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Thread: Credit Scores & Debt in General

  1. #1
    Dept. of Redundancy Dept. Cow Poke's Avatar
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    Credit Scores & Debt in General

    When I was younger, I did a bunch of stupid things with credit. When I found out, for example, that I could buy a complete Sears Craftsman Toolset in a really neat Craftsman metal toolbox, and it would only cost me $12/month on "revolving credit", I was ecstatic! It was a $129 tool collection of "over 300 tools" (each socket, allen wrench, drill bit, screw bit, etc. counted as 'a separate tool' ) and I actually used the tools a LOT.

    All kidding aside, because I paid the minimum payment each month before finally wising up, that $129 toolbox probably ended up costing me close to $1,000. And, since you actually had to WRITE CHECKS back then (or show up at the store's service desk with cash) I managed to miss a few payments here and there.

    On top of this, I experienced a period of very bad health, and doctor bills came in, and I wasn't so good at paying them off. More hits to my "credit report". Before long, I had amassed debt in small amounts here and there - new tires for "only $14 a month", $15 a month to Montgomery Ward, $11 a month for a handgun I really really needed.... and I was in deep financial trouble.

    When I was about 20 or 22 years old, we had one of those "Debt Free" seminars at our Church. I became convicted that my 'bad credit' was, in fact, a 'bad testimony', and I decided to do something about it. Today, my credit score hovers around 835-840, with 850 being considered "the very top".

    Since then, I have enjoyed helping friends and family figure out, and reduce, debt, and improve their credit scores.

    I don't pretend to know all the inner workings of how the scores are compiled, but I do know several factors that make sense whether you care about "the score" or not.

    A) Always pay your debts on time -- missed payments or late payments hurt a lot
    2) "Income to Debt" ratios - it makes sense that a certain percentage of your income would go to housing, food, transportation, etc...
    C) Percentage of "credit limit" you have "tied up" (if you owe $500 on a credit limit of $1,000, that's a whole lot worse than owing $500 on a credit limit of $50,000)
    D) AGE of debt -- if you have "good credit" over the past 20 years, that's better than having "good credit" over the past 12 months

    There are other factors, of course, but it comes down to just good common sense. If you agree to pay $(X) for (Y)item over (Z)term, do it!

    Better yet, pay cash if you can afford it.

    But I like "FREE STUFF". Because of my good credit, and the fact that I keep a certain minimum amount of money in my bank, I get some pretty neat perks on my credit card - like FREE extended warranties on stuff I buy, free AIRMILES (which I use a lot), free insurance on rental cars, free concierge services, free "extra bag" on flights, priority boarding, and all kinds of fun stuff.

    That takes DISCIPLINE -- they (the banks / card issuers) are COUNTING on you missing a payment so they can suddenly raise your interest rate (I don't pay interest because I pay my credit cards off in full each month) or cancel your card, or cancel your perks.

    Anyway, what's your financial journey been like?

    1 Tim 2:5 For there is one God, and one mediator between God and men, the man Christ Jesus.

  2. Amen mossrose amen'd this post.
  3. #2
    tWebber
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    I got in debt once. Fixed it pretty quick. It comes fast if you dont have a job.

  4. Amen mossrose amen'd this post.
  5. #3
    Thanks Old Man... Bill the Cat's Avatar
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    We have been most unfortunate in our journey. Both of us have lost jobs with a single day notice and not had the skills to land a better job before disaster occurred. We have lost a house, but never had a car repossessed.

    When we were first married, I got called into the office and told the company was slashing 50% of our workforce, and that right then was my last day. A few years later, Deanna was working for a company, and it was just her and the boss doing high end staffing. She was making about $40K. Well, the boss called her in and said she was tired of running the business, and she was closing it in 2 days. No severance or anything. 2 years after that, I landed a job with Verizon making about $60 K per year. Well, 9/11 happened and I got called up. Went from making $60K to E-5 pay, which was about 40% of what I made with Verizon. Then 6 years later, I got laid off from a temporary government job after being promised a full time one. Each instance had one of us out of work for 6 months minimum...

    Our debt load right now is still off the charts because of student loans for me and my 2 daughters. We are starting to see light at the end of the tunnel due to a good period of employment and decent salaries, but digging out of holes is not fun. Credit score is pretty bad right now, but improving as I pay my debts down.



