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Re: omg im screwed- i need budget increase for CC and car payments
« Reply #40 on: May 28, 2007, 12:54:56 AM »
Does income, savings etc affect your creditscore, or is it simply about paying on time or not?

Savings, no. 

Income, yes.

Paying on time for a long time trumps both of the above.  By a lot.

Income is not in any FICO credit score. Lenders may consider the figure in their own specific formulas, like they may consider other assets like savings. But income is not factored into the FICO score, the most popular score.

http://www.myfico.com/CreditEducation/WhatsNotInYourScore.aspx

You can see what is included in a score here: http://www.myfico.com/CreditEducation/WhatsInYourScore.aspx

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Re: omg im screwed- i need budget increase for CC and car payments
« Reply #41 on: May 28, 2007, 04:04:00 AM »
The technique waitlist is describing is called credit card arbitrage, you should be able to find lots of information about it under that. It does hit your credit score, to a small degree, if you do it the correct way, but it is manageable. It is generally better to do it though when you can get multiple high limit credit cards. It involves using multiple 0% interest CC's, nearly maxing them out (don't max them), putting the money into 6% high interest earning bank accounts (do not invest the money in something volatile), making the minimum monthly payments and then paying the balance in full before the 0% offer ends (you need to know exactly when it ends).

BUT, there are major pitfalls to it, so you have to really know what you are doing or you will not only lose all the money you gain or can potentially gain from doing it, but your credit score also takes a pretty major hit.

This is all made possible by people like the OP, its a bit scary to think about it, but the majority of people in this country have no idea how to use CCs.

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Re: omg im screwed- i need budget increase for CC and car payments
« Reply #42 on: May 28, 2007, 04:14:12 AM »
The technique waitlist is describing is called credit card arbitrage, you should be able to find lots of information about it under that. It does hit your credit score, to a small degree, if you do it the correct way, but it is manageable. It is generally better to do it though when you can get multiple high limit credit cards. It involves using multiple 0% interest CC's, nearly maxing them out (don't max them), putting the money into 6% high interest earning bank accounts (do not invest the money in something volatile), making the minimum monthly payments and then paying the balance in full before the 0% offer ends (you need to know exactly when it ends).

BUT, there are major pitfalls to it, so you have to really know what you are doing or you will not only lose all the money you gain or can potentially gain from doing it, but your credit score also takes a pretty major hit.

This is all made possible by people like the OP, its a bit scary to think about it, but the majority of people in this country have no idea how to use CCs.

Their loss is our gain.

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Re: omg im screwed- i need budget increase for CC and car payments
« Reply #43 on: May 28, 2007, 09:04:02 AM »
The technique waitlist is describing is called credit card arbitrage, you should be able to find lots of information about it under that. It does hit your credit score, to a small degree, if you do it the correct way, but it is manageable. It is generally better to do it though when you can get multiple high limit credit cards. It involves using multiple 0% interest CC's, nearly maxing them out (don't max them), putting the money into 6% high interest earning bank accounts (do not invest the money in something volatile), making the minimum monthly payments and then paying the balance in full before the 0% offer ends (you need to know exactly when it ends).

BUT, there are major pitfalls to it, so you have to really know what you are doing or you will not only lose all the money you gain or can potentially gain from doing it, but your credit score also takes a pretty major hit.

This is all made possible by people like the OP, its a bit scary to think about it, but the majority of people in this country have no idea how to use CCs.

We all know way too much about finance here.
quote Stanley J. Watson III
you are doomed in the fated sense, but that's completely irrelevant because that's only from the viewpoint of someone who is not constrained by time. since you are temporal, for all intents and purposes you have the power to change your future

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Re: omg im screwed- i need budget increase for CC and car payments
« Reply #44 on: May 28, 2007, 09:07:55 AM »
That is debatable  :P

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Re: omg im screwed- i need budget increase for CC and car payments
« Reply #45 on: May 28, 2007, 09:09:38 AM »
you're right.  it's not in the FICO.

but it is considered by virtually all lenders.  savings generally aren't.

Seems weird that they'd consider one but not the other really. Since both are money relevant to your ability to pay back etc.

