vania-janet/multiturn-rag-retrieval-data huggingface dataset:
"(Ignoring any ethical considerations of defaulting on a mortgage obligation) If your credit score fell, future costs of borrowing would be greater, if you could borrow money at all. The true financial cost of these penalties would depend on your own intentions and circumstances. The value of a credit score cannot be quantified in any absolute sense because of these circumstances which will vary from person to person. Suppose a decision would result in your score falling from 700 to 600. As a result, a future car loan would cost something like 2% more in interest per year. Let's also suppose you would not be able to find a bank to give you money to buy a new home.  The difficulties caused by this situation would depend on the person. Some people have no intention of taking out another mortgage or buying another car, and to them, a lowered credit score might make no difference. To others, it would be desirable to avoid these penalties. The value of credit score would be equal to how much you would be willing to pay in the present to avoid these future penalties.  If you intend to borrow money in the near future, and somehow know how much more interest you will pay as a result of your lower score, then you could approximate the value of the credit drop by summing all of the additional interest costs discounted into the present. Something a little like this: Year's Additional Cost in Interest / (1 + Your Personal Opportunity Cost of Funds) ^ (Years in the future this extra interest will be paid).  See time value of money explanation: Can you explain ""time value of money"" and ""compound interest"" and provide examples of each? It could also be the case that you miss out on valuable financial opportunities as a result which could be added to the present value of the credit score drop.  For example, if the drop made you totally unable to purchase an investment property that would net you $10,000 in cash flows /year (which would yield cash flows immediately). The value of that investment would have been $10,000 / (1 + Your Personal Opportunity Cost of Funds). Since you would not be able to make that investment (in this example) as a result of the decreased score, the present value of the investment would be an opportunity cost of the lower score. There are other hard-to-quantify costs of low credit to consider as well, ranging from housing to employment to bragging rights.  Hopefully this has helped :)"
What's the fastest way I can raise my credit score from nothing? I worked at a bank for almost 6 years and used their secured credit card.  To give you an example of what that did as far as credit was concerned: on Transunion my score increased 200+ points, while on Experian and Equifax, it increased by less than 150.  Most customers who used the card also saw an increase, provided that they paid on time and didn't max out the card. Some strategies I used and I recommended to my customers:
The length of time you have established credit does improve your credit score in the long run. As long as you can avoid paying interest, you might see if you can get a card with cash back rewards. I have one from Citi that sends me a $50 check every so often when I have enough rewards built up.
FICO score tracks credit, not checking or savings. Unless there was a credit line attached, no impact at all.
Usually, it's not a good idea as it will not only raise your debt to income ratios,  but also impact your credit scores. However, if you have extensive credit history, having owned a home or two for a while (read: 10-20 years), taken out multiple auto loans in the past and paid them satisfactory, your credit score may not take a big hit. Possibly ust 5-10 points or it can be 30-40 points. It really depends on the depth of your credit profile.
I've seen my score dip a little bit after every hard pull.  (Admittedly, a fako score.)  You apply for credit or for a credit increase and your score is going to dip. Any check that is not intended to grant credit (either an existing creditor rechecking, or when you check your own credit) has no effect on your score.  Likewise, a check done to screen for a solicitation have no effect as you are not trying to borrow.  (Taking them up on the offer will normally cause a hit, though.)
Generally speaking the lower credit score trumps.  In the case you cite, the lower credit score will prevail.  However, you may need to do exactly that in order to qualify for the loan income wise.   There are two factors when obtaining a mortgage, really all loans, but more so with a mortgage:  the likeliness to repay (credit score),  and your ability to service the debt.  This last one is a combination of income and debt-to-income ratio. If you don't have enough income to qualify for the loan or fail to meet the debt to income ration, you may have to use your GF's income to qualify despite her poor credit. You might want to see past posts about buying property with non-spouses.  It could work, but generally it requires a lot of legal work before closing on the deal.  Avoiding this will lead to tales of woe.
"Great explanation. I want to add 2 thing: 1) Credit rating agencies played there role in messing up the economy, by giving subprime (higher risk) mortgage backed securities AAA rating.  2) ""Other banks saw this happening and were forced to lower their requirements for issuing mortgages."" Well not banks, but mortgage brokers lowered there requirement from issuing mortgages. They even started to issue NINA (no income verification, no assets verification) loans!"
Short-term it will not help, it will actually hurt your credit score. Long-term, it will help for a couple of reasons: The mix that others refer to is mortgage and auto loans which do not count as revolving credit. A mortgage will help more than a credit card in this case, but may not make sense in your circumstances.
