I always assumed credit scores were an integral and historic part of the American financial system.
They were not, they are very recent，most of your parents didn’t have credit scores growing up, and as you can probably tell or at least intuit, it’s mostly just a b******* scheme for those with capital to accrue more capital by invading your privacy.
That seems like a reasonable approach though, unless I’m missing something. If you need “loads of credit cards” then you’re already but living within your means.
I have loads of credit cards with only one or two that ever have a balance on them though…
What’s the point of that?
Uhh they’ve accumulated over the years and I don’t bother closing them. The amount of the credit lines together help keep my credit utilization low.
Store offers 0% on items you need, appliances, bedroom furniture. You’re going to spend thousands and they let you pay that shit over the course of 12 or 24 months. To me it’s a no-brainer. Only downside is I can’t use my Raynour & Flannigan card at Best Buy or Home Depot, so I need their cards too.
I hope this is satire… because that’s not how you are supposed to use credit cards if you want to have a good credit score.
Lol why not? I did the same thing when I bought a washer and dryer and my score is over 750. I had the cash to pay it outright but why spend it when Home Depot will finance it for free?
If your total utilization is greater than 10%, or if you have a high balance carried over multiple months, your score will decrease. It will be a few months after the balance is paid in full and you utilization is reduced to below 10% that your score will recover. Then you are stuck with that card because if you ever close it, you will take another hit.
Opening a credit account is a commitment and shouldn’t be done just to get an interest free period on an appliance. You will be hit with a hard inquiry when you open the card, and will be hit if you ever close the card. An interest free period is not really a great sign-on bonus anyway because if you take them up on that, you will see a temporary hit to your score.
If you spend thousands a year at Home Depot (like a contractor or handyman) then a Home Depot card makes sense. I spend a lot at Costco so the Costco card makes sense, also the Amazon prime card makes sense for me because I shop at Whole Foods a lot.
A credit card should be paid off in full soon after you make the purchase. Get your points / cash back / etc and never allow a balance to hit the statement. The real value of the card is in the points/cash back.
It was a response to someone asking why one would accumulate multiple cards. It’s a reason. I’ve done it. I have 800+ credit score. Guess it worked out. I think the most important factors are paying your shit down fast and maintaining a good ratio of high available credit with low usage. At this point I’m at three or four cards and one or two other lines of credit. In the past, it’s been more of each.
Basically, you don’t get a good score by not using credit.
Nothing wrong with having 3 cards, in fact that seems to be the sweet spot. Closing cards is never good so you don’t want to just go around willy nilly opening up cards.
You are absolutely right in that you have to use it to have a good score, but you have to use it wisely. Maintain a low balance, don’t allow cards to go dormant, keep requesting increases to available credit every 6 months so that your utilization will be minimized, and diversify your portfolio with three cards, and at least one line of credit that you never use, and a revolving account like a car or home once you are ready. Sounds like you figured out their formula, congrats on the 800+.
I was 812 until I bought a house, and that knocked me down to 760. Everything I read indicates that It will take at least 5 years of making extra payments on my house for me to get back to 800+, not that it really matters because the only reason I needed a high score in the first place was to get the house.
I was 800 or so before refi in October '21 (which I am thankful every day for my 2.275%), and it dipped, but I’m back to 820 as of today. I dip from time to time when my wife gets spend happy on a shared card of ours, but for the most part I hang out there.
Unfortunately it’s meaningless now, because even though I want to do a home equity loan to make my house a little bigger, I can’t justify taking out an amount greater than my remaining mortgage, at a rate triple or more my remaining mortgage, for the equivalent of 180 square feet of living space. It’s all useless. But I’ll plod a long and pay my bills and do whatever.
My brother, though, is the kind of guy who goes and finds cards that are offering some incentives for opening, and he gets them, and then just hangs onto them. I don’t think he has 10, but at least five or six at this point, and he also has great 800+ credit. He just likes to work though. I like to not think about things.
If you have a bunch of recently opened cards with like $500-$1000 credit limits, that’s not great, but if you have several high limit cards that you are only using a small percentage of that limit, that is good.