    Without a clear-cut definition of sin, morality becomes a mere argument over the best way to train animals --- Manya the Holy Szin --- The Quintara Marathon ---

    I may not be as old as dirt, but me and dirt are starting to have an awful lot in common --- Stephen R. Donaldson ---

  6. Amen mossrose, Cow Poke amen'd this post.
  7. #4
    Oops....... mossrose's Avatar
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    Mr. mossy and I decided when we married that if we didn't have cash in the bank to pay for something, we would wait to make the purchase. We have never, ever, paid interest on a credit card. We have always had one credit card, and pay off the entire amount every month, without fail.

    At one point, we purchased a new vehicle that we had to take a loan for. It was paid off in a year. Other than that, the only debt we ever had was our mortgage, and that was paid off in 2001. It has just become a lifestyle for us to do this, and we taught our kids to do the same thing.

    MelMak does extremely well with this. Our daughter did well until she got married. Her husband had been raised differently and spent money as if he had an unlimited supply. Shortly before they married, he went through personal bankruptcy (as did his father about the same time...apple...fall....tree, etc.). He learned a lot through that. And became much better with money management.

    They were able to build a house, sell it after a couple of years and build another. Then he purchased a business, and against all good advice he used the house for collateral. Thus was around the time Kasha was born. The business lasted a year, and he finally had to close the doors and walk away. It was selling produce to restaurants, and although he is a fabulous salesman, there is something about the restaurant business that makes many of them not pay their suppliers.

    So they had to sell their house and move away, I think mostly because he was ashamed of his failure and needed to find a fresh start. Took my baby away when she was 2! Since then they have paid off the debt from the business, bought a house, he has an amazing job, and they seem to be on track.

    It was incredibly hard to watch them go through that. We loaned them money, which they paid back. We gave them some money as gifts which they tried to pay back, but we wouldn't allow it. They have come a long way. She is more involved in paying bills and keeping track, which is always a good idea, both spouses then know exactly what is going on. So hopefully, they will never be in such a difficult place again.


    Securely anchored to the Rock amid every storm of trial, testing or tribulation.

  8. Amen Cow Poke amen'd this post.
  9. #5
    tWebber robrecht's Avatar
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    I never knowingly had any debt (other than a mortgage), but my wife got acquired some credit card debt a few times and was afraid to tell me. When I found out by accident, she told me she had been planning on selling her deceased mothers engagement ring to secretly off the debt. Instead, we paid it from our 'rainy day' account, which was part of my premarital savings. My wife had a history of debt from before we were married and this was a source of shame for her, which she finds hard to talk about. It can be hard to discuss some financial issues, but it is important to do so in a loving, nonjudgmental atmosphere. Currently our credit score is 820.
    βλέπομεν γὰρ ἄρτι δι᾿ ἐσόπτρου ἐν αἰνίγματι, τότε δὲ πρόσωπον πρὸς πρόσωπον·
    ἄρτι γινώσκω ἐκ μέρους, τότε δὲ ἐπιγνώσομαι καθὼς καὶ ἐπεγνώσθην.

    אָכֵ֕ן אַתָּ֖ה אֵ֣ל מִסְתַּתֵּ֑ר אֱלֹהֵ֥י יִשְׂרָאֵ֖ל מוֹשִֽׁיעַ׃

  10. Amen Cow Poke, mossrose amen'd this post.
  11. #6
    Dept. of Redundancy Dept. Cow Poke's Avatar
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    I have two daughters, 4 years apart. The older one, for reasons we don't understand, adopted "I'll gladly pay you Tuesday for a hamburger today" as her financial model. She is in constant financial crisis. Sometimes, I feel so strongly that I just need to cut financial ties, and let her hit bottom, but she's the one who has my grandkids. When they (grandkids) were younger, I would take groceries and "butt covers" to her house, and make sure the grandkids had basic needs, but... that's so tough.

    The younger one seems to have inherited our financial philosophy. She borrowed money from me twice for school, insisting we "set it up like a real loan with interest", and she faithfully paid both loans in full. She has finished school, obtained her nursing degree, spent 5 years as a Hospice Nurse, and just recently accepted a job (hasn't started yet) at our local hospital as a Labor/Delivery nurse. She's really excited about that. She and her husband manage their finances quite well.

    1 Tim 2:5 For there is one God, and one mediator between God and men, the man Christ Jesus.

  12. #7
    Dept. of Redundancy Dept. Cow Poke's Avatar
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    One of the things I like to do, almost like a hobby, is using OPM to buy what I need.

    I needed a new tractor, and a dealer had one of those "$1,000 off or zero interest for 3 years" things.