Patrick, This article points out three likely effects (direct and indirect) sovereign default can have on the individual: http://tutor2u.net/blog/index.php/economics/comments/the-sovereign-default-option-is-costly/ This looks at how a default may not look like a default - even if it is. But again, how defaults can impact the man in the street: http://online.wsj.com/article/SB10001424052748703323704574602030789251824.html The fascinating Argentine default is described in a blow-by-blow format here, including brief references to things like unemployment and personal savings: http://theinflationist.com/sovereign-default/argentine-sovereign-default-2002-argentina-financial-crisis Remember, though. Not all defaults are the same. And a modern-European country's default may look very different to what has occurred elsewhere.
"I am a bit confused here as to how a 4K loan will negatively effect your credit score if payments are made on time.  FICO scores are based upon how well you borrow.  If you borrow, pay back on time, your score will not go down.  Perhaps a bit in the short run when you first secure the loan, but that should come back quickly.  In the long run it will help improve your score which seems like it would be more important to you. Having the provider finance your loan will probably not show up on your credit unless you fail to pay and they send to collections. If the score is so important to you, which I think is somewhat unwise, then use a credit card.  With a 750 you should be able to get a pretty good rate, but assume it is 18%.  In less then 9 months you will have it paid off, paying about $293 in interest.  You could consider that a part of the cost of doing business for maintaining a high credit score.  Again not what I would advise, but it might meet your needs. One alternative is go with lending club.  With that kind of score, you are looking at 7% or so.  At $500 a month, you are still looking at just over 8 months and paying about $100 in interest.  Much less money for improving your credit score. Edit based upon the comment: ""My understanding is that using a significant portion of your available credit balance is bad for your credit, even if you pay your bills on time."" Define bad.  As I said it might go down slightly in the short term.  In three months you will have almost 33% of the loan paid off, which is significantly lower then the original balance.  If you go the credit card route, you may be approved for quite a bit more then the 4000, which may not move the needle at all.  Are you planning on buying a home in the next 90 days?  If not, why does a small short term dip matter?  Will your life really be effected if your score goes down to 720 for three months? Keep in mind this is exactly the kind of behavior that the banks want you to engage in.  If you worship your FICO score, which gives no indication of wealth then you should do exactly what I am suggesting."
I am no expert, but lots of things can cause drops.  Large unsecured revolving debt (credit cards) - even jf you payoff monthly, unpaid medical bill, acquiring multiple credit cards or other multiple credit searches, any form of lawsuit, and I am sure several other things
I agree that the cause of the crash can make a huge difference in the effect on the bond market. Here's a few other possibilities: All that to say that there's no definitive answer as to how the bond market will respond to an equity crash.  Bonds are much more highly correlated to equities lately, but that could be due to much lower interest rates pushing more of the risk of bonds to the credit worthiness of the issuer, increasing correlation.
"Going off hearsay here. I believe your question is. ""Does not having a credit card lower your credit score"" If that is the question then in the UK at least the answer appears to be yes. Having a credit card makes you less of a risk because you have proven that you can handle a little bit of debt and pay it back. I have a really tiny credit history. Never had a credit card and the only people who will lend to me are my own bank because they can actually see my income / expenditure. When I have queried my bank and at stores offering credit they have said that no credit history isn't far off a bad credit record. Simply having a credit card and doing the odd transactions show's lenders you are at least semi-responsible and is seen as a positive. Not having a credit card and not having much else for that matter makes you an unknown and an unknown is a risk in the eyes of lenders."
Will having a lower credit limit, which I will still never reach, negatively impact my ability to get a mortgage in future? This would increase your utilization, the percentage of your total available credit that you use at any one time.  Because it decreases the divisor, your total available credit, while not changing the dividend, the amount of your credit that you use.  In the United States, you generally want utilization to be between 8% and 30%.  So if this increases your utilization, it could hurt your credit score (or if your utilization is low enough, possibly help it).   I do not know if the rule is the same in the United Kingdom or not, but this site claims that it is at least similar.   22% is an OK utilization, assuming you have no other debt.  But a utilization of 17% is closer to 8% and may be better.  It may be worth calling them to keep your credit limit where it is if they don't ask too much from you.
Your plan will work to increase your total credit capacity (good for your credit score) and reduce your utilization (also good).  As mentioned, you will need to be careful to use these cards periodically or they will get closed, but it will work. The question is whether this will help you or not.  In addition to credit capacity and utilization, your credit score looks at things like These factors may hurt you as you continue to open accounts.  You can easily get to the stage where your score is not benefitting much from increased capacity and it is getting hurt a lot by pulls and low average age. BTW you are correct that closing accounts generally hurts your score.  It probably reduces average age, may reduce maximum age, reduces your capacity, and increases your utilization.