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Re: omg im screwed- i need budget increase for CC and car payments
« Reply #46 on: May 28, 2007, 09:15:46 AM »
That is debatable :P

well it just seems to be a great disparity...either you are a finance idiot and are in debt over your eyeballs, or you are a finance guru who plays balancing games with credit card offers and high interest savings accounts trying to beat the system.

Oh, in regard to the credit score thing, they DO take savings into account when you are applying for a mortgage, well to a degree. only in as far as it applies to the downpayment on the house, really. as far as credit goes they don't care or expect you to have tons of money saved up. they care about your credit history, if you have made payments on time, how much debt you have...they don't care where the money comes from so it doesn't factor into that at all.
quote Stanley J. Watson III
you are doomed in the fated sense, but that's completely irrelevant because that's only from the viewpoint of someone who is not constrained by time. since you are temporal, for all intents and purposes you have the power to change your future

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Re: omg im screwed- i need budget increase for CC and car payments
« Reply #47 on: May 28, 2007, 09:31:47 AM »
That is your credit worthyness, not your score.Also, they do care where the money comes from. I have to give a resounding it depends on what loan programs require, but for the most part, outside of conventional A-paper lending, it does matter where the money comes from. That is why you have to have 2 months bank statements on many loan types so the funds are seasoned. For example, with FHA loans, it has to be your money. There are numerous stipulations on gifting funds with loans.Granted there are the exceptions such as NINAs (No Income No Asset) and also high levels of approval through fannie mae and freddie mac underwriting systems that require no assets to be verified.

I wouldn't be so fast to throw the title of financial guru at someone who is playing a balancing act with credit cards. It is going to ding your score because you are getting inquiries and new lines of credit. Credit score aside, I would think it is a decent idea to avoid the high interest.I really hope whoever is doing this will put off law school until they get all of their credit card debt paid off.

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Re: omg im screwed- i need budget increase for CC and car payments
« Reply #48 on: May 28, 2007, 09:45:32 AM »
That is your credit worthyness, not your score.Also, they do care where the money comes from. I have to give a resounding it depends on what loan programs require, but for the most part, outside of conventional A-paper lending, it does matter where the money comes from. That is why you have to have 2 months bank statements on many loan types so the funds are seasoned. For example, with FHA loans, it has to be your money. There are numerous stipulations on gifting funds with loans.Granted there are the exceptions such as NINAs (No Income No Asset) and also high levels of approval through fannie mae and freddie mac underwriting systems that require no assets to be verified.

I wouldn't be so fast to throw the title of financial guru at someone who is playing a balancing act with credit cards. It is going to ding your score because you are getting inquiries and new lines of credit. Credit score aside, I would think it is a decent idea to avoid the high interest.I really hope whoever is doing this will put off law school until they get all of their credit card debt paid off.

I stand corrected. That's what I get for speaking in general terms. :D But you are right, score is used by the lender to help in their determination, as are other things.

Maybe wanna-be-finance-guru is a better title for those types of people.
quote Stanley J. Watson III
you are doomed in the fated sense, but that's completely irrelevant because that's only from the viewpoint of someone who is not constrained by time. since you are temporal, for all intents and purposes you have the power to change your future

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Re: omg im screwed- i need budget increase for CC and car payments
« Reply #49 on: May 28, 2007, 10:06:38 AM »
It is so scary what is going on in personal finance. When I read this topic, I almost fell out of my chair. I was a loan officer in undergrad, and I saw some pretty bad stuff. It was getting to the point that subprime (B and Less Paper) lenders were allowing me to sell products that I would flat out ignore. I had one client who came to me by referral because I helped his friend and he had over $50,000 in credit card debt. Fortunately he had equity in his current home. We got him out of his house, paid off the debt, and he started over. Probably saved him 10 years of his life and a few ulcers.

Bottom line, stay away from credit cards. There are some situations that flat out can not be avoided, but please remember, no one really cares at this point what you drive and what watch you have. (I saw some other post about a guy talking about his wonderful LSAT logic, but threw in a discussion about his "expensive watch") Who cares!

I had to quit my job and live off my savings to complete my masters on a certain time line. It is a humbling experience, and I really hate telling my g/f that we can go out like we used to, but it has to be done.