🚀 go-pugleaf

sarge137 <rbooth9858@yahoo.com> writes:
>Right on!  This is the part that most people don't get.  It doesn't
>matter if you pay your account off every month, and are never late.
>If a significant part of your disposable income runs through your
>credit card(s), it has a very negative effect on your FICO. ...
>
>If you think it doesn't matter, the next time you need a loan for a
>major purchase (and you will, it's only a question of when), ask your
>lender how much lower the rate they're offering you would be if your
>FICO was 10 or 20 points higher.  There's no free lunch.

As I've mentioned, we use our credit cards at every opportunity and pay
them off every month.  We also have a card maxed out on a 1.99%
interest rate offer.  They keep making the same offer (with no balance
transfer fee), so we keep maxing it out.  I'm happy to pay 1.99% on a
big chunk of money which I'd otherwise have taken out of my home equity
line at over 7%.

The total of the maximum balances for all of our cards for the past
year is over $41,000.

We recently bought a new minivan.  We financed it with a $23,000 loan
(or somewhere thereabouts) from the manufacturer.  We got the best rate
they were offering -- 2.9%.

You're right that credit-card balances affect your credit score.  But
I'm not sure they affect it as much as all that.  And if they do, then
there's a simple solution.  If, indeed, you're simply using the credit
cards to get cash back, then plan your "major purchase" several months
in advance and stop using the cards during that time.  Even lowering
your balances for only a few months will significantly lessen the
impact of the prior balances on your score.

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