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Credit 101 Thread

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Re: Credit 101 Thread

Postby Kraftster on Mon Oct 06, 2014 3:44 pm

If one has a regular purchase balance and a balance transfer balance on your credit card, how are payments applied to the two separate balances?
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Re: Credit 101 Thread

Postby tifosi77 on Thu Nov 06, 2014 6:35 pm

I think it just becomes 'credit debt' on the new card, right?

Anyway, when I got my PTO payout from my last job I paid down my two credit cards to under 10% utilization. My credit score shot up 20 points, I'm now over 700 on my TransUnion (Credit Karma) rating, and I applied and was approved for a new United mileage rewards card. This also means my name can be added to our mortgage (my credit score was too low when we bought our house), which I'm excited for. My name is on the deed, but it has always bothered me that I was disassociated with the financing. I feel so grown up now.
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Re: Credit 101 Thread

Postby MWB on Thu Nov 06, 2014 6:40 pm

Kraftster wrote:If one has a regular purchase balance and a balance transfer balance on your credit card, how are payments applied to the two separate balances?


I believe the payments are applied to transactions based on the date of the transaction, with oldest being paid off first.
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Re: Credit 101 Thread

Postby mac5155 on Mon Jan 05, 2015 11:59 pm

Balance transfers. Are they worth it? I have a card with about a 4500 balance, 9% interest. Don't use it anymore, just paying it down from our wedding. I also have a discover with a 7000 limit but no balance for a while now. They are offering me 0% balance transfer on it for 18 months. Should I transfer it over since I am paying it off anyway? Looks like it could save me about $600 in interest, as long as I pay it off before the higher APR kicks in
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Re: Credit 101 Thread

Postby dodint on Tue Jan 06, 2015 12:12 am

Yes, it's worth it. Just check to make sure that if you don't happen to pay it on time that the interest doesn't back accumulate from the beginning and for the entire amount. Also check and see what the Balance Transfer fee is and weigh that against the decrease in interest rate.
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Re: Credit 101 Thread

Postby mac5155 on Tue Jan 06, 2015 12:14 am

Transfer fee is a promo rate of 3% as well. I kind of thought it was, as long as it's paid off before the promo APR expires. It's unused credit, not a new line.
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Re: Credit 101 Thread

Postby dodint on Tue Jan 06, 2015 12:26 am

Seems like a slam dunk. Just remember that the transfer fee is a fee, so it's set. It's not an IR that you can minimize the impact of by paying off quicker. It's a $30 upfront cost for each $1000 transferred.
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Re: Credit 101 Thread

Postby columbia on Sat Jan 10, 2015 1:14 pm

I noticed that my credit score went down 6 points after paying off my car.
Because that just makes total sense....
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Re: Credit 101 Thread

Postby tifosi77 on Sat Jan 10, 2015 1:28 pm

Well, you no longer have that line of credit to manage. Derh. :wink:

What's infuriating to me (similar to the I-paid-this-off-and-my-score-went-down silliness) is that my FICO score is being dinged by one late payment in a ten-year credit history. That one late payment was 75 months ago. (Will that fall off after seven years?) The infuriating bit is that the late payment was on my car loan, and I had just set up for the account to autobill.... except I didn't realize the autobill was going to start on the next month's payment. So I missed it because of a brain fart that I immediately made good on as soon as I realized the error. To me, that doesn't seem like something that should still be an albatross on my score 6 years after the fact.

My MileagePlus card has been sweet. Use it for everything, then pay off enough of the monthly balance to maintain about 15% utilization. Was planning on keeping my car until 200k on the odo (currently at 135k), but it's starting to go south on me. So I want to keep my score as high as I can for now in case I suddenly find myself in need of a new car loan.

Speaking of that miles card, my sign up and usage bonus miles were just added to my account, and I now have about 118k miles. I never realized what I was missing out on.
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Re: Credit 101 Thread

Postby columbia on Sat Jan 10, 2015 1:35 pm

tifosi77 wrote:Well, you no longer have that line of credit to manage. Derh. :wink:


I'm wondering if you actually agree with that tortured logic.
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Re: Credit 101 Thread

Postby tifosi77 on Sat Jan 10, 2015 2:01 pm

I mostly agree with you. But on the other hand, your credit rating is a measure of your ability to manage credit, not eliminate it. Basically, lenders want to know if they can reliably get finance charges and interest out of you. So I sorta get it from their perspective, but it's still pretty dumb.
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Re: Credit 101 Thread

Postby ulf on Sat Jan 10, 2015 2:03 pm

My only blemishes were 6 years ago in college.. My parents opened a credit card for me to buy groceries that they would pay off, so I could build credit instead of them giving me cash. Well that works if you don't miss two payments. Ugh
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Re: Credit 101 Thread

Postby columbia on Sat Jan 10, 2015 2:04 pm

Ok, just checking. :)

Maybe I should take out a $5K loan, pay it off in 6 months and watch my credit score go down further. :slug:
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Re: Credit 101 Thread

Postby tifosi77 on Sat Jan 10, 2015 2:06 pm

Well, that's precisely the point. They want three years of interest out of you, not six months.
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Re: Credit 101 Thread

Postby tifosi77 on Sat Jan 10, 2015 2:21 pm

Oh, speaking of credit.......

