High credit scores for young adults?

[Evo]

A timely article. http://finance.yahoo.com/banking-budgeting/article/110744/8-slipups-that-wont-hurt-your-credit-score?mod=series-m-article-c

 

[S_Happens]

They were apparently told that the reason they were denied is that they had "too much" credit. The rationale was supposedly that with the number of credit cards they had, and the high limits on them, they could easily slip into massive debt at any time apparently making them a liability. They were told that they should close some of their credit accounts. This seems to go in the face of what you are saying about making sure to increase your credit as much as possible, perhaps there is a nuanced difference though. Thinking about it now it may have had something to do with their credit to income ratio. Her father was the sole income provider and while he made decent money he was only a sheriff (yes I dated the sheriff's daughter) and wasn't exactly making the big bucks.

Assuming the reasons for denial to be correct, this highlights THE main difference in the two discussions going on in this thread. There is a difference between a FICO score and what a credit lender decides to do with that score/report. FICO scores are based on a set of rules that should be easily enough accessible to anyone who wants to know.

Income is certainly used by credit LENDERS in determining whether or not they decide to offer credit, but there is no credit to income ratio used by the agencies that determine FICO scores (or to my knowledge by credit lenders either, although I cannot speak for every single one).

 

[Greg Bernhardt]

A timely article. http://finance.yahoo.com/banking-budgeting/article/110744/8-slipups-that-wont-hurt-your-credit-score?mod=series-m-article-c

Good to know overdrafts don't lower the score. I seem to overdraft a few times a month

 

[Astronuc]

Good to know overdrafts don't lower the score. I seem to overdraft a few times a month

Just as long as you pay the bill for PF.

 

[Greg Bernhardt]

Credit scores must be a sham! My credit score was constant for four months then last month it bumps up 30 points and then this month it bumps down 36 points. I have never missed a payment and all that I changed was I added a new credit card.

 

[Pythagorean]

Credit inquiries can affect your score, canceling credit cards can, looking the wrong way at a lender, etc.

 

[lisab]

Credit inquiries can affect your score, canceling credit cards can, looking the wrong way at a lender, etc.

...the flavor of gum you're chewing...

 

[gravenewworld]

I'm 28 and last time I checked my credit score it was around 720-730. I paid off a brand new car, have 2 credit cards that have been open since my junior year in college that I have always paid on time, and have made on time payments on my student loans. That's about it. Credit scores are a huge scam.

 

[Astronuc]

Timely article - Healing a Wounded Credit Score

http://www.nytimes.com/2011/02/19/your-money/19money.html

 

[dlgoff]

Credit scores must be a sham! My credit score was constant for four months then last month it bumps up 30 points and then this month it bumps down 36 points. I have never missed a payment and all that I changed was I added a new credit card.

Well I'm way over 30 but I've only got one credit card and my score, in '02, was 815. All I did was pay it off in one or two months.

 

[Greg Bernhardt]

ha! I haven't done anything different besides getting another credit card and now my credit score is 732. I don't get it!

 

[S_Happens]

Opening a new line of credit changes your FICO score.

1) You change your credit to debt ratio, hopefully for the better.

2) You now have a line of credit that is brand new, which affects it negatively.

I'll go back and read my previous posts, but I should have posted information on exactly how FICO scores are calculated if it wasn't done before me. If it's not then I'll come back and edit a link in.

Time is a big factor, especially for those of us that are young and/or recovering from poor credit.

Edit- Here is a quick and simple link. http://www.myfico.com/crediteducation/whatsinyourscore.aspx