Credit Question

[mandypandy818]

My husband and I are debt free. We don't have balances on credit cards and haven't in quite awhile. We recently sold our home (September) and are saving to buy a new home. My question is this, we have great credit scores and we're wondering how we maintain that with not using credit cards or having a mortgage right now? We don't have car payments, etc. We like to pay cash for those types of purchases. We have heard that if we don't use some sort of credit/make payments that the credit score could go down and we're afraid this could hurt us when we're ready to purchase a new home. Any advice from someone with experience would be great. Thanks!

 

[disney1990]

My husband and I are debt free. We don't have balances on credit cards and haven't in quite awhile. We recently sold our home (September) and are saving to buy a new home. My question is this, we have great credit scores and we're wondering how we maintain that with not using credit cards or having a mortgage right now? We don't have car payments, etc. We like to pay cash for those types of purchases. We have heard that if we don't use some sort of credit/make payments that the credit score could go down and we're afraid this could hurt us when we're ready to purchase a new home. Any advice from someone with experience would be great. Thanks!

Charge on your credit cards and pay them off. We have a paid off house and we continue to charge and pay off our credit cards. No new credit in years, but our credit score is great.

 

[Planogirl]

It can hurt you a little not to have a mortgage but only because the scoring model can no longer factor in an active mortgage while it's creating your score. The same is true if you just don't have any debt unfortunately. I would suggest using the credit cards occasionally to make sure that they stay open at the very least.

This is a funny thing about scores. I've talked to a few wealthy people who had lousy credit scores because they paid cash for everything. They couldn't understand why they were penalized for not owing anyone and not having credit cards. You at least do have credit cards.

 

[dfchelbay]

My husband and I are debt free. We don't have balances on credit cards and haven't in quite awhile. We recently sold our home (September) and are saving to buy a new home. My question is this, we have great credit scores and we're wondering how we maintain that with not using credit cards or having a mortgage right now? We don't have car payments, etc. We like to pay cash for those types of purchases. We have heard that if we don't use some sort of credit/make payments that the credit score could go down and we're afraid this could hurt us when we're ready to purchase a new home. Any advice from someone with experience would be great. Thanks!

Use the credit card and pay it off each month.

 

[loreejohnson]

I don't want to sound like a parrot to what everyone else has posted, but from experience you need to have active accounts on your credit to have a high score. The one way to do this and not pay for interest, use at least 2 of your credit cards, then pay the balance off when the statement comes in. This way it shows a balance (something that would not be there if you paid the day you charged) and you don't have to worry about the interest.

The way we have always done it is for my DH and I to each have a card. We have an envelope in each of our dressers that we put the cash into the same day that we put the money on the card. When the bill comes I take all cash to the post office and purchase the money orders.

I have been a mortgage underwriter since 2001 and have look at many credit scores. Yes it is the first deciding factor when rates are being looked at, but they do take your debt-to-income, income, etc into account too.

Hope this helps!

 

[daughtersrus]

I don't want to sound like a parrot to what everyone else has posted, but from experience you need to have active accounts on your credit to have a high score. The one way to do this and not pay for interest, use at least 2 of your credit cards, then pay the balance off when the statement comes in. This way it shows a balance (something that would not be there if you paid the day you charged) and you don't have to worry about the interest.

The way we have always done it is for my DH and I to each have a card. We have an envelope in each of our dressers that we put the cash into the same day that we put the money on the card. When the bill comes I take all cash to the post office and purchase the money orders.

I have been a mortgage underwriter since 2001 and have look at many credit scores. Yes it is the first deciding factor when rates are being looked at, but they do take your debt-to-income, income, etc into account too.

Hope this helps!

Just curious. Why do you buy money orders instead of having a checking account?

 

[Sadie22]

I don't want to sound like a parrot to what everyone else has posted, but from experience you need to have active accounts on your credit to have a high score. The one way to do this and not pay for interest, use at least 2 of your credit cards, then pay the balance off when the statement comes in. This way it shows a balance (something that would not be there if you paid the day you charged) and you don't have to worry about the interest.

The way we have always done it is for my DH and I to each have a card. We have an envelope in each of our dressers that we put the cash into the same day that we put the money on the card. When the bill comes I take all cash to the post office and purchase the money orders.

I have been a mortgage underwriter since 2001 and have look at many credit scores. Yes it is the first deciding factor when rates are being looked at, but they do take your debt-to-income, income, etc into account too.

Hope this helps!

Many people go online and make a payment in the amount of the purchase the same day they make the purchase.