Credit don'ts?

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Originally Posted by nathanledet

I've love listening to advice from Suze Orman..she freakin rocks!

And, sorry Ed, she totally contradicts you...

She says that you do not close credit cards, even if you don't use them because of your credit to debt ratio.

It's a good thing to have a LOT of credit, but very low debt. So, if you have 5 credit cards open, then you have more credit...if you have a zero balance on all of them, then you have a big credit to debt ratio, which is a good thing.

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I was going to say this too, Nate. I talk to my financial advisor at my bank on occasion and I asked him once if I should close all the CC that I am not using (and honestly I have quite a few). And he told me that it is better to leave them open so that your debt to available credit ratio is much better.

I think the two biggest things about increasing your credit score is this, pay your bills on time (whether or not your pay off balances... at least pay it on time) and don't apply for too much stuff (loans, CCs, etc) all at the same time. Anything that you apply for that needs a credit check can put a mark on your credit. Definitely plan ahead, and know what is on your Credit Report!!:)

I think that the distinction between the points being discussed here is that while it is OK for you to leave existing accounts open to maintain your credit ratio, it wouldn't be a good thing to go apply for 10 credit cards over the span of few months in order to improve that ratio.

An investment tip my professor also said was, when you get a new offer for a CC and they give you 6 months or some period without interest. What he does since he has good credit, he can get big credit lines. He will max his credit on the card and buy a CD with it. At the end of the interest period he cashes his CD and pays the card and closes the account. He makes a few hundred here and there.

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Originally Posted by Brimstone111888

An investment tip my professor also said was, when you get a new offer for a CC and they give you 6 months or some period without interest. What he does since he has good credit, he can get big credit lines. He will max his credit on the card and buy a CD with it. At the end of the interest period he cashes his CD and pays the card and closes the account. He makes a few hundred here and there.

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Hmmm. interesting!

Renting an apartment will not build your credit score. Not paying will screw you royaly but paying your rent does nothing to improve your credit.

writing bad checks to pay rent doesnt help either. lol

Writing bad checks to pay anything is just plain bad.

Time is also an important thing in credit. Creditors like to see at least 18 months of positive credit history before they consider the info useful. If you are looking for a car or a house don't have your credit run until you are actually ready to make the purchase. Everytime they run a credit check it lowers your score.

When I was younger someone told me to get a personal loan from a bank, even if I don't need the $, then pay it back after 18 months and this will improve your score. In my case first I started with a secured credit card with my bank(that means I gave them $500 and they gave me $500 credit, then after a year they gave me back my deposit, then they offered me a personal loan($1,800) which I took and paid in full by 18-20 months two years after that I had good enough credit to buy a house. Since then I have purchased 5 apartment buildings and ALWAYS pay on time. Now my credit is rocking.

I work in collections. All I can say is, if something goes into default, pay it off as soon as you can, by any means necessary. Interest and other fees are a killer, and it will only snowball. Even if you have to pay off a delinquent debt with a credit card that is in good standing, it is better than having the bad debt sitting in collections!
And anytime you sign up for new credit, please read and understand the fine print in your promissory note! Ignorance is no excuse later and griping about fees and interest is not fair when it was disclosed to you by the guarantor in the very beginning. Think before taking out credit: is it really something I need or am I just trying to keep up with the Joneses?

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Originally Posted by Entropy

Writing bad checks to pay anything is just plain bad.

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i call those NBA checks!

"cause they bounce"! yep corny! :rolleyes: