[quote]Eli B wrote:
Regarding credit.
I had heard that you can ask banks to do the kind of credit check they used to do before credit cards took off where they track down your prior landlords, utitlity payments and other kinds of financial records and construct an equivalent credit score.
I can see why they would prefer just to check your credit history but had anyone else heard this?[/quote]
This is called an “alternative trade line”. It is for people with little or no credit who don’t even have a score (or just one credit bureau reporting). You can provide your cell phone, car insurance, utility bills, rent, etc… payment history to demonstrate that you have had bills that you pay. It is not as strong as having a revolving account, installment loan or mortgage, but it is better than nothing at all. It isn’t free either. It costs any where from $100 to $200 per tradeline added depending on the reporting agency used.
Not to beat a dead horse, BUT… I’ve spent a good deal of time and effort figuring out credit score algorithms and the folks with the best scores have consistently had ten plus years of clean credit history (no late payments), low loan to value ratios (less than a 30% balance on their credit cards), pay ABOVE the minimum balance every month (or, as beans recommended, just pay the whole thing off every month), and had more than twenty thousand in available credit, but less than fifty thousand in REVOLVING credit accounts. They keep installment accounts (car loans) to 48 months or less, and mortgages to 15 year terms. Those have been my observations having viewed and analyzed the credit reports of well over two thousand people.
The most common way to FUCK UP your credit is to put it on an automatic payment schedule with your bank and forget about it. If you are a DOLLAR short, it puts a thirty day late on your credit report! Your creditors can (and will) change the minimum payment depending on your balance, available credit, card usage and perhaps because the wind blew the wrong way that morning… CHECK YOUR STATEMENTS. I’ve had client’s lose a mortgage because of a $16 Macy’s payment that got switched to $20… Seriously - Don’t automate. Have the discipline to sit down every month and pay your bills.
The other thing that people do is get divorced and trust their ex-spouse to make payments for accounts that they have signed for. Get that shit COMPLETELY SEPARATED when you get divorced.
That being said, credit is EASY AS SHIT to fix… I’ve taken someone with a 450 score and gotten them to a 650 score in six months. I get people a 30 point jump in less than a week all the time… You won’t get a 700 score quickly, but you can get to 650 with relatively little effort and expense.
