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roseviolet
Angie, what you need to do will certainly vary depending upon your situation. That's why I asked P about her situation and said "if X is true for you, then you should probably do Y". However, if X is not the case for you, Angie, then you may need to do something different. It's definitely a different situation depending upon different people, different cards, different credit histories, and on and on and on. In your situation, it might be best to reduce your potential debt, but I'd still be very very careful about which credit cards you decide to close.


The 600s is a really wide range when it comes to credit scores. Back when I was shopping for a house 2 years ago, this was what I read about scores in that range.
  • 600 to 620 = This is a low score. It's not horrifically bad, but it will hold you back. Basically, it's bad for you, but good for banks. This score is low enough that some banks will turn you down, but others will accept you. And the ones who accept you will know that you're kinda desperate because you've been turned down by others. As a consequence, expect higher rates, higher fees, etc.
  • 620 to 680 = Pretty okay. More banks will accept you, but you still may not qualify for the average rate.
  • 680 - 700 = Pretty normal. You should be offered average rates and terms as long as everything else is okay.
A lot has changed in those 2 years, so this information may not be true anymore. As a rule, you need to focus on having a score of 700 and higher.

I looked up the average national rates for a 30 year fixed mortgage & saw that the rates vary pretty widely for people with scores in the 600s.
  • Score of 620 = 6.871%
  • Score of 660 = 5.895%
  • Score of 700 = 5.504%
Let's put those numbers into a really basic mortgage calculator. Assuming that you're seeking a 30 year fixed rate mortgage for $100,000, here's the monthly mortgage payments.
  • 620 = 6.871% = $656.66
  • 660 = 5.895% = $592.82
  • 700 = 5.504% = $568.04
So the person with the 620 credit score will pay $88.62 more per month to borrow the same amount of money as the person with the 700 score. That's $1063.44 a year!
Divala
Angie, my boyfriend and just went through this last week, applying for mortgages. If you're looking to apply for a mortgage soon, DO NOT CLOSE YOUR CREDIT ACCOUNTS. Even though it probably isn't negative activity to you, seeing as you believe you're doing the responsible adult thing, it does track as negative on your credit report. Like Roseviolet said, it's better to have an open account on the books with no balance or a small balance (around 35% of the limit). Closing your account cuts down your reported amount of available credit, and when mortgage companies figure this, they take the total limits on all your cards and add up the total amount you owe on each. Leaving a card with a low/no balance looks better in your favor. It sounds really obvious, but don't charge anything and keep paying your debt down to keep decreasing your ratio. And think of charging as negative activity if you're going to be applying for a mortgage soon.

As for credit scores, the mid-600s will get you a FHA loan. That's what the giant and I were offered by 2 of the 3 banks we went to. They're fine, but you will have to pay mortgage insurance premium on your loan until a certain amount is paid off (would've been 5 years or so for us on a loan of over $200K). That money is pissed away into nothing, basically. It doesn't work to pay down your principal/interest, it's basically a service fee to the bank. You can get out of this if you have a 20% down payment, but that's hard to come up with if you don't have a house to sell and make a profit from. Luckily, my boyfriend's credit is really good and he's been with his credit union for 16 years, so based almost solely on customer loyalty, we did end up getting a conventional loan. But definitely shop around. There's something like a 2-week window where you can apply for mortgages and the banks can check your credit without it getting dinged for too much activity. But by no means should you apply for any other cards. It can fuck up your score.

Anyway, that's what I've learned about it in the past couple weeks. The 600s will get you a loan, but not the best one. But as far as I care, it's all bullshit. Just because your score is low doesn't mean that you're a loser. Mine isn't as high as I'd like it to be sheerly because I pay with cash pretty much everywhere and I have no major debts. My only cards are for a few stores and my only debt is a car loan that's mostly paid off. Not having a long credit history can be as bad as having actual bad credit. It's a tough game to play.

angie_21
When we got our mortgage my credit score turned out to be irrelevant because I didn't have a job at the time, so I wasn't part of qualitfying for the loan even though we are both on it. I have no idea how or why they would do that, I would have thought it would be in their best interest to check me too, but they didn't. So everything ended up riding on the boyfriend. He pays everything late (we've had our cable cut off twice now just because he "didn't get around to it!") but has never actually carried a balance on a card, and he has a very long and good-ish credit history. I have no idea what my credit score would be, I've had two cards for 3 years now and never carried a balance, but his was in the high 700s and we had the 20% down payment (all through hard work and saving, thank you very much!), so it wasn't that big a deal anyways.

