General

Topic Don't ever miss a minimum credit card payment

Staraang

5-Dec(#1)

I've never missed a credit card payment in my life. I recently got a credit monitoring alert that stated I was delinquent on a payment. That was news to me so I went back and checked. Turned out there was a small balance (~$50) on a credit card that I rarely use anymore that I didn't know about. The charges were for electric car charging because I had forgotten to change the credit card info on the app when I switched over to my current regular cards.

I immediately paid the balance. However my credit score dropped by >100 points. I ended up talking to the bank last week and explaining the error was unintentional and they were fairly sympathetic. Today they let me know they would remove the derogatory mark on my credit report which is great news since we were planning on possibly purchasing a home next year. Had me pretty nervous there for a while though.

Moral of the story is set your credit cards for automatic payments for at least the minimum due. If you have multiple credit cards it's easy for this issue to arise especially if you have some infrequent recurring charge that you forgot about.

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John

8-Dec(#41)

Feeb wrote:

> If you’re that disciplined you probably don’t need credit.

Agreed. But that doesn't mean you shouldn't use it -- for reasons I explained above.

Could I buy everything with cash? Yes. Do I? No. Because, again, I enjoy my credit card convenience and benefits.

> There are few “needs” that require credit. A home will require all of the financing etc- but consumers

> still overwhelmingly finance way more than they should. If you’re living credit

> debt free except for mortgage then you’re a badass imo.

I pay mine off in full every month. So am I living "credit debt free" to you? Or not because I use a credit card even though I don't have to?

John

8-Dec(#42)

Feeb wrote:

> No credit score is not bad credit.

It is if you are trying to get a mortgage. It also is many times if you are trying to rent a place to live.

Porksta

8-Dec(#43)

If you do not have a history of managing credit, I would be wary about being the first to offer you some.

Feeb

8-Dec(#44)

John wrote:

> Feeb wrote:

>> No credit score is not bad credit.

> It is if you are trying to get a mortgage. It also is many times if you are trying

> to rent a place to live.

You do not need credit to buy a home unless you are borrowing. This is exactly what I mean by we’ve been conditioned to think credit is absolutely necessary. It is not. Apartment complexes and land lords (in my experience) will work with you if you come with a few months rent and show them your responsible bill payments. It’s certainly easier if they can just run a credit check- but it’s not mandatory across the board.

Feeb

8-Dec(#45)

Porksta wrote:

> If you do not have a history of managing credit, I would be wary about being the

> first to offer you some.

Most of us have a history of making timely payments- bills etc. you don’t have to have credit to document this.

John

8-Dec(#46)

Feeb wrote:

> You do not need credit to buy a home unless you are borrowing.

Well, no offense, but duh.

I thought we had both kinda agreed with our discussion above that a mortgage would be the one acceptable situation to buy before you had all of the money saved up?

> This is exactly what I mean by we’ve been conditioned to think credit is absolutely necessary.

To buy a house? Yes, I agree, we've been conditioned to think that because it is generally accurate these days. It would be very, very difficult for most people to rent AND save up enough money to buy a house with cash.

> It is not.

Agree to disagree, I guess.

> Apartment complexes and land lords (in my experience) will work with you if

> you come with a few months rent and show them your responsible bill payments. It’s

> certainly easier if they can just run a credit check- but it’s not mandatory across

> the board.

It is mandatory for many, many places to live. Might a landlord "work with you"? Maybe. In some areas. If you are lucky.

Feeb

8-Dec(#47)

Anyway. Point made and illustrated. Everyone teaches you that credit score is a reflection of your financial worthiness. Your bank account is definitely a more true reflection of your paying potential.

John

8-Dec(#48)

I will also add that, as a landlord, every applicant that we have ever "worked with" because they didn't meet the normal criteria -- has been a bad tenant that did not go well.

We now no longer "work with" any applicants. There are plenty others out there. I'm not wasting my time trying to find the needle in a haystack that has no credit because they are trying to live life differently than 99.9% of the population and wants to hand me moneys of their utility bills to try to prove that to me.

benstylus

8-Dec(#49)

Feeb wrote:

> John wrote:

>> Feeb wrote:

> |>> No credit score is not bad credit.

>> It is if you are trying to get a mortgage. It also is many times if you are trying

>> to rent a place to live.

> You do not need credit to buy a home unless you are borrowing. This is exactly what

> I mean by we’ve been conditioned to think credit is absolutely necessary. It is

> not. Apartment complexes and land lords (in my experience) will work with you if

> you come with a few months rent and show them your responsible bill payments. It’s

> certainly easier if they can just run a credit check- but it’s not mandatory across

> the board.

If it is a more desirable apartment complex, thr landlord can be pickier. If you have five applications and one vacancy, how do you decide who to drop and who to take?

Going for someone with great credit is a lot less effort than reviewing months worth of bills with another applicant who is trying to prove they are not going to be a liability.

John

8-Dec(#50)

Feeb wrote:

> Anyway. Point made and illustrated. Everyone teaches you that credit score is a reflection

> of your financial worthiness. Your bank account is definitely a more true reflection

> of your paying potential.

Yeah, it sounds like that sometimes, but often isn't. We've had a few applicants to rent who had no or bad credit but had lots of money in the bank. They usually offer to pay for a year up front. We used to take these many years ago when we were young and dumb also. The 3 times it happened, it went bad.

Turns out that people applying for an apartment with no or bad credit with enough money to pay for a year up front -- are drug dealers.

John

8-Dec(#51)

Oh, also, we had one Crypto Bro who we took because he could show a ton of money in the bank and literally showed me his crypto ownership.

He also paid for a year up front.

He also ended up having to leave early and move back into his parents house. Turns out when things went south, he kept throwing his money into a crypto scam to try to salvage the situation.
It all fell apart within the year.

(This isn't necessarily relevant to our discussion here. Just a Fun Fact about another person with no credit and plenty in the bank who still turned out to not be a good tenant that, in the future, we'd reject right at the start.)

Feeb

8-Dec(#52)

Surely you ask about employment? An honest person would be up front that they deal drugs - great tenant.

HybridCRoW

8-Dec(#53)

Tons of times... I learned hard way about credit cards.
At one point I was so excited to have one that I maxed it out in a short time and ended up not able to keep up on the payments at some point to pay it off.

Speaking of credit scores... I'm not sure how long ago they started doing it, but where I pay my rent online, they're offering the ability to affect your credit score when paying your rent... Anyone else who rents have had this offered??

I think it's a novel idea, but with how I get paid and what I've been trying to do since I started my new job in IT, I don't think I'll be able to keep the "positive" on the credit score for rent payments. This month was actually the first month I was able to pay the rent on time, pay off the SUV, and catch up on all my bills... so I maybe be able to keep the snowball rolling that I started with the SUV and start knocking out my other debts sooner... especially my student loans.

Feeb

* 8-Dec(#54)

I’ve seen experian offers a method to build credit based on paying rent or other bills. Supposedly you can add 24 months back pay for an instant 15 or so points.