Is AN 800+ FICO CREDIT SCORE EVEN POSSIBLE?

[Lorraine Hadden]

What are some strategies you have used to improve or rebuild credit?

[Benjamin Finney]

Quote from @Lorraine Hadden:

What are some strategies you have used to improve or rebuild credit?

When I was younger I went from not having a FICO score because I paid for everything cash to an 800+ score in 6 months by having a couple family members and my girlfriend add me as an authorized user to their credit cards which they'd always paid on time and paid off every month. Once I was an authorized user on their cards, I was easily approved for my own cards. At that point I had $130k+ of available credit that always got paid off every month. These two methods seem to be the easiest path to 800+.

[Paul Novak]

Quote from @Benjamin Finney:

Quote from @Lorraine Hadden:

What are some strategies you have used to improve or rebuild credit?

When I was younger I went from not having a FICO score because I paid for everything cash to an 800+ score in 6 months by having a couple family members and my girlfriend add me as an authorized user to their credit cards which they'd always paid on time and paid off every month. Once I was an authorized user on their cards, I was easily approved for my own cards. At that point I had $130k+ of available credit that always got paid off every month. These two methods seem to be the easiest path to 800+.

 If you can get someone to do this I agree this is a great option.  For that reason We put both my sons as authorized users on our cards.  At the time they were 5 and 8.  They have no clue that they have credit cards for our main account but we can already start building up their credit.  My hope is that this will give them a jump start when they turn 18.

[JD Martin]

Quote from @Kyle Luman:

Quote from @James Hamling:

I struggled with debt management until I incorporated this pay bi-weekly "law". It started as a goal, turned into a rule, now it's a law I very happily live. I save untold thousands annually thanks to it. 

 I haven't heard of the bi-weekly credit card payment idea. I see how that would keep your utilization percentage down (and thus help your credit score a small amount), but I don't see how it saves you actual money.  Can you educate me?  Thank you.

 The other trick to that is to pay balances off in full before the end of the month that the statement was reported, irrespective of the due date. Credit companies report balances at the end each month after a statement has closed. So for example your American Express statement closing date is December 10 and your payment due date is January 4. You owe $3000. If you pay that before the end of the month, the reported balance is going to be $0 even if you buy $5k worth of Christmas presents next week, because that float won't count until the next statement closes. Most credit cards give you 21-28 days on your float before the closing date, plus the 3 weeks or so before the due date, so the savvy credit user can actually sometimes float 5-7 weeks of credit with $0 reported depending on due dates and closing dates. I've hit it where I've given myself an almost 8 week interest free loan before and had no utilization reported, which is awesome when you're knee deep in several rehabs. 

[Kyle Luman]

Quote from @JD Martin:

Quote from @Kyle Luman:

Quote from @James Hamling:

I struggled with debt management until I incorporated this pay bi-weekly "law". It started as a goal, turned into a rule, now it's a law I very happily live. I save untold thousands annually thanks to it. 

 I haven't heard of the bi-weekly credit card payment idea. I see how that would keep your utilization percentage down (and thus help your credit score a small amount), but I don't see how it saves you actual money.  Can you educate me?  Thank you.

 The other trick to that is to pay balances off in full before the end of the month that the statement was reported, irrespective of the due date. Credit companies report balances at the end each month after a statement has closed. So for example your American Express statement closing date is December 10 and your payment due date is January 4. You owe $3000. If you pay that before the end of the month, the reported balance is going to be $0 even if you buy $5k worth of Christmas presents next week, because that float won't count until the next statement closes. Most credit cards give you 21-28 days on your float before the closing date, plus the 3 weeks or so before the due date, so the savvy credit user can actually sometimes float 5-7 weeks of credit with $0 reported depending on due dates and closing dates. I've hit it where I've given myself an almost 8 week interest free loan before and had no utilization reported, which is awesome when you're knee deep in several rehabs. 

Got it, thank you.

1. If you carry a balance month to month (only paying the minimum or minimum plus), paying twice monthly can save you some money in interest charges.

2. If you don't carry a balance month to month, you can get interest free loans (money saved) for several weeks.  (But, I don't think the twice monthly payment in this situation does anything.  I've researched the 15/3 rule a bit and it doesn't look like it actually helps you if you are already paying the balance to zero each month.)

