Anyone gone from excellent credit, to abysmal credit?

[Queen]

I know many of of here aren't fulltimers and are still beholdin' to "the man" for some things.  Moving into retirement I wonder what it will be like to watch my credit score drop like a stone.  As I understand it minimal income and no use of credit is sufficient to drop the score significantly.

Anyone gone from 800+ credit down to a low score?  Did you find it had an impact on you even when you weren't using or applying for credit, things like job hunting or insurance?

 

[ArtW]

Insurance will definitely be affected, i definitely disagree with the notion that you credit should affect your insurance, but there it is
I never had an 800+ credit score, but i've sure had BAD credit before, and it makes everything cost more
Does it really drop your score that much? My annual income is below 30K and i have close to 700 last i checked

 

[slynne]

I am in a battle with BofA about a second mortgage that is probably dinging my credit right now since I have stopped paying them. I have seen no effect from this so far. My insurance agent confirmed that they only check credit for new customers so since I have been a loyal customer for 25 years and have always paid my premiums, I am ok there. My job doesn't do credit checks (something btw, I have noticed seems to be more common for low income jobs and is just another way our system abuses those at the bottom).

Thing is that the house is underwater. I could just walk away at any time and the best part is that if I did, BofA would get nothing since the primary lender has first dibs. I don't really even want the house so I am not afraid to lose it. I don't want to get more loans so bad credit doesn't scare me plus I know from having bad credit before, it really only takes a couple of years to restore it.

 

[Every Road Leads Home]

That's me right there! I went from a 790 to a 610 since being on disability the last three years. It's not really affected me too much yet as i've not needed credit for anything. Heck even getting a cellphone and internet can require a credit check. Thankfully I own my house and truck outright, but can see where this could severely impact someone like if they needed a job or an apartment. When you're already down on your luck and then the system screws people even harder, it's a bit disheartening. I've been thinking of buying a new truck and financing it in the next year or two, wonder if I'd even be approved? Hopefully my score stays where it's at.

 

[Queen]

Art - I agree, it is just another way to keep us all as good little drones, it's BS. Not sure how much it dings your credit to have a tiny income, but I'm already seeing an impact because we don't use credit.

Slynne - We've been with State Farm for a million years so that's good to hear. And I definitely get what you're saying about lower income jobs, they seem to be vetted in a way that higher paying jobs aren't. AsI told my wife when she said she wasn't planning on updating her resume and getting her references in order, I have never been so thoroughly checked out as I was when applying for part time minimum wage jobs. Pee test, credit check, background check, reference check...

 

[Queen]

That's me right there!  I went from a 790 to a 610 since being on disability the last three years.  It's not really affected me too much yet as i've not needed credit for anything. Heck even getting a cellphone and internet can require a credit check. Thankfully I own my house and truck outright, but can see where this could severely impact someone like if they needed a job or an apartment.  When you're already down on your luck and then the system screws people even harder, it's a bit disheartening.  I've been thinking of buying a new truck and financing it in the next year or two, wonder if I'd even be approved?  Hopefully my score stays where it's at.

It's one of the reasons we're going back to the condo, it's paid for (so is our 2016 truck).  Coming back for this year and going into an apartment required a credit check and state police background check (sex offender registry and something else).  They make it so hard for poorer people to do ANYTHING, hell at the condo my next door neighbor could be an axe murderer and I'd never know it unless he wandered over with a bloody axe.

And I've gone from and 820 score down to 789 (so far), because we pay cash for whatever we buy.

 

[Reducto]

It won't get down to abysmal from lack of use. That takes actual dings like bankruptcy.

Mine went from 809 down into "fair" territory with one card going into collections and it didn't really affect me at all. I was able to get a .9% car loan and my profession has me applying for a dozen jobs and several casino gaming licenses every year, none of which were affected.

 

[Every Road Leads Home]

 Coming back for this year and going into an apartment required a credit check and state police background check (sex offender registry and something else).  They make it so hard for poorer people to do ANYTHING,

My Mom had the hardest time reestablishing her life. 22 years of marriage coming to an end, with little to no credit of her own and because of that she couldn't get an apartment, a car, or a minimum wage job.  My brother co signed for an apartment and I co signed for a car.  10 years later she's doing fine, but it was a rough 24 months for her.  

The system has a big flaw for people in her situation.  You're forced to stay on government poverty assistance which isn't better for the person or the greater good of the country.  If she didn't have the support system of friends and family, then that would have been an impossible or at least very difficult situation to climb out of.

 

[Queen]

My Mom had the hardest time reestablishing her life. 22 years of marriage coming to an end, with little to no credit of her own and because of that she couldn't get an apartment, a car, or a minimum wage job.  My brother co signed for an apartment and I co signed for a car.  10 years later she's doing fine, but it was a rough 24 months for her.  

The system has a big flaw for people in her situation.  You're forced to stay on government poverty assistance which isn't better for the person or the greater good of the country.  If she didn't have the support system of friends and family, then that would have been an impossible or at least very difficult situation to climb out of.