I went to Experian to order my annual credit report. They have a new thing now like Credit Karma, and signing up for the free trial was the only way I could see to order my reports online. So I did, whereupon I was told that the report would be $1, and that I would get a 7-day free trial of the Experian Direct thing which I could cancel at any time, or else the account would be billed $20 on a rolling monthly subscription. I hate these negative option things, especially as regards banking type stuff, but I just wanted the report. Flash forward a couple days to today........... the $1 charge is on my bank account, but so is a charge of $49.99!! And looking at their website, there is no easy way to cancel the membership; you have to call customer service.
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Re: Credit 101 Thread

Postby Idoit40fans on Sat Jan 10, 2015 2:22 pm

My blemish is that my utilization sky rocketed in the months i was unemployed a year and a half ago...like an idiot, i decided to take advantage of time off work. Also i took a drastic pay cut when i moved back to pittsburgh...easily more than the cost of living change.
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Re: Credit 101 Thread

Postby tifosi77 on Sat Jan 10, 2015 2:42 pm

Well the call with Experian went better than expected. They agreed to refund the $50 and canceled the account on the spot. Jerks.

CS rep said, "The charge was made because you ordered a three-bureau report. Do you remember ordering the three-bureau report?" I said, "I do, but why would I pay $50 for something I can go to another website and get for free?" So she reversed the charge. Considering it was my mistake, I thought that was good of them. But man, they don't make it easy to cancel stuff.
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Re: Credit 101 Thread

Postby PensFanInDC on Wed Jan 21, 2015 11:21 am

So I knew NOTHING about credit when I hit 18 and needless to say it screwed me. Honestly I know very little about it now except that I wish I had taken better care of it when I was younger. I paid off all of my debts in 2006 and haven't taken on anything new since 2001 as far as loans. I checked my credit report with Equifax last night and noticed that my student loan and car loan from 1999 were on the report as paid in full in 2006. Both were very delinquent at one point. Are these negatively affecting my credit even though they were paid off 9 years ago?

I also have a Comcast debt that was sent to a collection agency in 2009 that I paid off in 2011. That is still sitting there as paid in full as well but it shows a negative on my report. I guess since it was only paid off 3 years ago (Dec 2011). Is there any way I can get this negative mark removed since it was paid off?

I applied for an was approved for a secure card through Capital One. I think that's my best option to build credit. Equifax does not give the credit score for free so I don't know what my score is but I know it has to be low. What is my best use of this card? Currently I am going with a $50 limit so I was thinking I could fill up our car twice a month. Would it be best, as far as credit building is concerned, to pay the balance every month, make the minimum payment, or keep the balance at a certain percentage?

Thanks for any help.
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Re: Credit 101 Thread

Postby Troy Loney on Wed Jan 21, 2015 11:26 am

The collection account is till going to show on the report. It's going to show as zero balance, which is better than an outstanding one.

Paid off debt eventually drops off the report after a number of years. A credit report isn't a snapshot of your current credit status, it's a history of your debt repayment.

It would be best to use the card some each month and pay the balance in full every month. that builds up a history of paying debt on time and optimizes the credit utilization.
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Re: Credit 101 Thread

Postby tifosi77 on Wed Jan 21, 2015 11:55 am

Yeah, once I paid off my car loan my oldest credit account became a terrible, high-interest 'rebuild your credit rating' card. I can't really close it, because it will negatively impact my rating, but I can't let it sit dormant. So I use it for monthly billing stuff (Autosport.com, latimes.com, Dropbox, Google, etc) and pay 100% of the balance every cycle so I don't accrue any interest.
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Re: Credit 101 Thread

Postby Letang Is The Truth on Wed Jan 21, 2015 12:59 pm

my mail man sucks. he routinely switches all of our mail around (we have a communal mail box with about 100 people). there is a formal investigation with the post master general ongoing. apparently my doctor sent me to collections because my FSA card was rejected. i never received the notices OR the collections info. i immediately paid it when the collection agency called me. two day after that, i received the bills and notice from the collection agency. i really hope this doesnt show up on my credit report
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Re: Credit 101 Thread

Postby mac5155 on Wed Jan 21, 2015 1:31 pm

I thought they usually give you a 90 day buffer when it goes to collections. But I could be wrong.
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Re: Credit 101 Thread

Postby bhaw on Wed Jan 21, 2015 1:42 pm

Letang Is The Truth wrote:my mail man sucks. he routinely switches all of our mail around (we have a communal mail box with about 100 people). there is a formal investigation with the post master general ongoing. apparently my doctor sent me to collections because my FSA card was rejected. i never received the notices OR the collections info. i immediately paid it when the collection agency called me. two day after that, i received the bills and notice from the collection agency. i really hope this doesnt show up on my credit report


They can remove it if you didn't get notice.
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Re: Credit 101 Thread

Postby columbia on Sat Jan 31, 2015 9:13 am

For someone who once have bad credit, I'm pleased to have finally topped the 800 mark.
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Re: Credit 101 Thread

Postby dodint on Sat Jan 31, 2015 11:12 am

Congrats. :)

I hope to join you in the next few years. I've been working hard on it by time is the only thing that can help me now.
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