[Sean Graham]

Quote from @Jay Hinrichs:

Quote from @JD Martin:

Quote from @Jay Hinrichs:

Quote from @Russell Brazil:

Pay your bills for years.

Use a low % of available credit. This can be juked a little by having very high credit limits. I have about $400,000 in available credit on my credit cards. So it's pretty hard to break 5% utilization.  I request credit limit increases every year on all my cards. 

Russell do you go for those high limits for a rainey day or use those funds to bridge your rehabs for pay cycle then pay them off so your not paying interest ?  Just curious why .. I have not asked for a raise on mine I get pretty big ones out of the gate LOL.

As for Fico when i had a bunch of mortgages that reported to the fico I had a hell of a time getting even above 700.  I think I had 14 of them not including my home.. Now that I have paid them all off and ONLY have my one home mortgage I actually saw my first 800 score when i dropped a big commercial loan I had my banker send me the report. We carry no balances and have no car payments and only one mortgage.. So I guess thats how we finally got there. :)

 That's interesting - my commercial loans don't show up on my credit reports. If I am applying for a mortgage for anything I have to self-report these loans. I do all of my commercial business with my credit union so I wonder if that has anything to do with it. I have several of these mortgages so I suspect it would probably drop my score a little if they were reported just on the credit utilization. 

my loans were back in the day before the GFC and were done by wells fargo and that other big nationwide lender that went out of bizz.. I bought 14 homes in a short period of time for gozone tax bene's those are the same as the benes that people search out for cost seg these days.. except they were much easier you did not need a cost seg report.. And you simply deducted lot value then you got to write off 50% of the balance year one.. and there was no recapture after a sunset period.. this was the gulf opportunities act post katrina.  So those were all on my Fico.. my Bank loans from my commercial banks dont show up IE: development loans  vertical construction loans.. Loans on commercial building and MF. If I had to add all those in I would be a 400 fico :)

Wild!

[Paul Novak]

Quote from @JD Martin:

Quote from @Kyle Luman:

Quote from @James Hamling:

I struggled with debt management until I incorporated this pay bi-weekly "law". It started as a goal, turned into a rule, now it's a law I very happily live. I save untold thousands annually thanks to it. 

 I haven't heard of the bi-weekly credit card payment idea. I see how that would keep your utilization percentage down (and thus help your credit score a small amount), but I don't see how it saves you actual money.  Can you educate me?  Thank you.

 The other trick to that is to pay balances off in full before the end of the month that the statement was reported, irrespective of the due date. Credit companies report balances at the end each month after a statement has closed. So for example your American Express statement closing date is December 10 and your payment due date is January 4. You owe $3000. If you pay that before the end of the month, the reported balance is going to be $0 even if you buy $5k worth of Christmas presents next week, because that float won't count until the next statement closes. Most credit cards give you 21-28 days on your float before the closing date, plus the 3 weeks or so before the due date, so the savvy credit user can actually sometimes float 5-7 weeks of credit with $0 reported depending on due dates and closing dates. I've hit it where I've given myself an almost 8 week interest free loan before and had no utilization reported, which is awesome when you're knee deep in several rehabs. 

 This is really good advice.  I keep my balances really low and pay my credit cards weekly on payday so I don't normally run into this problem but I have seen the rare chance when I am on vacation and have large spend that aligns right at the end of a billing cycle where my reported balance goes up by a few thousand dollars.  When this has happened my score had dipped sometimes by 20-30 points just because of how high my balance went up at reporting time.  By the next cycle my score goes right back but I have seen what you are referencing first hand.

[Mark S.]

@James Hamling Agree! I put almost everything on our cards and pay off a minimum of twice a month, usually more frequently since you don’t know exactly when the info will be pulled by the credit bureaus. I also record every charge in my check registers as a debit so when I do pay the balance it as already been ‘deducted’ from my checking account balance. No surprises about not having enough to cover the balance.

[James Hamling]

Quote from @Kyle Luman:

Quote from @JD Martin:

Quote from @Kyle Luman:

Quote from @James Hamling:

I struggled with debt management until I incorporated this pay bi-weekly "law". It started as a goal, turned into a rule, now it's a law I very happily live. I save untold thousands annually thanks to it. 