I still got different advice from the bank - when we first went in, I had a $8000 limit on a card for god knows what reason, and the bank lady advised me to reduce it to below $2000 before applying for the mortgage. But I think I just figured out why! Lines of credit affect your credit score and for that reason you wouldn't have wanted to close down any cards or reduce your limit if you were worried about qualifying at all. But assuming my score was high enough already, and I qualified anyways, having less potential monthly debt would affect the amount I would qualify for. She was advising me to get rid of lines of credit if we wanted a bigger house, and needed a bigger loan. At least, this is my attempt to understand why she would advise the opposite of what you were advised.

In the USA, you have a window where you can shop around for mortgages and have as many credit check hits on your account as you want over a few weeks, and it will only count as one check. In Canada I don't think it works that way, but we had a mortgage broker so it only took one credit check and then he found did the shopping around in terms of qualifying at the banks and getting the lowest interest rate. It was annoying going through a middle man, but we did get a good deal on the interest rate.
sunshine0
... You see that big nail to the right of the front door? I can scarcely look at it even now and yet I could not bear to take it out. I should like to think it was there always even after my time. I sometimes hear the next people saying, “There must have been a cage hanging from there.” And it comforts me. I feel he is not quite forgotten. world of warcraft gold

  ... You cannot imagine how wonderfully he sang. It was not like the singing of other canaries. And that isn't just my fancy. Often, from the window I used to see people stop at the gate to listen, or they would lean over the fence by the mock-orange2) for quite a long time — carried away. I suppose it sounds absurd to you — it wouldn't if you had heard him — but it really seemed to me he sang whole songs, with a beginning and an end to them.

  For instance, when I finished the house in the afternoon, and changed my blouse and brought my sewing on the verandah3) here, he used to hop, hop, hop from one perch4) to the other, tap against the bars as if to attract my attention, sip a little water, just as a professional singer might, and then break into a song so exquisite5) that I had to put my needle down to listen to him. I can't describe it; I wish I could. But it was always the same, every afternoon, and I felt that I understood every note of it.

  ... I loved him. How I loved him! Perhaps it does not matter so very much what it is one loves in this world. But love something one must! Of course there was always my little house and the garden, but for some reason they were never enough. Flowers respond wonderfully, but they don't sympathize. Then I loved the evening star. Does that sound ridiculous? I used to go into the backyard, after sunset, and wait for it until it shone above the dark gum tree. I used to whisper, “There you are, my darling.” And just in that first moment it seemed to be shining for me alone. It seemed to understand this... something which is like longing, and yet it is not longing. Or regret — it is more like regret. And yet regret for what? I have much to be thankful for!

  ... But after he came into my life I forgot the evening star; I did not need it any more. But it was strange. When the Chinaman who came to the door with birds to sell held him up in his tiny cage, and instead of fluttering6), fluttering, like the poor little goldfinches7), he gave a faint, small chirp8). I found myself saying, just as I had said to the star over the gum tree, “There your are, my darling.” From that moment he was mine! cheap wow gold

