Mine is 667. I have never used credit cards, and I don’t have any debt. My partner, whose FICO score is 780, currently has about twice their annual salary in debt.
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A few follow-up questions:
- What’s your home address?
- How long have you lived there?
- What’s the make and model of your first car?
- What’s your social security number?
- What’s your net annual income?
You know what else has been on my mind? My first pet’s name and my best friend from high school’s full name. What were yours? 😁
Mine is 667. I have never used credit cards, and I don’t have any debt. My partner, whose FICO score is 780, currently has about twice their annual salary in debt.
This makes sense. Your credit utilization has a high impact on your score. What they’re looking for is the ratio of Credit used over credit available. Ideally you want to keep it under 30%. In your case you’re dividing by zero so it’s impossible to have a good ratio.
If you’re looking to raise your score, just getting a credit card and not even using it will improve your score by increasing your divisor above zero, but some banks may close the account if it goes unused. If you do use it pay it off ASAP. There is a terrible misconception out there that you need to carry a balance on a card and pay interest to raise your score. THAT’S JUST NOT TRUE. Don’t ever carry a balance. It doesn’t ever help your score and can only hurt it if your ratio gets too high.
Good advice here. Both my credit card apps have me at 850 currently. Between the 2 cards, my limit is about 80k. I put around 500-600 per month on them generally and always pay in full every month. I have not paid 1 cent in interest in probably near 20 years, while taking hundreds in rewards from Discover and BOA. Credit cards are a great financial tool and a huge benefit once you learn the rules to the game…if you maintain discipline.
I request a credit increase every time I get a raise or every 6 months, whichever happens first. Why get credit I dont need? In case I ever do need it, but more important is that debt ratio. That is what gets you good loan rates. Do it before you need it, and you will be set.
I request a credit increase every time I get a raise or every 6 months, whichever happens first. Why get credit I dont need? In case I ever do need it, but more important is that debt ratio. That is what gets you good loan rates. Do it before you need it, and you will be set.
There’s also a feedback loop here – once the credit limit increase hits your report, other creditors see it and are more likely to extend increased limits to you. I went through a few years where AmEx and Discover both seemed intent on being my highest limit card and would preemptively offer CLIs after the other one had.
And to expound on your point re: credit utilization ratios - this is another area where having higher limits than you need helps. Your percentage utilized of available credit has a huge impact on your overall score. Having a higher limit means that if you need to carry a balance due to an emergency spend, it’ll have less impact on your score.
e.g., you have an emergency expense of $700 with a line of credit of $1000. Your utilization is now at 70%. This will have a negative impact on your score pretty quickly.
Take the same $700 spend and apply it to a $5000 line of credit and you’re only at 14% utilization. That’ll still have an impact but much less than anything over ~30% utilization.
Even beyond emergencies, if you use a credit card to pay fixed bills each month and then immediately pay them off, you’ll occasionally have months where the payment credits after your statement date and hits your credit report – same deal there. It looks much better on your report if that balance is a fraction of your available credit than if it takes up a large chunk of it.
I’ve been pleasantly surprised by how much actual good advice has ended up in this whole thread.
Basic personal finance like credit cards and retirement and HSA accounts are so beneficial when you are able to have people explain the basics to you, and the knowledge pays off many times over.
I had a few years of young and dumb followed by struggling through the great recession that pretty well wrecked my credit early on.
I then went through a few years while rebuilding where I really dug into learning how the credit system works and gaming it to my advantage. It was literally a case of getting entertainment out of “number goes up.” I got bored with it once my available lines of credit hit a couple multiples of my annual income, but the end result was having a basically perfect credit score.
It ultimately paid off when it came time to buy a car and get a mortgage. Basically had immediate access to the absolute best rates available and approvals have always gone super smooth.
The flip side of that is my SO who never went through the young and dumb stage and hadn’t needed to rebuild credit, but had a similar “fuck credit” attitude as the OP so they’d never had credit in the first place. The fortunate thing there is we were able to jump start their credit history by adding them as an authorized user on one of my older accounts with a high line of credit – this gave a massive boost to both average account age and available credit and pretty much instantly brought their score up from the 5-600s to low 700s. Add in a few more deliberate things like financing a car instead of paying cash and now they’ve got enough of a credit profile built up that it’ll be okay if anything ever happens to me.
Obviously, that requires a lot of trust, but it’s good info for relationships where one partner has established credit and the other doesn’t.
