Bank Fees

[zoraster]

Credit Score is important, but I mean... I don't know how much what you're doing is any better than having a credit card generally. Credit Utilization is important, but so is simply payment history. Credit Utilization tends to fix itself after a while as you get better, higher credit line cards, etc. And payment history is the single-most important thing on your credit score.

[zoraster]

It's probably de minimus compared to the effect on mortgages and rentals, but don't underestimate the value of credit card bonuses. I calculate value of the sign up bonuses alone was roughly $3500 over the past few years for us. These did come with some fees, so maybe like... $3000 in value (for example, the fee on the Chase Sapphire Reserve is $450, but a $300 annual travel statement credit makes it $150. The 100k points is worth at least $1500 but probably closer to $2000). The actual spending benefits of the cards also adds a bit more value than cards that require lower credit.

These cards also tend to have a much higher credit limit (the one on the above Chase Sapphire Reserve was $35k for us), which in turn makes our credit utilization tiny in comparison, which just reinforces a "higher credit score leads to higher credit score" kind of thing.

[eagerSnake]

Have the line of credit for $10,000+ and have a savings account with $0 you don't use for anything. On the 5th of the month move $1,500 from the line of credit to the savings. On the 25th of the month move it back to pay it off. The reason you wait 20 days is because the credit bureaus have algorithms that detect if you're just borrowing one day and paying off the next day. This won't really help your score.

Doing this, the credit bureaus only see "he used $1,500 of $10,000+ off a credit card (15% or less utilization) and paid it off in full 20 days later. He's been doing that for years." They don't know that you are using the same money that you borrowed to pay it off and that you

aren't actually using your credit at all.

It's all a trick. It's a financial sleight of hand if you will.

I mean if you are responsible with your credit card then yeah it's the same effect. It's just less risky this way because you never run the risk of overutilizing (which will adversely affect your score) or not being able to pay back, but you get the same benefit on your scores+reports as using a credit card.

Basically, it's just a failsafe way to increase your score

without the risk of actually buying things on credit

.

And you can change the amount you utilize at will. Say next month I want my utilization to be only 3%, then I can just transfer 300 to the savings and back 20 days later.

pedit: But you lose the benefits you talk about in #76. Unless you find a credit card that has benefits and no cash transfer fee.

[eagerSnake]

&& since it's a secured line, meaning I gave the bank $10,000 up front to set aside in case I do borrow and can't pay back, then there is no way I can fall into debt. If I utilize 100% of the 10,000 and I'm unable to pay back, they will simply close the account and use the $10,000 they set aside for it (which is unavailable to me while the account is open). If I am paid off and I close the account, I get my 10k back. Which would feel like a nice bonus check.

I really, really hate buying things on credit. But I understand the importance of the credit score, so I created this scheme, and it works!

P.s. utilization is weighted at

30%

of your score. And this scheme guarantees 100% perfect utilization and payment history indefintely.

[eagerSnake]

Payment history: 35% of score
Credit card utilization: 30% of score
Length of credit history: 15% of score
New credit: 10% of score
Credit mix: 10% of score

I didn't have any credit cards before I opened this line of credit for this scheme, so I was missing out on the 30% from utilization, and the 10% from credit mix. So even with impeccable history on the rest of the figures, I was limited to 60% of the maximum score.

My score went up over 150 points in two months after starting this and has steadily increased since, without buying 1 thing on credit.

Another thing I did was paid down my student loans to $100, and now I pay interest-only payments. Therefore the account is never closed, and my "length of credit history," average account age, and oldest account age continues to increase, while only paying a few dollars a month on it. If I were to pay the $100 and close the account, I wouldn't reap the benefits of my average account age continuing to increase.

[Accountant]

That you think your credit score is the most important part of your life says a lot about your mindset

[eagerSnake]

That you think your credit score is the most important part of your life says a lot about your mindset

What did I actually say?
You are worse than the media.

[Accountant]

That's important to some people I guess.

As is your bank account number, your social security number, your mother's birthdate.

But I mean your credit score is way up there in that tier.

The point is, it's an extremely important figure.

This post says a lot about your mindset.

[eagerSnake]

It says I want to make sure I'm financially secure. Also, that I don't want my identity stolen, and that I respect my mother. What is wrong with that?

[Accountant]

I didn't say there was anything wrong with that.

I think that the sort of person who thinks that financial security, identity security and their mother's birthdate is very important compared to other numbers lives a certain kind of life and thinks about life a certain way. Hence, you saying this helps me understand you better.

[eagerSnake]

What number should be more important to me?

[Accountant]

When did I say that there should be some other hypothetical number that's more important to you?

[eagerSnake]

What numbers do you think are the most important?

[Not_Mafia]

10 is good, it's why we operate in base ten, 360 is pretty a swell guy too, 1, 2, 3, 4, 5, 6, 8, 9, 10, 12 and 15 all divide in to it

[Accountant]

What numbers do you think are the most important?

The number of people whose life you've made better.
The number of people you love and who love you back.
The number of life goals you'e accomplished thus far.

Off the top of my head, those three things are more important than you... credit rating.

[inte]

Have the line of credit for $10,000+ and have a savings account with $0 you don't use for anything. On the 5th of the month move $1,500 from the line of credit to the savings. On the 25th of the month move it back to pay it off. The reason you wait 20 days is because the credit bureaus have algorithms that detect if you're just borrowing one day and paying off the next day. This won't really help your score.

Doing this, the credit bureaus only see "he used $1,500 of $10,000+ off a credit card (15% or less utilization) and paid it off in full 20 days later. He's been doing that for years." They don't know that you are using the same money that you borrowed to pay it off and that you

aren't actually using your credit at all.

It's all a trick. It's a financial sleight of hand if you will.

I mean if you are responsible with your credit card then yeah it's the same effect. It's just less risky this way because you never run the risk of overutilizing (which will adversely affect your score) or not being able to pay back, but you get the same benefit on your scores+reports as using a credit card.

Basically, it's just a failsafe way to increase your score

without the risk of actually buying things on credit

.

And you can change the amount you utilize at will. Say next month I want my utilization to be only 3%, then I can just transfer 300 to the savings and back 20 days later.

pedit: But you lose the benefits you talk about in #76. Unless you find a credit card that has benefits and no cash transfer fee.

great insight from a guy who didn't know that if you withdraw more than you have, you get fees

[inte]

10 is good, it's why we operate in base ten, 360 is pretty a swell guy too, 1, 2, 3, 4, 5, 6, 8, 9, 10, 12 and 15 all divide in to it

420 is great

[eagerSnake]

Some people on this site I swear

[Not_Mafia]

Top 3 numbers are definitely 10, 360 and 420. In no particular order

[eagerSnake]

What about 850? That's the highest credit score you can have.

[Not_Mafia]

It's 700 here

[eagerSnake]

What country is that?

[Not_Mafia]

The UK

[eagerSnake]

Ah it looks as though it is a very similar credit reporting system to the U.S. just with different score ranges

And something called the electoral roll and gone away information network (GAIN) that we don't have here

[Katsuki]

Could take your money out of the bank and just pay cash for everything.

Paying with cash has numerous benefits with regards to controlling your spending (you can feel your money physically leaving you; you have a rough idea how much you're spending and will most definitely know how much you have left; etc.)