How Are You Coping With the Credit Crunch?
- Thread starter TedShatner10
- Start date
I'm graduated. I already have to student loans and I pay the interest on them. I have two credit cards that I rarely use (one is a Best Buy credit card that has my new Wii on it 
). Both of which get paid off. I try to avoid credit right now. I rent month to month.
). Both of which get paid off. I try to avoid credit right now. I rent month to month.
Your credit used :credit available ratio is probably the most important component to your score. When you cancel a card you reduce your credit available. So you should probably never cancel a card unless there's some kind of security issue.
I repeat: If all my balances are zero when I cancel something, then I have NO credit used. So how can it hurt me? I always pay off in full every month.
I have over 20 years before retiring and was able to sock some money away into my retirement fund back in December for some dollar cost averaging.
My mortgage is a fraction of most people's and within 5 years we'll be paid off. We're looking at replacing one of our cars figuring it's better to get in this year and have a decent car for the duration of the recession than one that will just need more and more expensive work in the middle of it.
Job wise I'm about as safe as anyone can be. High enough up with enough breadth of skill to cover several roles and my name is in the succession plan (so I'm told). I'm also in a Union shop for that added level of insulation with a Centrist (with some Left leaning tendencies) provincial government.
My wife is self-employed but busy enough that the drops she's seen just mean that she doesn't have a waiting list 10 people long every week, but she's still working to capacity. We pay off our credit cards every month (with the exception of the one month recently where I got of my two cards mixed up and paid off the one without the balance...*sigh*), we're pretty quiet stay-at-home, low mileage, non-air traveling types.
My mortgage is a fraction of most people's and within 5 years we'll be paid off. We're looking at replacing one of our cars figuring it's better to get in this year and have a decent car for the duration of the recession than one that will just need more and more expensive work in the middle of it.
Job wise I'm about as safe as anyone can be. High enough up with enough breadth of skill to cover several roles and my name is in the succession plan (so I'm told). I'm also in a Union shop for that added level of insulation with a Centrist (with some Left leaning tendencies) provincial government.
My wife is self-employed but busy enough that the drops she's seen just mean that she doesn't have a waiting list 10 people long every week, but she's still working to capacity. We pay off our credit cards every month (with the exception of the one month recently where I got of my two cards mixed up and paid off the one without the balance...*sigh*), we're pretty quiet stay-at-home, low mileage, non-air traveling types.
And I'll repeat too. You don't want to lose the unused credit. Even when you have zero balance the amount of credit available is still important to getting and keeping a high credit score. It's also important to note that if you use your card at all you'll still have an average balance even though you pay it off each month.
Let's say you've got $200 average balance on one card that has a $1000 limit and you have $0 on a card that has a $500 limit. Your credit-used : credit-available ratio is 200/1500 or 13.3%, nice and low.
Now you decide to cancel the $500 card because you never use it and you don't like the color. Now your credit-used : credit available ratio is now 200:1000 or 20%. Still a good ratio, but you've increased your percentage of credit used by nearly 7% without spending a dime!
The credit bureaus keep a pretty tight lid on just exactly how the FICO scores are calculated, but one thing we do know is canceling cards,even with 0 balances always hurts your score.
Let's see...
I have no mortgage, no car, don't want any credit (rather use a prepaid credit/debit card), and the pound's slide against the dollar means the actual value of what I get from US publishers (e.g. for Star Trek) has increased by about 40-50% in the past year.
I won't be a taking any foreign trips for a while, but otherwise...
I have no mortgage, no car, don't want any credit (rather use a prepaid credit/debit card), and the pound's slide against the dollar means the actual value of what I get from US publishers (e.g. for Star Trek) has increased by about 40-50% in the past year.
I won't be a taking any foreign trips for a while, but otherwise...
Even if, 9-10 months out of the year, all your balances are zero, and you only use a card very infrequently? (I make almost all my purchases with a check/debit card.)
How are those 'knocks'? I would think that paying off a card is always a good thing. And what is considered 'early' and 'over' payment?
Ya' got me, that's what I'm seeing in the "negatives" section of the report. and the flip side is in the positive section I've got "consistently on time with payments, all existing accounts below limits, no excessive or suspicious activity on accounts." I'm going to send off some letters to the credit agencies and see what the hell is up. Cause if I'm going to get knocked for trying to get myself out of debt quicker, I want a damn good reason as to why.
The economy in Oklahoma is strong(er) than other areas thanks to our diversity. Either way, I decided a long time ago to adopt the Dave Ramsey principles to get my life back on track. These are principles I had, but lost due to a bad marriage.
- I am selling my house to get a smaller mortgage that doesn't eat up my paycheck. I intend to finance the new house for a 10 year term.
- I'm working to build a cash emergency fund of at least $1,000.
- No credit cards. None. My last credit card was three years ago and I don't miss it nor do I need it.
- I drive an 11 year old truck (paid for) and am working on a 38 year old car (paid for) for my daily drivers. I do all of my own vehicle maintenance. The car tags are due this month to the whopping tune of $22.50.
- I kept the thermostat turned down (below 65º) this winter because I am working on said house, which is rife with drafts. I also use propane to heat, so I didn't want to burn through it quickly. My electric bill has topped out at $40/month on average.
- I use energy efficient light bulbs in all fixtures and never leave the lights on, hence the low electric bill.
- I shop more frugally for groceries and due to some medical issues have to change my diet anyway, so the medical issues actually forced a needed change anyway.
Yes, even if. Now nobody in the general public knows exactly how the FICO score is calculated so it may not be based on your average balance. But, even if it's not and you have 0:credit available making the ratio always 0% no matter how much credit available you have it's not like that ratio is the only thing they care about. They care about the credit available all by itself too.
Also keep in mind that all your debts play into that. I'm not sure about mortgage, but if you have a car payment, or took advantage of one of those 12 months same-as-cash deal then you have some credit used.
But again, even if you have absolutely no debt what-so-ever they still care about credit available all by itself.