  ... It surprises even me now to remember how he and I shared each other's lives. The moment I came down in the morning and took the cloth off his cage he greeted me with a drowsy9) little note. I knew it meant “Missus10)! Missus!” Then I hung him on the nail outside while I got my three young men their breakfasts, and I never brought him in, to do his cage, until we had the house to ourselves again. Then, when the washing-up was done, it was quite a little entertainment. I spread a newspaper over a corner of the table and when I put the cage on it he used to beat with his wings, despairingly, as if he didn't know what was coming. “You're a regular little actor,” I used to scold him. I scraped, dusted it with fresh sand, filled his seed and water tins, tucked a piece of chickweed11) and half a chili12) between the bars. And I am perfectly certain he understood and appreciated every item of this little performance. You see by nature he was exquisitely neat. There was never a speck13) on his perch. And you'd only to see him enjoy his bath to realise he had a real small passion for cleanliness. His bath was put in last. And themoment it was in he positively leapt into it. First he fluttered one wing, then the other, then he ducked his head and dabbled14) his breast feathers. Drops of water were scattered all over the kitchen, but still he would not get out. I used to say to him, “Now that's quite enough. You're only showing off.” And at last out he hopped and standing on one leg he began to peck himself dry. Finally he gave a shake, a flick15), a twitter16) and he lifted his throat — Oh, I can hardly bear to recall it. I was always cleaning the knives by then. And it almost seemed to me the knives sang too, as I rubbed them bright on the board. (buy wow gold)

  ... Company, you see, that was what he was. Perfect company. If you have lived alone you will realize how precious that is. Of course there were my three young men who came in to supper every evening, and sometimes they stayed in the dining-room afterwards reading the paper. But I could not expect them to be interested in the little things that made my day. Why should they be? I was nothing to them. In fact, I overheard them one evening talking about me on the stairs as “the Scarecrow17)”. No matter. It doesn't matter. Not in the least. I quite understand. They are young. Why should I mind? But I remember feeling so especially thankful that I was not quite alone that evening. I told him, after they had gone. I said, “Do you know what they call Missus?” And he put his head on one side and looked at me with his little bright eye until I could not help laughing. It seemed to amuse him.

  ... Have you kept birds? If you haven't, all this must sound, perhaps, exaggerated. People have the idea that birds are heartless, cold little creatures, not like dogs or cats. My washerwoman used to say every Monday when she wondered why I didn't keep “a nice fox terrier”, “There's no comfort, Miss, in a canary.” Untrue! Dreadfully untrue! I remember one night. I had had a very awful dream — dreams can be terribly cruel — even after I had woken up I could not get over it. So I put on my dressing-gown and came down to the kitchen for a glass of water. It was a winter night and raining hard. I suppose I was half asleep still, but through the kitchen window that hadn't a blind, it seemed to me the dark was staring in, spying. And suddenly I felt it was unbearable that I had no one to whom I could say, “I've had such a dreadful dream,” or — “Hide me from the dark.” I even covered my face for a minute. And then there came a little“Sweet! Sweet!” His cage was on the table, and the cloth had slipped so that a chink18) of light shone through. “Sweet! Sweet!” said the darling little fellow again, softly, as much as to say, “I'm here, Missus. I'm here!” That was so beautifully comforting that I nearly cried. (world of warcraft gold)

  ... And now he's gone. I shall never have another bird, another pet of any kind. How could I? When I found him, lying on his back, with his eye dim and his claws wrung, when I realised that never again should I hear my darling sing, something seemed to die in me. My breast felt hollow, as if it was his cage. I shall get over it. Of course. I must. One can get over anything in time. And people always say I have a cheerful disposition. They are quite right. I thank God I have.

  ... All the same, without being morbid19), or giving way to — to memories and so on, I must confess that there does seem to me something sad in life. It is hard to say what it is. I don't mean the sorrow that we all know, like illness and poverty and death. No, it is something different. It is there, deep down, deep down, part of one, like one's breathing. However hard I work and tire myself I have only to stop to know it is there, waiting. I often wonder if everybody feels the same. One can never know. But isn't it extraordinary that under his sweet, joyful little singing it was just this — sadness? — Ah, what is it? — that I heard.

kari
How are you thrifty gals doing? I've been spending lots of money lately. It's just the season. Birthdays, weddings, trips, etc. I haven't added any debt, but I haven't payed off as much as I would have liked to either. I think we can pay off Mr K's cc this month, or just about. I cashed in some of my flexible benefit funds & we have some tax refund money left. It hurts me to put it all towards debt, but it is the right thing to do. Sigh.....
p_176
hey all -

i had almost forgotten that i had asked the question about cancelling the card. ironically, since then, i'd run up the balance to $700, which i just paid off. i am considering cancelling it anyway, even if it pulls down my credit rate for a bit. i have a mortgage and a car loan as well as the other CC, so i'm not overly worried.

