CC minimum payment increase...HOLY COW!

[BuckNaked]

Put 20% down on a house and you will get the mortgage no questions asked. The bank sees 20% down as a very low risk.
1) Had the ability to save 20%
2) If you default the bank will have no problem seeing the house in a fire sale and still getting back it's 80%.

Perhaps where you are, but certainly not in this area. If you don't have a good credit score, down payment or not, you're going to pay a higher rate than someone with good credit. DH and I are approved for an 80/20 mortgage and with our credit scores, we have better rates than a co-worker that put down 20% but had a bad credit score.

 

[BuckNaked]

It is clear that there is a large percentage of our population who can not survive on their income (some even working 2 and 3 jobs).

A large percentage that "can't" make it? I doubt it - more likely a large percentage that isn't willing to make it on what they make because they can't or won't distinguish between "need" and "want".

The credit cards (loan sharks) are the only way for some to survive at all.

Gee, should the credit card companies just give the money away for free?

Bottom line, the rich are getting richer and the poor poorer and the middle class is rapidly losing ground. What to do? Try to pay down that debt and VOTE for those who you feel will really address your economic needs for a living wage (because the "trickle down" therory isn't working).

Thanks, but those in office now are addressing my economic needs by trying to keep my federal tax bill down. I'm not interested in paying even more in taxes just to have it thrown down the toilet by the government.

 

[mickeyfan2]

Perhaps where you are, but certainly not in this area. If you don't have a good credit score, down payment or not, you're going to pay a higher rate than someone with good credit. DH and I are approved for an 80/20 mortgage and with our credit scores, we have better rates than a co-worker that put down 20% but had a bad credit score.

I think I live near you. BTW an 80/20 mortgage does not mean you put down 20%. That means you took out two loans 1 for 80% and the second for 20% so you put down 0% in cash. I am talking about you have the 20% in cash. That is what we did and the bank just gave us the money, no questions asked.

 

[BuckNaked]

BTW an 80/20 mortgage does not mean you put down 20%. That means you took out two loans 1 for 80% and the second for 20% so you put down 0% in cash.

Thanks - seeing as I'm the one that did the paperwork to take out the loan, I know exactly what it is. And it makes my point, i.e., that with no money down at all, we still have a much better rate (due to our excellent credit) than my co-worker that put down 20% in cash. There's no getting around the fact that credit scores make a difference when it comes to getting a home loan.

I am talking about you have the 20% in cash. That is what we did and the bank just gave us the money, no questions asked.

Again, thanks, but I knew what you meant. And I can guarantee you that your credit score was checked by the mortgage company, whether they mentioned it to you or not.

 

[BuckNaked]

And as someone mentioned earlier, credit scores often come into play when renting. We have rental property in another state, and we won't even consider renting to someone with no credit, mediocre credit or a credit history of less than 3 years.

That's not to say that people should go out and get into debt to build a credit history, but this notion that credit scores don't matter or that not having one is no big deal is silly.

 

[dvcgirl]

And as someone mentioned earlier, credit scores often come into play when renting. We have rental property in another state, and we won't even consider renting to someone with no credit, mediocre credit or a credit history of less than 3 years.

That's not to say that people should go out and get into debt to build a credit history, but this notion that credit scores don't matter or that not having one is no big deal is silly.

More than anything, I think it was the way that the previous post was worded.....

"I have worked hard to keep my credit score HIGH. Having great credit has gotten me far in life. Am I living beyond my means? I don't think so. Just because I can't pay my cc off in full every month, I can still manage to send them a good chunk of money ABOVE the minimum."

To me, this statement sounds sort of silly too. And it sounds like keeping a credit score high has gotten this person into CC debt. I know that everyone has a different tolerance for levels of debt. I have no tolerance for it. If I can't pay cash for it, I can't afford it. Are there sometimes things that I want...desire....sure. I'm human like everyone else. And if it's something I really *want* vs. *need*, I'll save up or I'll wait until there's a place in the budget. Many times I find that waiting awhile proves to me that whatever I wanted was a fleeting thought...and I don't want it anymore.

Over on the budget board there are always threads about some store and their 50% sale, 75% sale...on and on. It amazes me that people are waiting on Target to hit the day when the Christmas stuff goes 90% off. It would never enter my mind to watch a store and wait for a sale. I'm not going over there unless there's something I need.

And you're right, back in my 20s when I was single and I rented my first apartment....I'm sure my credit score mattered. I guess it did when I bought my first car and made payments. But I never remember thinking that I need to work hard to keep my credit score high. I think things like...find a job I love, work hard and success will follow. I know people who make nice healthy six figure incomes in debt up to their eyeballs who I'm sure have fabulous credit scores. I could have a worse credit score for all I know .......but I don't care.