 I haven't heard of the bi-weekly credit card payment idea. I see how that would keep your utilization percentage down (and thus help your credit score a small amount), but I don't see how it saves you actual money.  Can you educate me?  Thank you.

 The other trick to that is to pay balances off in full before the end of the month that the statement was reported, irrespective of the due date. Credit companies report balances at the end each month after a statement has closed. So for example your American Express statement closing date is December 10 and your payment due date is January 4. You owe $3000. If you pay that before the end of the month, the reported balance is going to be $0 even if you buy $5k worth of Christmas presents next week, because that float won't count until the next statement closes. Most credit cards give you 21-28 days on your float before the closing date, plus the 3 weeks or so before the due date, so the savvy credit user can actually sometimes float 5-7 weeks of credit with $0 reported depending on due dates and closing dates. I've hit it where I've given myself an almost 8 week interest free loan before and had no utilization reported, which is awesome when you're knee deep in several rehabs. 

Got it, thank you.

1. If you carry a balance month to month (only paying the minimum or minimum plus), paying twice monthly can save you some money in interest charges.

2. If you don't carry a balance month to month, you can get interest free loans (money saved) for several weeks.  (But, I don't think the twice monthly payment in this situation does anything.  I've researched the 15/3 rule a bit and it doesn't look like it actually helps you if you are already paying the balance to zero each month.)

By rewiring your brain to bi-weekly clearing of debt's (paying) it put's a persons mindset in a much better cash-flow management place. That mindset matters arguably more than anything else, because mindset crafts reality. 

Next, via bi-weekly your never going to "miss" a payment. And the calculation windows for when interest is assessed would probably surprise most people, it's generally not what one thinks it is so often waiting to that statement does often incur interest charges. 

There is also algorithm advantageous to bi-weekly vs monthly, so a bit of a credit-hack boost effect to it. 

Reality is most people earn income bi-weekly. And for vast majority of persons delayed debt payments results in accruing debts, because they find they have less left to pay down than hoped. It's a "rigged" system of consumer psychology, the monthly statement payor system. 

Bi-weekly system is changing ones financial perspective, mindset and reality. Seems a small change but it really isn't, it's breaking free of a "system". 

Look, I think of it this simple, I don't know a single established millionaire who does the "standard" consumer debt thing. Not a 1. There is a reason for that, both ways. I often have heard excuses of "oh it's easy for them/you because you have...." when truth is it's these disciplines that got us to where we are, not the other way around.     

You don't live "bad" financial discipline, accrue wealth and THAN gain healthy financial habits from the $, that's nonsensical. You gain wealth as a result of good/healthy financial discipline. 

Proof? Look at how many lotto winners are bankrupt in years following. Look up how many pro athletes who clocked 7 and 8 figure annual incomes, went broke. It's a scary high %. 

[V.G Jason]

Quote from @James Hamling:

 James is correct. Not that anyone asked, but personally I pay all my personal credit cards every Monday. Whatever the current balance shows, it's paid. All business one's are done every Friday.  There's no need to get that intense, but the discipline required keeps checks & balances well structured. 

I don't know anybody that keeps material credit card debt or just pays the monthly statement when due. Standards have to be a bit stricter, not saying higher, but stricter.

Another guideline is every April & October, everything is paid with cash and if cash is not accepted--debit card-- it really makes you look at how you spend. I've done that since 2010.  The debit card became an option since Covid since some places refused cash, before it's always cash. I wouldn't remove auto-pay on your utilities from your credit/debit card if you have them, don't want to miss your electric bill by accident but any daily/casual/somewhat necessary spending is cash. Watch how you spend. you'll treat holiday season after October and your summer activity post April very differently. 

[Rick Albert]

Everyone already gave you solid advice. Here is one piece that is extremely important:

If you have a low credit score, you need to find out why. There may be habits that created this number and you need to work through it as well (not saying anything personal, just generally speaking). 

Talk to lenders, but to be honest who cares if it is over 800.I've had over 800 and over 750, lenders typically provide the same rate as long as it is over 740. Again, you need to confirm. 

