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High credit scores for young adults?

  1. Sep 18, 2010 #1
    Is it possible for people under 30 to have excellent credit scores? I just checked mine and it is only in the 65th percentile. With a couple credit cards and loans, I've paid all my bills on time. I think what is hurting me is average credit age. My average loan and credit age is only 5 years. Makes me think I can't reach a high score until I'm in my 30s? Any advice?
     
    Last edited: Sep 18, 2010
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  3. Sep 18, 2010 #2

    Ivan Seeking

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    You get a bump whenever you pay off the balance on a loan or credit card.
    Keep your debt to debt potential ratio low.
    Increase your credit limits whenever possible
    Major purchases paid off, help
    Being a homeowner may be highly significant... not sure how that plays in.

    We use an airmiles card for most of our spending, but we pay it off each month. This shows a lot of activity but no [or a low] balance due. As for the airmiles, obviously you lose if you don't pay it off each month.
     
  4. Sep 18, 2010 #3
    Do you happen to know what credit score everyone starts with?

    That should be easy to try!
    http://www.creditcounselorhut.com [Broken]
     
    Last edited: May 4, 2017
  5. Sep 18, 2010 #4

    Office_Shredder

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    I've heard that paying off your credit card completely each month is not as good for your credit score as if you keep a small balance, but always passed that off as mastercard propoganda
     
  6. Sep 18, 2010 #5

    Ivan Seeking

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    If you have the cash for a purchase, use a card and then pay it off.

    But be sure that you actually pay it off!!! :biggrin:
     
    Last edited: Sep 18, 2010
  7. Sep 18, 2010 #6

    Ivan Seeking

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    I've heard this as well. But at one point, I actually evaluated credit reports as a part of my job. Zero balances were always counted as a plus. It may vary depending on the company.
     
  8. Sep 18, 2010 #7

    Ivan Seeking

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    No. Once upon a time, someone explained it to me, but my first real exposure to the subject came long after my own credit was well established.
     
  9. Sep 18, 2010 #8

    Evo

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    I've read that also, a consistent on time pay history is better than early payoff. Having to check credit to establish credit lines for clients for the past 20+ years, I have to agree that how soon you pay something off is not even reported, AFAIK, I've never seen that on a credit report (the kind of report that you see as a creditor). As soon as you stop paying, nothing is reported anymore.

    I don't know if the amount of debt you carry is considered in a personal credit report, it may be considered for a business as far as something like a Dunn & Bradstreet rating.
     
    Last edited: Sep 18, 2010
  10. Sep 18, 2010 #9

    Ivan Seeking

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    Exactly. It shows as a zero balance with the maximum historic debt. But you are right that an established, consistent payment history, is a big part of the target. I understand that you also get bump when you make payments that exceed the minimum payment.

    You still need to increase the debt capacity. An excellent history with a $100 limit doesn't carry much weight.
     
  11. Sep 18, 2010 #10
    My problem is whenever I use my credit card, I forget about paying it off because first the billing address is my parents home and second I use second bank account for the credit card which is not for the saving/cash flow ins purposes.
     
  12. Sep 18, 2010 #11
    I've been trying to build my credit. I recently got a credit card after having to jump through a bunch of hoops. I couldn't even get a simple gas card when I first started trying to build credit. I don't understand how people just get credit cards sent to them without even asking. Not only did I have to ask, but I had to go to the bank personally, get a secured credit card first and pay it off on time for a year, then I had to call them again after a year and give them all of my information again, have 2 references that don't live with me, fax all of that to them, build a rocket, fly to Mars, cure HIV, cancer, and maple syrup urine disease and then they finally sent me the real credit card.

    Should I just let this credit card sit here on my desk? I heard that just having the credit card for a long time builds credit. Or do I have to actually use it? It's only a 500$ credit limit. Should I call them and tell them to make that higher?

