Are You Getting An Apple Card? (1 Viewer)

[Cranston37+]

I've always felt that what I outlined above was reasonably plausible. Having that much unsecured credit available and then maxing it out after buying a house, for example, could easily make it harder for you to cover your mortgage payments, therefore making it much more likely that you could default on your loan.

That is why I said the age/history of the line of credit is important. If the company giving you the mortgage sees that your $20K line of credit is 20 years old and you haven't abused it, that's one thing. If they see your $20k line of credit is 1 year old, they don't necessarily know how you will act, but it's not THAT much different to them.

Remember, the POTENTIAL to get into bad credit is not the same as actually being in bad credit. You ALWAYS have the potential to get into bad credit. You can always get a bunch of credit cards that you will abuse AFTER they give you the mortgage.

Ironically, your credit rating can also get dinged when you payoff/close an account.

Payoff yes, but not close, because that will drop your available credit and therefore affect your credit usage and history, which is very important.

Remember guys at the end of the day, don't have large unsecured loans out, don't file for bankruptcy, don't default on anything, don't use more than 30% of your available credit, don't have liens placed against you - the BIG stuff. All these other things will effect your credit my such a small amount that it just won't have any real world impact on you...

 

[JohnRice]

Exactly. The point isn't what you could do, but what you are likely to do. People who demonstrate financial responsibility are likely to be responsible.

 

[dpippel]

That is why I said the age/history of the line of credit is important. If the company giving you the mortgage sees that your $20K line of credit is 20 years old and you haven't abused it, that's one thing. If they see your $20k line of credit is 1 year old, they don't necessarily know how you will act, but it's not THAT much different to them.

Remember, the POTENTIAL to get into bad credit is not the same as actually being in bad credit. You ALWAYS have the potential to get into bad credit. You can always get a bunch of credit cards that you will abuse AFTER they give you the mortgage.

Aren't you more likely to get approved for high lines of credit BEFORE you've just taken out a $400K loan on a house? Anyway, I'm sure you're right, but as I mentioned there's so much voodoo involved that I'm going to look into it further. I may even talk with MY financial adviser instead of just some random dudes on the internet. No offense.

 

[Cranston37+]

Aren't you more likely to get approved for high lines of credit BEFORE you've just taken out a $400K loan on a house?

Think about it this way - if a credit card company only gave out lines of credit to people who didn't have some form of monthly housing payment, how would they stay in business?

-Random dude on internet

 

[dpippel]

Think about it this way - if a credit card company only gave out lines of credit to people who didn't have some form of monthly housing payment, how would they stay in business?

-Random dude on internet

I think we're getting into semantics here. I was specifically referring to HIGH lines of credit.

 

[Cranston37+]

I think we're getting into semantics here. I was specifically referring to HIGH lines of credit.

Yep, you said so in your post. My answer was considering that.

 

[JohnRice]

This is always an interesting, but pointless progression of a discussion. It starts off with standard examples that apply to ordinary life situations, with responses of "But, what about..." examples that are increasingly extreme and far from ordinary, until the initial point has been completely forgotten.

...moving along now...

 

[Cranston37+]

This is always an interesting, but pointless progression of a discussion. It starts off with standard examples that apply to ordinary life situations, with responses of "But, what about..." examples that are increasingly extreme and far from ordinary, until the initial point has been completely forgotten.

...moving along now...

Seems like it's been a good, informative discussion to me, but if that's what you want...
Cheers

 

[JohnRice]

Seems like it's been a good, informative discussion to me, but that's what you want...
Cheers

Yeah, you're right. I'm focusing on the resistance. Unfortunately I've been through a Master's course in debt, credit and so on the last 25 years. I've pretty much experienced all the joys it has to offer, so I'm fairly confident I have it mostly figured out.

 

[John Dirk]

I'll say this. I owe no one anything at this point. When I did, I generally "paid as agreed." My FICO score dropped [significantly] when I paid off my house. It's creeping back up now but will eventually drop again unless I take out more loans. I have zero debt but am considered a lower credit risk than when I had more? That doesn't make sense.

Credit scores and credit worthiness are falsely calculated on how often a consumer uses credit responsibility, while ignoring other important factors such as income and net worth.

As someone I admire [Dave Ramsey] said, if he walks into an apartment building and wants to rent an apartment he'll be turned down because he has no credit score. He has no score because he hasn't borrowed money in many years which is the only thing the "score" considers." Some of you already know Dave is a nationally syndicated talk show host and entrepreneur with a conservative net worth of 55 million dollars. He can buy the building yet can't rent an apartment in it.

Sorry to preach but this is a sore topic with me.

 

[Cranston37+]

As someone I admire [Dave Ramsey] said, if he walks into an apartment building and wants to rent an apartment he'll be turned down because he has no credit score. He has no score because he hasn't borrowed money in many years which is the only thing the "score" considers." Some of you already know Dave is a nationally syndicated talk show host and entrepreneur with a conservative net worth of 55 million dollars. He can buy the building yet can't rent an apartment in it.

That's not accurate, though. Someone with no credit history (listed as "indeterminable") would just go through the process of being manually underwritten.

A credit score is an automatic view into your financial trustworthiness. Without it a lender would have do it manually with the records you provide. It really gives the same info, it just takes longer.