    I told the salesman "I want both". He asked "both what?" I said, "I want to buy a tractor, and get $1,000 off AND get zero interest for 3 years". He smiled and said, "we can't do that". I said, "OK", shook his hand, and headed out the door. ("walking away power") He called "Hey, wait.... you're just going to walk away?" I told him "unless you can do both!"

    Next thing I know, I'm sitting at a table with his boss working over a contract with "both". You never know til you ask!

    Disclaimer: I NEVER do this unless I have the money in the bank to pay it in full, because you can't "presume upon God" that your future income will always be there. And the FIRST thing I do when I get home is set them up as a payee in my online banking, and create the "auto pay" payments to pay the contract in full before the due date. I also do not do this just to buy things I want, rather than need.

    1 Tim 2:5 For there is one God, and one mediator between God and men, the man Christ Jesus.

  13. #8
    Oops....... mossrose's Avatar
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    Starting last October, Mr. mossy's wages have been reduced as well as his days cut (he is paid by the day) because of the economy downturn in the petroleum industry.

    I had reason about a month ago to actually add up his gross pay from the beginning of 2016 through the end of July for a government form, and was shocked to learn that his income for this year, averaging the first 7 months and multiplying by 12, is almost 50% less than what he made last year! I had guessed it was 30% less, so was really surprised.

    Even more surprising is the fact that we haven't even noticed. We have our RSPs topped up, a Tax Free Savings Account topped up,(set up by the former Conservative Feds about 10 years ago that allows us to invest up to a certain amount each year without paying tax on the interest), other investments that we haven't touched, and we haven't stopped our charitable donations at all, and have a hefty amount to work with in our bank account. I also still purchase, without guilt, a few things to make cards with.

    We rarely eat out, maybe once a month, if that, and usually save that for a birthday or anniversary. I am careful about grocery shopping, but do buy some brand names because they have proven better in some way.

    Mr. mossy thinks he might retire this year, (of course he's said that for about 3 years now), and I think we will be in ok shape if he does.



    Securely anchored to the Rock amid every storm of trial, testing or tribulation.

  14. #9
    Oops....... mossrose's Avatar
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    Oh, and I am a terrific bargain hunter. Canada has a "scanner code" that retailers here apply. If the customer notices there is a discrepancy between the scanned price of an item and the shelf price, the store is obligated to sell that item not only at the sale price, but discounted a further $10.

    For example, I have had several purchases over the years at Walmart where I have been able to take advantage of this policy. One example was a small frying pan, regular price $22, on sale for $12. The scanner rang it up as $22, I objected, and I got it for $2! I watch my purchases and check every receipt before I leave the store.

    The problem is, most stores don't bother telling customers about the policy. Walmart happens to have it posted at every till, that's how I learned of it. Walmart still won't offer the discount unless the customer asks for it.

    I also will take every advantage I can for seniors discounts and use coupons when I can. We don't have couponing here like the States does, but every little bit helps.


    Securely anchored to the Rock amid every storm of trial, testing or tribulation.

  15. Amen Cow Poke amen'd this post.
  16. #10
    Dept. of Redundancy Dept. Cow Poke's Avatar
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    Quote Originally Posted by mossrose View Post
    Oh, and I am a terrific bargain hunter. Canada has a "scanner code" that retailers here apply. If the customer notices there is a discrepancy between the scanned price of an item and the shelf price, the store is obligated to sell that item not only at the sale price, but discounted a further $10.

    For example, I have had several purchases over the years at Walmart where I have been able to take advantage of this policy. One example was a small frying pan, regular price $22, on sale for $12. The scanner rang it up as $22, I objected, and I got it for $2! I watch my purchases and check every receipt before I leave the store.

    The problem is, most stores don't bother telling customers about the policy. Walmart happens to have it posted at every till, that's how I learned of it. Walmart still won't offer the discount unless the customer asks for it.

    I also will take every advantage I can for seniors discounts and use coupons when I can. We don't have couponing here like the States does, but every little bit helps.
    When I see, at "the till" () a sign that says something like "15% for our valued store credit card customers", I'll ask, "Am I not a 'valued customer' if I don't use your store credit card?" I found out that, some stores, like Kohls, will go ahead and give you that same 15% off for cash or "other than store credit card" if you just ask.

    Again, some things you NEVER KNOW unless you ask.

    1 Tim 2:5 For there is one God, and one mediator between God and men, the man Christ Jesus.

  17. Amen mossrose amen'd this post.

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