card, but she is still on it. Kinda silly now, between her and her husband their income is 4 times what we live on.

 

[Lawrencewendall]

When DS was 12, i put him on my CC for emergencies only. When he applied for a mortgage at 29, they asked him how the heck he had a 17 year credit history. His first house and it was 500k.

 

[Badger]

The main reason to be concerned (two reasons really) is that if for some reason you ever need to rent something, they will pull your credit report. Your insurance rates also depend on your credit report.

Thanks for a couple of very important reasons.
I'm not sure there is anything I would ever need to rent that I just wouldn't buy or hire someone, although there may be others that need to. All my home and car insurances have been with USAA for decades and my small whole life policies are fully paid and the dividends keep them in effect and buy more paid-up insurance.
I am always open to learn more ways to improve my safety nets and appreciate more suggestions.

Cheers!

 

[RonBoyd]

No wonder my score is subpar - I've been making the mistake of paying all my CC's off in full each month for the past 30 years

Perhaps not. We pay off each card (7) in full every month. (Score-847)

I try to use each one at least once a month since I had, in the early days, some being cancelled for none use. A couple have a constant monthly balance in the $20 range and others at $4-5,000. I think the key is to have a high credit line (Ours is over $100,000).

Since the cards have due dates throughout the month, the debt amount is lower than actual amount depending upon when the data is collected. The key is keeping the credit "utilization" low but still show you use/need it. So, keep asking the bank to increase your credit limit until they stop it.

 

[RonBoyd]

I have no idea what my FICO score is. I have frozen my credit at all 3 agencies for how ever it would protect me and don't know why I would ever need credit.

You still have a FICO score. We have been "frozen" for over ten years and still get an update every month.

As far as needing credit it is as they say: "Better to have it and not need it than to need it and not have it."

 

[retire48in2018]

The main reason to be concerned (two reasons really) is that if for some reason you ever need to rent something, they will pull your credit report. Your insurance rates also depend on your credit report.

We know several people that rent without a FICO score. It may be true that some large management companies prefer automation and using credit scores. But it is not difficult to rent without.

Insurance rates from some companies / agents may use credit score as part of their costing algorithm. With no credit score, it is a manual process - and manually decision on risk. We have not had higher insurance rates as a result of no score.

I think a bad score would hurt in both scenarios. But no score forces a different method than plain vanilla, online automated costing using credit scores.

 

[Fermion]

I have heard some big horror stories here in Washington state about deadbeat tenants skipping out on rent for months or years and our leaders letting them stay. If I were a landlord in Washington (I would shoot myself first) I would require a credit score of 800 minimum.

 

[Time2]

As far as needing credit it is as they say: "Better to have it and not need it than to need it and not have it."

At 66 with enough money, I thought I would never need credit again. Then I wanted an Amazon credit card, just for the 5% and I was denied for lack of enough credits cards and no money in their bank. I did ask how much money do you need? Never got an answer, but I appealed their decision and got the card. Then my daughter bid on a HUD Repo house, the got it second go round, the first guy that got, tried to renegotiate the price, so a second bidding situation. Re a mortgage my daughter and her husband qualified, but the house inspection didn't. They ended up going through two appraisals, the second was $40k higher then the first. Then the closing agency was bought by another company and all closing were stopped while the got all records merged. Another delay because they couldn't get an office manager. My daughter gave me a heads up early in the process, so I moved my taxable account from Vanguard to IBKR because of their low margin rates and I got a HELOC on my home. I had no income other than what I withdrew, it was not hard but they wanted all my records from the mutual funds. Finally I borrow on margin to buy the house a little later I reduced the margin percentage by borrowing from the HELOC. They rehabbed and refinanced their home in 9 months and repaid me. This all raised my FICO score 38 points.
Am I done needing credit, probably not, we want to get our son into a home.

I saw what I thought would be a nice home for my son while out on my walk, I thought it might be around $300k, NOPE, $489,953 and they reduced the price $10k a week ago.

 

[bada bing]

I'm typical of many of you around here. Credit reports frozen, own everything I need outright and I probably won't ever participate personally in borrowing again.

But twice in the last ten years I've used my credit to bootstrap a Niece and a Nephew's credit scores for them to qualify for their own mortgages. It entails adding them onto my existing multi-decade card accounts and opening shared/secured loans at the credit union. It takes about 6 months to fully kick in, but the effects are dramatic. Both had scores boosted from lower tier to preferred status on mortgage applications. Just another reason an older established person might still play the credit game.

There are several nonsensical or unethical aspects to FICO scoring, but it is what it is. There was/is a marketplace where you could charge a fee for adding a stranger as an authorized user onto a credit card account with an exceptional history.

Average improvement to credit score by becoming an authorized user
Credit Rankings 30 Days 6 Months
Very Good (750+) 1.5% 2.4%
Good (700+) 3.5% 7.1%
Fair (650+) 9.6% 12.5%
Poor (600+) 9.6% 18.1%

 

[Markola]

Interesting way to help one’s relatives. What could possibly go wrong?