I assure you Dave Ramsey can rent an apartment.

 

[John Dirk]

That's not accurate, though. Someone with no credit history (listed as "indeterminable") would just go through the process of being manually underwritten.

Most lenders will not do manual underwriting. They're set up to process the masses. I sort of think you already understand this so I'm a bit confused.

 

[Cranston37+]

Most lenders will not do manual underwriting. They're set up to process the masses. I sort of think you already understand this so I'm a bit confused.

With all due respect John (and I really do sincerely mean that) that just isn't true.

I work for one of the biggest banks in the country (US Bank) and we do it every day. Everybody does it.

I offer my incredibly faded through the years coffee mug as proof

 

[DaveF]

With all due respect John (and I really do sincerely mean that) that just isn't true.

I work for one of the biggest banks in the country (US Bank) and we do it every day. Everybody does it.

I offer my incredibly faded through the years coffee mug as proof

This is the difficulty with pop-culture financial advisors like Dave Ramsey. They tend have a good idea (like personal debt triage), but then speak about topics way outside their knowledge base. And get some important stuff wrong.

And it’s tough for the us average joes to filter through what’s their actual expertise and what they’re just BS’ing on because they have to fill air time.

So we do the best. Take the stuff that works for you. Learn to filter out the other stuff.

 

[JohnRice]

With all due respect John (and I really do sincerely mean that) that just isn't true.=

Yep...

This is the difficulty with pop-culture financial advisors like Dave Ramsey. They tend have a good idea (like personal debt triage), but then speak about topics way outside their knowledge base. And get some important stuff wrong.

Yep...

Negative misinformation that sends people into a panic just sells, and people want to believe it, no matter what. What annoys me is that crap drives people to predatory places like DriveTime and Conn's, thinking they can't get reasonable financing anywhere. I've gone through the whole process. My life collapsed back in the early 2000s and I went from great credit to bad credit to no credit. I went without any credit at all for about 12 years. A checking account with a debit card. That's it. I fell for all this misinformation, thinking I would never recover, and it had a severely negative effect on my entire approach to life. I don't suggest doing that. Everyone should have a credit card, they should use it and they should pay it in full every month. it will make life easier in the long run. That's not debt, it's credit.

@John Dirk , you know me a little don't you? Listen to what I'm (and a couple others here are) saying. You've been horribly misinformed, and it's altering how you live your life. I could go into more detail from experiences I've had, as well as people I know personally. If there's not actually anything bad in your official history, a good lender will ask for more info. Crappy lenders won't bother. They don't deserve your business.

 

[John Dirk]

With all due respect John (and I really do sincerely mean that) that just isn't true.

I work for one of the biggest banks in the country (US Bank) and we do it every day. Everybody does it.

I offer my incredibly faded through the years coffee mug as proof

View attachment 61541

I'm never offended when presented with factual information that contradicts what I thought I knew. That's called "learning." I'm not in the industry so I was just repeating what I've read. My wife did once work for Carmax as an underwriter. She said this was done for certain applicants but not as a general rule. I'm not clear on what the criteria might have been to initiate manual underwriting or if things are still the same today.

My initial concern when I saw my score plummet was, "what if I decide to buy a new car." Won't the lender automatically offer you a rate based on your FICO score with no further investigation into the specifics?

 

[John Dirk]

you know me a little don't you? Listen to what I'm (and a couple others here are) saying. You've been horribly misinformed, and it's altering how you live your life. I could go into more detail from experiences I've had, as well as people I know personally. If there's not actually anything bad in your official history, a good lender will ask for more info. Crappy lenders won't bother. They don't deserve your business.

I may have been misinformed but it's not altering how I live my life one bit. I do exactly as you suggested and have for years. I have a single credit card which I use for all of my larger purchases. I have automatic payments setup and pay the full balance every month. If I go a little crazy and rack up a huge balance then I just have to take the hit when it's time to pay. As you said, "that's credit, not debt."

 

[John Dirk]

This is the difficulty with pop-culture financial advisors like Dave Ramsey. They tend have a good idea (like personal debt triage), but then speak about topics way outside their knowledge base. And get some important stuff wrong.

And it’s tough for the us average joes to filter through what’s their actual expertise and what they’re just BS’ing on because they have to fill air time.

So we do the best. Take the stuff that works for you. Learn to filter out the other stuff.

Dave Ramsey is heavily involved in Real Estate and has been for a long time so he actually should know the relevant facts. If he's telling folks otherwise I would suspect it's intentional and designed to steer them to his preferred lender as they are also a sponsor of his radio show. I met him once and do respect him but, if that's what he's doing, them shame on him.

 

[Cranston37+]

I'm never offended when presented with factual information that contradicts what I thought I knew.

I'm elated that that's how you took it. That's all I really care about...

 

[JohnRice]

...if that's what he's doing, them shame on him.

Think about it this way. I don't know who Dave Ramsey is, but if he has a national radio show, invests in real estate and probably travels the world constantly, is there any way in hell he doesn't have a single credit card? No. There isn't. Is there any way he does all those investments with ZERO credit profile? No, there isn't. It's a credit score, not a debt score. There is absolutely no way on earth he isn't using any credit at all. No possible way.