the payment rates roseviolet talked about make sense - i have a rate of 6.375% on my mortgage. and now, my credit is actually better now than it was!

i am deciding what to do with "extra" money. i can take $600 per month and pay my CC off in full in a little less than a year, pay the minimum on the house and car loan. or, i can pay the minimum on the CC, car loan, and put the extra $600 to the mortgage.

i am trying to do a loan modification because my payment is above the 30% of my income. i'm not sure if i will qualify though, since i have a weird ability to like, cut back on groceries or g&e bills, to make ends meet. <sigh> i can't wait to sell my house.
p_176
edit
p_176
did not mean to kill the thread.....
Allison-Shine
I like to eat out and have a drink, but my boyfriend and I are getting sick of these national and local chain places (Buffalo Wild Wings, Fridays, you name it) and the prices they charge. Like you each have an order of wings and a few beers and the bill is over $50, WTF?? Then add $10 for the tip for marginal service. We dedided to watch our football games at home and make our own wings and appetizers and buy a 6-pack of beer or soda, it turns out the be half the cost.

I'm just getting sick of being overcharged for the simplest of things. I like when people get thrifty and stick it to those businesses who gouge people. When the economy gets better I hope everyone along with myself sticks to being thrifty.
kari
Allison - I hear you! Eating out is not cheap, no matter where you go. I don't tend to frequent many chains (or anywhere lately for that matter), but I've seen the commercials for 2 meals for $20 or similar. Even that gets expensive, and particularly when the food isn't very good or interesting. I hate overpaying for food. And drinks. Mr K and I have curbed our behavior in this realm in the last months. It has def made a difference on our finances.

I am still working to pay off debt. Good news is we only have one more card left! And the balance is not too bad. Gotta keep chugging along.....
Allison-Shine
QUOTE(kari @ Sep 18 2009, 07:53 AM) *
Allison - I hear you! Eating out is not cheap, no matter where you go. I don't tend to frequent many chains (or anywhere lately for that matter), but I've seen the commercials for 2 meals for $20 or similar. Even that gets expensive, and particularly when the food isn't very good or interesting. I hate overpaying for food. And drinks. Mr K and I have curbed our behavior in this realm in the last months. It has def made a difference on our finances.

I am still working to pay off debt. Good news is we only have one more card left! And the balance is not too bad. Gotta keep chugging along.....



It all adds up, everytime you accept an invitaion to go out with a freind or a group of freinds to a typical bistro or bar & grille, if you went once or twice a week you could easily spend $100-200 a month. Seems like people (even the best of freinds) do not like to have people over their place or even accept an invitation of a freind to come over. It's all "lets meet up at so-and-so restaurant cause they got this or they got that" and "oh whats the big deal about spending $25 bucks?". You have to respect your freind's money as well as your own and many people can't even do the latter.
buttercups
exactly! and eating out is soo my problem! My bf and I are both grad students living at home to save money, and the only time we can get away from parents and families and everyone is if we go out to eat. But lately neither of us have enough money to do even that and we are trying to save so we cut out going out to eat bc that was one of our most expensive costs. Now we hardly ever have a moments privacy or peace for that matter. Any ideas on how to get away somewhere cheap??
kari
Hmm, that's tough, buttercups. I had a similar experience when my husband and I were dating. We both lived on our own, so it wasn't our only chance to get away, but eating out when dating is just so easy. And fun.

Are there other things you guys like to do together? I know it's not as much fun, but maybe you could each eat @ home and then meet for coffee? Or another activity?

I applied for a PT seasonal job @ the mall. I have thought about doing this other seasons, but figured this year I would give it a go. I want to use any extra $$ for house improvements.
kari
Final credit card balance is under $1000. rolleyes.gif
candycane_girl
buttercups, I don't know what kind of place you live in (ie. small town or big city) but where I live there are a lot of cheap food options. There's a Thai place that gives very generous portions and if you don't buy a drink you can end up with a great dinner for under $10. Shwarma is also very cheap and delicious. Just make sure you have breath mints because it involves lots of onions and garlic.

