Question
Does this boost or give you a good credit score?
I already has two hypotethical credit questions before. heres my third. assume ur super rich and have $20 mill in the bank not net worth in the bank. and ur the type of person that never buys on credit but pays everything off instantly weather debit or check. u buy a $5 mill home. u could pay it off instantly. but u decide to build a credit score. u get a mortage. u do some calculations pay higher than the minimum amount and pay off the entire mortage and interest in less than 12 months. would this boost ur credit score or even give u a perfect rating. im only 14 and trying to understand how the credit score system works. if u read my previous questions i understand u might be irritated by now.
6 months ago - 5 answers
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You will not have a perfect rating. If you are buying things on credit you are not paying it off "instantly". If you mean "paying in full" then yes, that will help your credit tremendously. There are very very very few people with perfect credit. Simply because the number of cards you have can hurt you... too few cards=not enough credit=bad. Too many cards=too much risk=bad. The limits on those cards can hurt you. The number of times you have a creditor pull information when applying for a card can hurt you. Some stuff is beyond your control, like the number of inquiries on your credit.
6 months ago
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That would certainly boost your score - any series of on-time payments contributes to a higher credit score. Still, one account with a short payment history will not give you a "perfect" score - you will still have a relatively low score do to the scant payment history. To get a "perfect" score, you would need multiple accounts (credit cards and loans), paid over a long time (say 10 years). this does not mean your cards have to carry a balance...you can use the card and pay it off monthly to avoid finance charges, you just need to build a long-term history of on-time payments. Again, there are also other factors (such as available credit) that go into your credit score which you question does not address.
by Steve D- 6 months ago
revolving accounts make up a large percentage of your credit score. You need at least one major card with either zero or a low balance to have an excellent score. You good still have a good score without one but you have not shown you can manage credit lines if you don't.
by timothy p- 6 months ago
If you have 20 million net worth all of a sudden, and you have no means of producing more money buying a 5 million dollar house is a stupid idea. Expensive stuff cost money to maintain. First off, if you were to get a mortgage and put some money down, you could not pay it all of a sudden, how the banks are going to make money off you...????? For that to happen you would have to give a large sum down, and leave negligible payments over a period of 15 to 30 years.... and still you would pay lots of interest. Your idea fails to give a good credit score because credit worthiness is based on TIME. YEARS of paying on time, plus how old are your credit cards, installment accounts or personal and mirgage loans. That alone is 30% of your credit. If you pay on time and have a card that is only 2 years old, that is a negative factor affecting it. So, when you get your credit card make sure you can afford what you think of buying. Start saving money, and have the money aside. Use your card responsibly and dont get into unmanageable debt. That money you have saved will get you out of a predicament in case something happens and believe me, it always happens. You need credit for everything, do not listen to the fools that say "oh you dont need credit, I do well with a debit card".... Right now you can start saving, and when you are 18, ask your parents for a authorized line. Learn how to use it now, then practive that later.
by Apollo- 6 months ago
When I was 14 I didn't have no clue about credit or whatsoever.. You idea sounds creative, but the trick is, if a person is late in mortgage even for once, it lowers their credit score and it also kind of ruints your credit because you'd have to wait at least 12 months from getting approved for loans, but if he's paying on time or pays off early, it doesn't improve the credit rating at all... and by the way, if you can afford that house, you'd probably care less about credit.
by Plb_sky- 6 months ago