My mom was in a similar circumstance when my dad died, although she had decent credit in her own name, she still took a huge hit when his income disappeared.  I got her a credit card as my authorized user and my brother co-signed on home equity loan.  She was humiliated, coming from a lifetime of always paying their bills and playing by the rules; it was a huge impetus for me to find a way to get out of the mainstream (as much as I ever embraced it to begin with).

 

[Every Road Leads Home]

I think a parent asking/needing their children for help can be one of the hardest things for them as they are hardwired to be able to be doing that for you. Glad we were able to help. Had it happened at this stage in my life, i'd not have been able to do much for her, other than letting her move in with me and not sure she'd even have wanted too

 

[grimmal]

Our farm is in my wife's name  and she has bought two new vehicles and has credit cards from when she worked. Her credit is at 800. It has gone down some on fico and it always says because lack of consumer loans.  I always pay cash including used vehicles . My credit is about 675 from lack of credit .  We have been together for 35 years and have the same bank account but somehow paying cash for everything just doesn't help your score. I have 3 cards I rarely use unless they will only take credit ( Amazon, Walmart .com , motel room etc.) My 3 cards have a limit that is under just one of hers.  Hard to understand their logic sometimes.

 

[BradKW]

I think there might be some misunderstandings here about how credit scores are derived...for example, your Income is not part of your credit report. Lenders get your income information from your credit application or they may use an estimated income.

Because it is not part of your credit report, income is not considered by credit scoring systems that use only your credit history. There are some customized credit scoring systems; however, that also pull in details from your credit application, including your income. Scores from those systems would be affected by your income. But in general, most loans and credit cards rely on what you claim your income to be. And regardless, a change in income is in no way reported.

Credit scores can drop for a number of reasons, and while under-utilization is one of them, it's a low and slow impact. I highly recommend to anyone interested in their credit, using Credit Karma ...it's a free service I've found helpful for years. The link explains how they stay "free", and I have no problem with lending institutions sending offers. 

Scores are updated every 7 days with Transunion and Equifax, and it will show you why it went up or down, and lets you see if there might be a problem you'd otherwise be unaware of.

Simply using a card and paying it off immediately via online is all it takes to avoid under-usage problems.

Taking out a personal loan for even $500 and putting it in bank, set up autopay, and let it alone is a great way to improve your score for only a few points of interest...

 

[Milk Hauler]

I always had good credit when I was younger. After this getting divorced 16 years ago, I decided to changed the way I lived. Cash and carry.

Anyways fast forward to last month when I decided I wanted a new car, but didnt have $19k sitting around. I signed up for credit karma and as I figured, my fico was ZERO! Last activity was in 02-03 when I paid my car off.

After 22 hard inquiries, I found a credit union that picked up my loan with $1k down. I went from a 0% apr and no down to 11% and $1k down.

Talk about highway robbery. I am howerver grateful for a 2nd chance. My plan is to pay this off in a year, vs 6 years. So yeah Im one of those that went from cheap loans, to getting the shaft

 

[Dennis]

I haven't used/had credit in 17 years. So yes, right now my credit report says I don't exist. Same as bad credit.

About the insurance....I had State Farm for over twenty years until I needed to make a claim. When it came time for renewal they declined to cover me. It was a covered claim or they wouldn't have paid.
Then went to Farmers. Several years later I bought a second vehicle and added to my policy. They thought it was a good time to check my credit. Well, I didn't have any since I paid cash for everything. Couldn't have that so they had an opportunity to up the cost for my coverage.....since they didn't know anything about my payment history? It was a pretty substantial hike also. They kept boosting the cost to a point I had to quit them. Zero claims, paid on time and no violations.

I would say if you want to stay in the loop you need to keep using it and keep accounts paid up or off. Never know when you might really need a good credit report. Rent, employment, cheaper insurance, etc.

 

[jimindenver]

My score went up a bit from the last time I checked in January only because at the time I hadn't paid off the two cards I use and pay off monthly yet. That means it must fluctuate a bit depending on what time of the month it is. I also had a higher than usual balances at the time due to getting ready to leave.

 

[IanC]

I haven't checked mine for years. I had already paid off every loan I had except for the mortgage and I was never late on that in the 7 years I had it. now that is gone too. Haven't had a credit card in about 12 years - like Dennis, I have paid cash for everything for a long time, so who knows. I haven't had an income in over a year either. I'm not about to go into debit just to raise my score as they suggest - let the chips fall where they may.

 

[TMG51]

I full time and have a credit score of 760.

 

[VanKitten]

I keep two credit cards.

I make a point of using them. I alternate months. I buy a couple tanks of gas. That's it.

Pay it in full and switch to the other card for the next billing cycle.

I do it to: 1) keep the credit card company from cancelling the card for inactivity...and 2) keep my score from dropping like a rock now that I retired and don't work at the track any more.

It seems to be working.

 

[Oopslala]

I've been full timing a year now and I'm at 721. Only monthly payment is $100 on student loans.

 

[Queen]

I've got three credit cards from big banks that I've had forever, they sit in the lock box and never get used. I'll get one from the bank or CU when we go back to FL that I'll actually use occasionally. We'll also set up a HELOC over the summer before my honey is done working.

Good to hear that the score may not bottom just because we'll be poor. I hope to never need credit again but you just never know what might come up when you own a place.