 

[BuckNaked]

But I never remember thinking that I need to work hard to keep my credit score high.

The only "hard work" we put into keeping our score is high is making sure that every bill is paid on time and in full, and living below our means.

 

[Aidensmom]

Just thought I would throw this out there - in a personal finance seminar I went to once, we were told that having a balance on your credit cards of 50% or so of the limit oftentimes leaves you with a higher credit score, than if you have several cards with high limits and no balances. The way credit scores are figured is pretty convoluted. Having no balances on your cards can leave you with too much "available credit" and make your score go down, because there is no proof you would be able to make all of your payments for everything on time if you did have to at some point use all of that credit.

Credit scores, as some posters have mentioned, are important for a lot more than just getting good credit. Most insurance companies now look at them, as do many employers. And having no credit does NOT give you a good credit score. My DH had never had a credit card, and his credit history consisted of about 2 items at the age of 35. His credit score was low, when we got married I had to put almost everything in my name because of that. I had him apply for a credit card and actually use it, and his credit score increased. When I got a new car, it was put in both of our names, and that increased the score more. Without actually using credit, when we went to buy a house our mortgage interest rate would have been higher because of his credit score.

 

[vivilasvegas]

And as someone mentioned earlier, credit scores often come into play when renting. We have rental property in another state, and we won't even consider renting to someone with no credit, mediocre credit or a credit history of less than 3 years.

That's not to say that people should go out and get into debt to build a credit history, but this notion that credit scores don't matter or that not having one is no big deal is silly.

I just wanted to agree, but also to say don't freak out if your credit is less than great when looking for an apartment. Mine (as I mentioned before) is on it's way, but my credit isn't spotless yet, but I don't have very much outstanding debt. (actually, if you paid stuff off, why is it still on there? ) I rented years ago, and while they took that into account, they also look at landlord history, and references. I paid a little more in deposit and got a great place. Also, bring paycheck stubs if you can. It helped them to see what I make to know I can pay.

So, there's hope!

 

[PlutoPony]

Just thought I would throw this out there - in a personal finance seminar I went to once, we were told that having a balance on your credit cards of 50% or so of the limit oftentimes leaves you with a higher credit score, than if you have several cards with high limits and no balances.

I've heard this from many people after they've gone to a finance seminar and while I believe that this is being told to people, I'm not convinced that having a CC balance helps credit scores as much as we've been led to believe. Just pulled our credit score this week and it's in the upper upper range of excellent (where it's been for as long as I can remember). We've paid our credit cards bills in full each month for 15+ years, haven't had a car loan in 16 years, and except for a small home equity loan 11 years ago (open for 2 years and not fully used) we've only had our mortgage as debt for the 15+ years. We don't max our credit cards out (and never have), didn't have student loans, and never got into financial trouble coming out of college (both sets of parents grew up in the depression so we both grew up with very conservative financial lessons). So I really wonder just what DOES go into a credit score - anyone out there work with credit scores on a regular basis??

 

[can'twait]

Credit scores DO matter. My MIL has a terrible credit history and when she bought a car last year the financing company jacked her interest rate up considerably. I bought a car around the same time and her interest rate was twice what mine was.

 

[cardaway]

Of course credit scores matter. They wouldn't go through all the trouble if businesses were not paying big bucks to support the process. If there is a problem with it, it is the unchecked power these services have.

It's also best to stay in the black as much as possible so if something bad does happen, you're not already deep in the whole.

 

[disneymom3]

Again, thanks, but I knew what you meant. And I can guarantee you that your credit score was checked by the mortgage company, whether they mentioned it to you or not.

Well, as far as I know it is illegal for the mortgage co to check your credit without your permission. Plus, they almost always charge you for the search as they will not pay any of those fees themselves.

However, it is quite possible to get a mortgage without them checking your credit. If I am remembering correctly, it is called a stated income approval. Yes, they are usually higher risk and you MAY pay a higher fee but not always. A lot is going to depend on your amount down. We did this when we refinanced our house and we have a rate of 4.95%. I have also had many clients do this (I am a Realtor) and they all had quite competitive rates.

If you are looking at very little down, then for sure your credit score will affect you. But it is not true to say mortgages are never approved without a credit check because it does happen.

 

[Lisa L from MI]

I just did bills and checked ones that upcoming as due and none have mine have risen.

