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re: Who is ready for the next big financial crisis?
Posted on 12/19/15 at 10:24 am to KTownRebel
Posted on 12/19/15 at 10:24 am to KTownRebel
quote:
I have about 2500 in the bank. No 401k. No other accounts. 12k in credit card debt. How fricked am I?
Your credit score is probably not so good, depending on how many credit card accounts you have open and the balance compared to the credit limit. It's not hard to improve your score though if you can pay some of them off and close the accounts. Or get a card with a promotional deal like no interest on balance transfers for 18 months, and then transfer the balance on a high interest card. That way you're paying off more of the principal every month instead of paying interest.
Ideally you would have two credit cards tops, with the balance no higher than one third of the credit limit. If your balance is higher than one third of the credit limit, your cards are actually working against you and hurting your credit score.
3
Posted on 12/19/15 at 12:03 pm to Stonehog
I'm a millennial and I have little to no savings. I'm 28 and just started a new job. I do have a 401k putting 6% in with a 6% company match. The girlfriend and I are looking to buy a house soon because renting is like throwing over 14k a year away.
Posted on 12/19/15 at 5:42 pm to Stonehog
quote:
pay some of them off and close the accounts.
You were right about most of what you said except this. Do NOT close your revolving accounts. If you do this, you will effectively remove years of credit history from your report and this WILL have a negative impact. Pay it off, but keep it open. This is how you increase your AAA (average age of accounts). The longer your established credit history, the better for you. Never close a revolving account if you can avoid it. If nothing else, use it for Christmas buying each year and then pay it off.
Posted on 12/19/15 at 7:18 pm to Stonehog
Wrong. My credit score is actually fantastic. 0 late payments and top rating on everything except my available credit. Which is obvious due to the fact that I owe so much. That's between me and my wife btw. She owes 7k. All for that injury we were trying to stay afloat. Anyway, it is around the 725 zone which is good for someone with no huge purchases and minimal credit available. As soon as I pay it down I will be golden
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