    This whole credit thing is such a game. I heard just checking your credit too much can make your credit go down. And things can appear on your credit report out of no where, like missed payments. I had one on my credit report. These people say I owed them money 4 years ago, never told me I owed them money, and somehow had the authority to put a "no payment" on my credit report. I wish I could do that. Just pick someone I don't like and put like 20 no payments on their credit report, just to mess up their credit, since apparently anybody can do that.
    I wrote a letter to the credit companies disputing it and they took it off.
     
  13. Sep 18, 2010 #12

    Danger

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    Greg, man, I gotta tell you...
    When I saw the title of this thread, I was right on the brink of reporting it as a spam post... until I noticed your name on it. Could you maybe relabel it as something less... uh... spammish?
     
  14. Sep 18, 2010 #13

    Evo

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    Having a credit card does nothing for your credit rating. Not using it and not having a balance does not reflect on your credit report. The way credit reporting happens is that the creditor reports how fast you pay within 30, 60, or 90 days. Paying more than the minimum payment is not reflected, it doesn't matter. Also, paying off before it's due doesn't matter. These are not things that are reported.

    Although this doesn't go into your credit score, someone checking your credit history can be alarmed by frequent or recent checks because this indicates that you have been applying for credit.
     
  15. Sep 18, 2010 #14
    When I bought my house at age 23, my credit score was around 680. It reached a peak a year or two after that, when one of the agencies had me at a 780. It was back down to about a 720 last year (I'm 27 now.)

    This thread reminded me to check my free annual credit reports. Nothing anomalous on any of them, and I've still never been late on a payment in my life. I decided to not pay the 8 dollars to check my actual score, though... not worth it to me.
     
  16. Sep 18, 2010 #15
    This makes it sound like they think that the most credible people are the ones waiting until it's due and then paying the minimum.
    Why would that alarm them? There's a lot of different reasons your credit can be checked. Instead of finding out the truth, they'll just assume that I've been going hog wild on credit cards?
     
  17. Sep 18, 2010 #16

    Evo

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    As long as it's paid before it's due, everyone looks the same on a credit report.

    When you are asking for money, apprearing to be repeatedly looking makes you appear to be a risk. Remember, this only shows numbers, it doesn't go into your life story.
     
  18. Sep 19, 2010 #17
    An old friend of mine told me that he had a excellent credit rating when he was in his twenties. He said that this was supposedly because his father opened a bank account for him when he was born and made regular deposits to it through out his childhood.
     
  19. Sep 19, 2010 #18
    I am 25 and last checked my score was 763
     
  20. Sep 19, 2010 #19

    Pengwuino

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    The first part is not true from every source I've ever read. The fact that a company has extended you a line of credit is all that matters. If a company gives you $5000 worth of credit, that's $5000 worth of credit regardless of whether or not you use it. The only problem is if you just open credit cards left and right, you'll get a hit based on that action. Of course, if you never use a card, a issuer might simply close the account which will hurt your score.
     
  21. Sep 19, 2010 #20
    You start off with no credit score, to answer that question. Once you have established credit the push the info through the 'system' and it pushes out a number. There's no 'starting' point that's set in stone.

    In order to increase your credit score there are many things to consider. You should get a credit report (from all 3 credit companies) these tell you exactly what's up and how to fix it.

    Things that increase credit score:
    Having lots of credit and keeping low balances owing at the end of your statement period. If you have $5000 credit and only $500 available this is going to reflect negatively regardless of if you make your payment. If you have the full amount though or lets say 70% of your credit then it'll look positively. The more credit you have the better.

    The older your credit cards the better too... so make sure you use your credit cards every now and then because if you stop using a card the creditor may just stop reporting to the agencies. Having old accounts though is very good.

    Make sure you don't let any payment go over 30 days late. That's when it gets reported.

    However, if you already have a lot of credit cards don't get more, this may reflect negatively. Always try to increase the limit on your current ones.

    Always go over your crdit report and correct any mistakes, get rid of all derrogatory accoutns and make sure everything is 'current' or 'paid as agreed'.

    As well if you're looking for a new credit card try to do it within a short amoutn of time. Having constant credit checks negatively effects your credit score.
     
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