My SO had untreated bipolar disorder when we met, so her credit was trash from forgetting to pay rent and her car frequently. I got her organized and on a schedule, and once she finally started taking care of herself again and got centered mentally, I spotted her a few hundred for a secured credit card to rebuild her score. She stayed on top of herself for a couple years, and went back to college seriously this time, so she needed a new car as it was over an hour away, so I cosigned for her to get her a decent rate. Now 2 more years later she has somewhere around 8k for a credit limit and a score in the mid 700s last I asked. So 5ish years to rebuild her wrecked credit. Now she’s graduating this semester and already got a job offer for like 25% more than I make! Soon it’s her turn to pay back my investments in her! 🤣
Yep the credit score algorithm would rather see $20,000 debt with a $100,000 limit than $5,000 debt with a $10,000 limit.
First, you should realize that credit scores aren’t based on how much debt you have, It’s based on how reliable people are in paying their debts in similar situations.
Someone with 2x their annual salary in debt does sound a little risky to me, but it also means they have a lot of data in terms of credit management history. A lot of people can get into this situation with student loans, mortgages, or other “good” debt.
Someone who has never used credit cards just doesn’t have a lot of payment history.
If you feel you need a higher credit score, then opening and using a credit card can be a good way to raise that score. Opening and using debt, like a car payment, mortgage, or other monthly payments will show that you understand how credit works.
Just make sure you fully pay off your credit card every month, because that debt can get expensive.
If you never plan on using any sort of loans, then it doesn’t matter what your credit score is, and you shouldn’t care what a banking system rates you as.
OP also didn’t specify which type of debt. Twice your annual salary in CC debt, ehhh not so great. Twice your annual salary in a mortgage + student loans + car loan actually sounds like a pretty typical situation, if not a bit frugal. That’s a person making 100k with a 4yr degree from a public univeristy, living in a 150k house, and driving a usedToyota.
It’s all CC debt on their part.
For myself, I simply dislike the usury present in the debt market for consumers and have decided not to engage with it. The over reliance on a number generated by using a usury system seems entirely slanted against the average person.
I’m thinking about buying a house and am probably just going to save up and buy one outright instead of dealing with this bullshit.
For myself, I simply dislike the usury present in the debt market for consumers and have decided not to engage with it.
You’re engaged with it whether you like it or not.
Credit cards are a reality of the modern economy. There are costs associated with every credit card transaction and, due to the ubiquity of credit cards, those costs are priced in to nearly every single purchase you make. Because most merchants charge the same price regardless of payment type, this effectively means that your cash purchases are subsidizing my purchases made with a rewards credit card that has its balance paid off each month by a couple of percent.
You can choose to opt out, but that doesn’t mean you’re not playing the game either way.
800 no debt I just use my credit card a lot and pay it every month
It’s interesting in that it seems to depend on who I ask.
One of my credit cards says it’s 809 as of right now. Based on Transunion.
But another one says 803, also based on Transunion.
¯\_(ツ)_/¯
Nothing. Because we don’t use them in either country I have lived in.
People who want to get on the leader board should consider that your FICO score is a measure of how much lenders can profit off of you.
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I understand why some people have this opinion, but I don’t feel this is proper advice without a caveat. My brother lived this way for a long time because he had poor financial discipline. It helped him most to just not play the game.
I’ve not payed a cent in interest for 20 years, while I have gotten hundreds of dollars in rewards for paying for things I’ve just had to pay for anyway. The best bet was my BOA Better Balance Card (RIP, you were too good for this world!) It paid $25 cash every quarter if you made more than the minimum payment every month. I put my internet bill on autopay on that card and nothing else. (It was a backup for the handful of places that don’t accept Discover, my preferred card.) By paying that bill I had to pay every month anyway, I got a free $100 per year, and probably had that card maybe 10 years. So if you want to see people fuck banks over, they paid me and I never paid them. They didn’t care because they got the merchant fees. That was too good to last, but Discover still gives good cash rewards and I’ve only ever had stellar customer service with them. Again, hundreds in rewards over the years at no cost to me.
Both cards used to offer free extended warranties too, which I’ve used to fix my bass amp once and I bought TVs and other more expensive things on those cards for the free warranty extension. Discover has dropped that, but my new BOA card has brought it back.
fRozeN
775 Transunion
778 Equifax
I’ve got about 3x my salary in debt, but that includes a home. I keep my credit cards paid off every month and a large chunk of cash in my savings.