I'm having issues with eating out too often as well. I ended up buying myself lunch last week at least 3 times which added up to nearly $30. Then yesterday I was hungover so I ordered myself a pizza, which was a bit too much money. I need to buy some bread and start making sandwiches for my lunch!

I finally got my first paycheck. What I'm going to try to do is split it so that 2/3 goes into my checking. Then I'll split the remaining third in half to put it into two different savings accounts. Hopefully by the end of the year my savings account won't look so sad.
angie_21
That's awesome Kari! Congrats. I bet that feels good smile.gif

We've stopped eating out as much since we bought our house. When we were living in our apartment near campus, we usually spent over $150 between the two of us on Friday nights out with my friends, and another $100 eating out at dinner and lunch over the week (clearly this was also really bad for our health). The only reason we've stopped eating out is because we're no longer within stumbling distance of a pub, it has nothing to do with willpower, but it sure has saved us a lot of money (that has gone into other things like the roof and new furniture. *sigh*) I've been packing lunches for the last month and I don't know how much money it's saved us (you can get some pretty cheap lunches on campus if you don't mind how gross they are) but I do feel a lot healthier!

Buttercups, since you are students, why don't you meet for lunch on campus? You can pack your own lunch but feel like you are eating out, and you will still be away from your families. And buying lunch is always cheaper than buying dinner. We also have an awesome burrito place right near our house, it's about $18 for 2 large burritos and 2 drinks, but they are sooooo good, and you don't have to pay for a tip because it's a fast-food /subway type of setup. The atmosphere isn't classy, but the food is good and you can always go out for a walk together after you eat so you don't have to go back home right away.
stargazer
one of my goals this year was to get my financial situation in order. while i'm not where i would like to be (hello major school loans), for the most part, i am doing well. i'm taking advantage of living with my folks to create a savings for myself. i guess start to get my ducks in a row. at the same time, not getting down for myself for my current financial situation or that i'm 34 and just creating a savings for myself. i set a savings for myself in my 20s (i lost most of it with the breakup of a ltr) so i can do it again!
kari
Go stargazer!! Sounds like some great progress! I know - it's hard not to be down on one's self sometimes. I always think I should have more savings.

I am fighting an urge to take a quick weekend trip next month. My sister is going to NYC, just for the weekend. I thought about flying there to meet her. Free lodgings. Flight is $250 though, and I'd spend equal shopping & doing things. I had planned to pay $500 towards my Visa in November. Calling up my willpower.
nickclick
i ALWAYS spend more than expected on trips. "well, i'm only on vacation once this year," or "when am i going to be back in (vacation spot)?" are some example excuses for buying (usually) nonsense.

kari, have you ben to NYC? when's your next chance for some time away? or to see your sister?
kari
Nickclick - I haven't been to NYC since high school! I'll see my sister @ Christmas. I'm still on the fence. My sister really wants me to come & said she & my mother would pay for half of the ticket as a Christmas gift. I don't know though - my sister doesn't have much money and I wouldn't let her do that. I have some money, I just should put it towards debt repay, per the plan. dry.gif
kari
well, I threw caution to the wind & booked the trip. I am really excited! But also trying to get over the nagging feeling of guilt. But when it comes down to it, I figure I'll remember the trip forever, but won't remember the cash I will spend going. I also can pay cash for everything - won't incur debt. Sigh....being financially responsible is such a downer sometimes!
nickclick
yay kari! have so much fun. there's plenty of great, free stuff to do in the city.
candycane_girl
kari, you can also be really, really frugal in the time leading up to the trip! I spent so much money yesterday and today so for the next week it's strictly brown bag lunches. At least it helps me feel a bit more in control of my spending.
kari
Candycane girl, that's my plan too - to be careful w/ money leading up to the trip. I think all in all, the fun will greatly surpass the money and I'll be so happy I went.

I'm brownbagging this week also.
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