Weird thing, got my Circuit City bill in the mail and the min due actually "lowered" from 55 to 38???? That is strange....

 

[BuckNaked]

Well, as far as I know it is illegal for the mortgage co to check your credit without your permission.

Illegal? Highly doubtful, since credit companies routinely check credit scores in order to determine to whom they will offer credit.

Plus, they almost always charge you for the search as they will not pay any of those fees themselves.

Again, incorrect. We've recently consulted a number of mortgage companies and brokers while looking for a mortgage, and everyone of them has checked our credit score without any charge at all to us.

However, it is quite possible to get a mortgage without them checking your credit.

No offense, but I simply don't believe that.

But it is not true to say mortgages are never approved without a credit check because it does happen.

Again, no offense, but I would have to see something other than you saying so to believe that.

 

[OhMari]

Over on the budget board there are always threads about some store and their 50% sale, 75% sale...on and on. It amazes me that people are waiting on Target to hit the day when the Christmas stuff goes 90% off. It would never enter my mind to watch a store and wait for a sale. I'm not going over there unless there's something I need. QUOTE]

Maybe these people work it into their budget to buy items on sale after Christmas, so when next Christmas comes and the average person is paying 20% off on Christmas items, these people are sitting with their 50% and 75% off savings in their pockets and don't have to buy it because they have previously gotten it at great clearance prices.

I love being a backward shopper. Especially now watching winter coats and boots start lowering. Where I live winter coats and boots are so expensive in the Fall it is like buying a 5 year investment. When I find that coat in February for 75% that is when I am willing to make my purchase for next season.

 

[Disney-Kim]

I don't know how this post turned into a credit score debate...but...

I will say that a credit score above 720 gets you prime rates/loans/credit cards/deals....period. and to get that score above 720 you must carry less than 30% balance to limit ratio. (your balances should not exceed 30% of the limit on any credit card or most cards or your scores will go down). Paying your bills on time, only having 1 card, paying off....those are not biggest factors. Its the ratio !!! and having a few different cards also helps.

these are facts.
so in order to get the best credit out there, you have to be responsible and keep your debt down. not paid off but down low. This will bring you into the world of the lowest interest rates, best balance transfer rates, highest limits, etc that credit has to offer. and...let me say that just because you pay off your card or keep a low balance doesn't mean you would pass up a good deal or enjoy having a really high limit. Its a good feeling and gives me a sense of accomplishment.
so how can you say that good credit/scores are not important in todays world.

 

[Tink&SquirtsMom]

Actually, someone only needs "good credit" if they plan on going further into debt. If they save up and pay cash, no one cares what their credit score is. I have a friend who is totally Ramsey-everything and she just bought a house without using a credit score. Apparently, you don't even need a credit score for a house anymore.

That's not really true (that your credit score is only useful for going further into debt). We are using our good credit to refinance our 30 year mortgage into a lower interest fixed 15 year... Thats not exactly using it to go further into debt (we are not pulling any cash out of the equity either). We have well more then 20% down but simply would not be eligible for this particular program (its still a jumbo loan even with 20% down and a very modest house... thats CA for you) without a credit score over 700. Sure you could buy a house without credit but why limit yourself to loan programs that might not be the best for you. With discipline credit can be your friend. Ours is paying for our trip to Hawaii next June (frequent flier and AAvacation rewards) and we don't carry balances. Just charge and pay off. Its usually not that high for rewards but our 2 week WDW/DCL trip and our backyard landscaping gave us a big boost this year... so hello Hawaii!! I get daily balance emails so I just apply payment over the internet once a week before I even get my statement. It also saved our behind when we we put a large deposit down on a outdoor bbq island and fireplace and the owner took off with everyone's money before we got our items. We had done plenty of research (company was licensed, had been in business 5 years, was largest supplier of these items in our area, we got personal recommendations, etc), but if we had paid cash (like 90% of their clients), we would have been out of that money. Instead we filed a dispute with our cc company and had it back in our account (pending investigation) within 24 hours.

 

[Planogirl]

You know, some companies check your credit before they'll hire you too. It's primarily financial institutions I think but it's worth considering too.

 

[cardaway]

I hear commercials looking for people with bad credit wanting to sell them something. I was shocked when it was car insurance, but now it's cars and houses. Based on those commercials I think it's safe to say there are people looking for your business if you have a crappy credit rating.

I guess the question is now... do you want to do business with these bottom feeders and get terrible rates (assuming the trade off is higher interest/insurance rates) OR do you want to gain the benefits of good credit.

I have no doubt there are still benefits to having good credit.