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.
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.
All true points. A pot of our parents grew up terrified of using credit or using it too much for everything and going into debt.
Credit is a tool to use. All the credit score does is show how good you are at using that tool. Can you use it responsibly, without abusing it out going into debt? They can’t score you on how well you use credit if you don’t use it at all.
Slight caveat, while credit is a valuable tool to use, studies have shown that credit cards absolutely increase spending, regardless of if it’s paid off each month.
For this reason I encourage people looking to build credit but afraid of debt to use credit cards only for non-flexible spending. Gas, utilities, subscriptions, etc.
Yep - if it’s an expense I have to pay monthly anyway and might as well use one card for my expenses then pay it off every month and reap the rewards points/cash back.
That’s a good callout, it does give the feeling of freedom. People have to know what credit means, and know how they will pay it.
I am pretty good at keeping a rough running tally in my head of how much I’ve spent, and so I can feel that I’m getting close to my limit. Big purchases too impact that a lot. However, I’ve worked with people who don’t have a system, or don’t have the ability to do that. Not knocking them, but you do need some ability to keep track of how much you’ve spent, either yourself or with a routing on checking your amounts.
I just have mine paying my phone bill each month
Starting with only autopaid non-flexible spending is a good bet, and there are credit cars that will de facto get you an ~3% discount on those categories just for using them.
Remember, all cash rewards / points systems exist to make you spend more money, though. Like the cards, they’re designed to increase your spending. So it’s the same advice – only think hard about it for fixed costs.
Yep. Banks are not in the business of losing money.