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Thread: Understanding Credit?

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    #1

    Help Understanding Credit?

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    Is it possible my husband and I would have a less-than-desirable credit score due to not owning a credit card? We have both taken out loans before (cars, rings, etc.) and paid them off on time.

    The only possible hiccup we might have is a single month late payment on a cell phone bill when his auto-payment stopped working (debit card expired and he hadn't received his new one yet). Other services (internet we weren't even using (ugh), WoW account, and the like) set up on auto-payment at this time were immediately cancelled from non-payment also.
    Could this hurt us that much? Recently we set up with a new phone company and they charged us a couple hundred dollars extra because of some bracket we fell into on our credit check. Is this due to one bad month? Or from simply a lack of credit history? How do we go about getting better credit for the future?
  2. Quis custodiet ipsos custodes?
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    #2
    I would say the first step would be to look at your credit reports and see what is on there. If you've had several accounts closed for non-payment that can really ding your score. But without knowing why you have a certain score, it's hard to say what to do to fix it.

    There is also a possibility that you may have some black marks on your credit report that you don't know about. That happened to me once, I closed a Citibank account and made sure that the account was settled before I did. Something slipped through the cracks though, a $15 service fee for something or other, and Citi never notified me about it. However it showed up on my credit report.
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    #3
    Thanks for the info, I've been trying to do annual credit report, but it asks questions about DH's car loan that I'm not sure HE even knows the answers to, let alone me. I tried searching for online info about credit scores and how it works and how to get a better score, and it seems like they all just say "Pay off debt (done), get a credit card and stay on top of payments"
    DH's attitude towards this is very nonchalant. I'm worried though; I hate not knowing what our report looks like.
    Last edited by Pickles; 06-04-2012 at 05:31 AM.
  4. MilitarySOS Jewel
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    #4
    Since we just applied for a preapproval for a mortgage, I learned some stuff about credit. Basically, our plan was going to pay off all of our CC's except for one and both cars when DH got his bonus from reenlisting. Our advisor said that we shouldn't do that which sounds bizaar. She said to pay down the debt to half it's limit on the CCs (since moving sucked a lot) and keep the car loans. You're younger than me and DH so since y'all don't have any credit cards, you should get one and keep a small balance and use it once or twice a month. That way it shows that you're responsible with it and don't go on a spending spree and builds up your credit.
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    #5
    when you run your credit report it will ask security questions to access it-

    they did ask about our mortgage and a few other things.

    however- if you cannot do his-- do yours. and then pay for your credit score- ( they generally run 9.95 on annualcreditreport.com)


    your loans should help with your credit score, but you need to know what it is.
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    #6
    I use creditkarma.com My friend learned about it in one of her financial planning classes It's free and you can see your credit report and one of the scores. It tells you ways you can improve your credit and really gives you a breakdown of what everything means and how it affects your credit. It's free because they advertise new cards and loans to you that can help your credit or something .. but you never have to buy anything if you don't want to (I never have).

    It sounds to me like you probably don't have bad credit but just limited credit. Opening a credit card would probably help improve it. One thing I know that always gets me is the average length of credit lines.
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    #7
    Open a credit card. Get a small credit limit and keep your balance less than 20%. It's okay to carry a balance on it, as long as it's less than 20% of your credit limit. Make payments more than the minimum every month and do not ever make a late payment.

    If you're good with this card, after a few months, open another card and do the same. It looks good to have lots of credit extended to you that you aren't using-- it means you are responsible and wont abuse your credit. My credit score went from a low 600 to 800 in a year and a half by doing this alone.
    MrsJennyyy is mah wife



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    #8
    Does it matter what kind of credit card I get? I've been thinking of signing up with Macy's sometime when I get some major (by "major" I mean like $1-200 worth) house stuff there and get a discount on that first purchase. I think Navy Federal has also offered us a CC.

    Thank you all for your insight!
  9. MilitarySOS Jewel
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    #9
    Quote Originally Posted by Pickles View Post
    Does it matter what kind of credit card I get? I've been thinking of signing up with Macy's sometime when I get some major (by "major" I mean like $1-200 worth) house stuff there and get a discount on that first purchase. I think Navy Federal has also offered us a CC.

    Thank you all for your insight!
    I don't think so. DH and I each have a Capital One card to our name with small limits and I have a Military Star card with a decent limit that we got so we could use the first days discount on stuff for our house when we first got married.
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    Quote Originally Posted by gunsgirl View Post
    when you run your credit report it will ask security questions to access it-

    they did ask about our mortgage and a few other things.

    however- if you cannot do his-- do yours. and then pay for your credit score- ( they generally run 9.95 on annualcreditreport.com)


    your loans should help with your credit score, but you need to know what it is.
    I did exactly this and when I got the extra report that I paid for it also had tips specific to my situation. Bottom line is you need to understand where you stand and if it's bad, what you need to do to fix it, or if there are errors--www.annualcreditreport.com .
    J.J. Montanaro is a CERTIFIED FINANCIAL PLANNER practicioner with USAA Financial Planning Services one of the USAA family of companies.
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