Ask Lemmy
A Fediverse community for open-ended, thought provoking questions
Please don't post about US Politics. If you need to do this, try !politicaldiscussion
Rules: (interactive)
1) Be nice and; have fun
Doxxing, trolling, sealioning, racism, and toxicity are not welcomed in AskLemmy. Remember what your mother said: if you can't say something nice, don't say anything at all. In addition, the site-wide Lemmy.world terms of service also apply here. Please familiarize yourself with them
2) All posts must end with a '?'
This is sort of like Jeopardy. Please phrase all post titles in the form of a proper question ending with ?
3) No spam
Please do not flood the community with nonsense. Actual suspected spammers will be banned on site. No astroturfing.
4) NSFW is okay, within reason
Just remember to tag posts with either a content warning or a [NSFW] tag. Overtly sexual posts are not allowed, please direct them to either [email protected] or [email protected].
NSFW comments should be restricted to posts tagged [NSFW].
5) This is not a support community.
It is not a place for 'how do I?', type questions.
If you have any questions regarding the site itself or would like to report a community, please direct them to Lemmy.world Support or email [email protected]. For other questions check our partnered communities list, or use the search function.
Reminder: The terms of service apply here too.
Partnered Communities:
Logo design credit goes to: tubbadu
view the rest of the comments
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.
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! 🤣