[Matthew Paul]

Stop using a debit card , use a credit card and pay it off in full every month . You dont get any credit for using a debit card . If your debit card is compromised you may not get your money back . A credit card , you are only responsible for the first $50 . 

[James Hamling]

Quote from @Paul Novak:

Quote from @Benjamin Finney:

Quote from @Lorraine Hadden:

What are some strategies you have used to improve or rebuild credit?

When I was younger I went from not having a FICO score because I paid for everything cash to an 800+ score in 6 months by having a couple family members and my girlfriend add me as an authorized user to their credit cards which they'd always paid on time and paid off every month. Once I was an authorized user on their cards, I was easily approved for my own cards. At that point I had $130k+ of available credit that always got paid off every month. These two methods seem to be the easiest path to 800+.

 If you can get someone to do this I agree this is a great option.  For that reason We put both my sons as authorized users on our cards.  At the time they were 5 and 8.  They have no clue that they have credit cards for our main account but we can already start building up their credit.  My hope is that this will give them a jump start when they turn 18.

Well look at that Paul, you just taught this old dog a new trick! Thank you. 

[Paul Novak]

Quote from @James Hamling:

Quote from @Kyle Luman:

Quote from @JD Martin:

Quote from @Kyle Luman:

Quote from @James Hamling:

I struggled with debt management until I incorporated this pay bi-weekly "law". It started as a goal, turned into a rule, now it's a law I very happily live. I save untold thousands annually thanks to it. 

 I haven't heard of the bi-weekly credit card payment idea. I see how that would keep your utilization percentage down (and thus help your credit score a small amount), but I don't see how it saves you actual money.  Can you educate me?  Thank you.

 The other trick to that is to pay balances off in full before the end of the month that the statement was reported, irrespective of the due date. Credit companies report balances at the end each month after a statement has closed. So for example your American Express statement closing date is December 10 and your payment due date is January 4. You owe $3000. If you pay that before the end of the month, the reported balance is going to be $0 even if you buy $5k worth of Christmas presents next week, because that float won't count until the next statement closes. Most credit cards give you 21-28 days on your float before the closing date, plus the 3 weeks or so before the due date, so the savvy credit user can actually sometimes float 5-7 weeks of credit with $0 reported depending on due dates and closing dates. I've hit it where I've given myself an almost 8 week interest free loan before and had no utilization reported, which is awesome when you're knee deep in several rehabs. 

Got it, thank you.

1. If you carry a balance month to month (only paying the minimum or minimum plus), paying twice monthly can save you some money in interest charges.

2. If you don't carry a balance month to month, you can get interest free loans (money saved) for several weeks.  (But, I don't think the twice monthly payment in this situation does anything.  I've researched the 15/3 rule a bit and it doesn't look like it actually helps you if you are already paying the balance to zero each month.)

By rewiring your brain to bi-weekly clearing of debt's (paying) it put's a persons mindset in a much better cash-flow management place. That mindset matters arguably more than anything else, because mindset crafts reality. 

Next, via bi-weekly your never going to "miss" a payment. And the calculation windows for when interest is assessed would probably surprise most people, it's generally not what one thinks it is so often waiting to that statement does often incur interest charges. 

There is also algorithm advantageous to bi-weekly vs monthly, so a bit of a credit-hack boost effect to it. 

Reality is most people earn income bi-weekly. And for vast majority of persons delayed debt payments results in accruing debts, because they find they have less left to pay down than hoped. It's a "rigged" system of consumer psychology, the monthly statement payor system. 

Bi-weekly system is changing ones financial perspective, mindset and reality. Seems a small change but it really isn't, it's breaking free of a "system". 

Look, I think of it this simple, I don't know a single established millionaire who does the "standard" consumer debt thing. Not a 1. There is a reason for that, both ways. I often have heard excuses of "oh it's easy for them/you because you have...." when truth is it's these disciplines that got us to where we are, not the other way around.     

You don't live "bad" financial discipline, accrue wealth and THAN gain healthy financial habits from the $, that's nonsensical. You gain wealth as a result of good/healthy financial discipline. 

Proof? Look at how many lotto winners are bankrupt in years following. Look up how many pro athletes who clocked 7 and 8 figure annual incomes, went broke. It's a scary high %. 

 Couldn't agree with you more!