Absolutely. It's the way credit is calculated. The most important things here are credit utilization (how much of your open credit you're using, the less the better for your score) and and length of open credit. The longer you've had a credit card, the more it helps your score. If you use your card and pay it off before the bill comes, the credit card company still knows you're using the card and won't close it. I recommend you download credit karma so you can track your score and learn more about how credit is calculated.
Most business credit cards do not report to the personal credit report unless the person pays the card late. Given that fact, any debt carried on these cards does not hurt the credit score if it is not reported. You can carry credit card debt on these cards without hurting your credit score. Just apply for business credit cards now to start building this segment of your credit.
"**[More Details](http://researchnews.osu.edu/archive/heavydebt.htm) . . .**  * http://researchnews.osu.edu/archive/heavydebt.htm  **Here Are The Studies . . .**  * ""[Were Consumer Mistakes Related to Changes in Financial Obligations Burdens?](http://www.consumerinterests.org/pdffiles/2012-conference/2012-55%20Were%20Consumer%20Mistakes%20Related%20to%20Changes%20in%20Financial%20Obligations%20Burdens.pdf)"" by Sherman D. Hanna, Yoonkyung Yuh, and Swarn Chatterjee: http://www.consumerinterests.org/pdffiles/2012-conference/2012-55%20Were%20Consumer%20Mistakes%20Related%20to%20Changes%20in%20Financial%20Obligations%20Burdens.pdf      Via: http://www.consumerinterests.org/2012-Conference-papers.html  * ""[Increasing financial obligations of US households: Who is affected?](http://onlinelibrary.wiley.com/doi/10.1111/j.1470-6431.2012.01125.x/abstract)"" by Sherman D. Hanna, Yoonkyung Yuh, and Swarn Chatterjee: http://onlinelibrary.wiley.com/doi/10.1111/j.1470-6431.2012.01125.x/abstract"
There are a couple of things to consider.   First, in order to avoid interest charges you generally just need to pay the statement balance before the statement due date.  This is your grace period.  You don't need to monitor your activity every day and send immediate payments.  If you're being really tight with money, you can actually make a little profit by letting your cash sit in an interest bearing account before you pay your credit card before the due date. Second, credit card interest rates are pretty terrible, and prescribed minimum payments are comically low.  If you buy furniture using your credit card you will pay some interest, be sure to pay way more than the minimum payment.  You should avoid carrying a balance on a credit card.  At 20% interest the approximate monthly interest charge on $1,000 is $16.67. Third, if you carry a balance on your credit card you lose the interest grace period (the first point above) on new charges.  If you buy your couch, and carry the balance, when you buy a soda at 7-11, the soda begins to accrue interest immediately.  If you decide to carry a balance on a credit card, stop using that card for new charges.  It generally takes two consecutive billing period full balance payments to restore the grace period. Fourth, to answer your question, using a credit card to carry a balance has no impact on your score.  Make your payments on time, don't exceed your limits, keep your utilization reasonable.  The credit agencies have no idea if you're carrying a balance or how much interest you're paying. To Appease the people who think point four needs more words: Your credit report contains your limit, your reported balance (generally your statement balance), and approximate minimum payment.  There is no indication related to whether or not the balance contains a carried balance and/or accrued interest.  The mere fact of carrying a balance will not impact your credit score because the credit reporting bureaus don't know you're carrying a balance.  Paying interest doesn't help or hurt your score.  Obviously if your carried balance and interest charges push your utilization up that will impact your score because of the increased utilization. Make your payments on time, don't exceed your limits, keep your utilization reasonable and your score will be fine.
"I answered a similar question, How will going from 75% Credit Utilization to 0% Credit Utilization affect my credit score?, in which I show a graph of how utilization impacts your score.  In another answer to Should I keep a credit card open to maintain my credit score?, I discuss the makeup of your score.  From your own view at Credit Karma, you can see that age of accounts will help your score, so now is the time to get the right cards and stay with them.  My background is technology (electrical engineer) and MBA with a concentration in finance. I'm not a Psychology major. If one is undisciplined, credit can destroy them. If one is disciplined, and pays in full each month, credit is a tool.  The quoting of billionaires is a bit disingenuous. I've seen people get turned away at hotels for lack of a credit card. $1000 in cash would not get them into a $200/night room. Yes, a debit card can be used, but the rental car and hotel ""reserve"" a large amount on the card, so if you don't have a high balance, you may be out of town and out of luck.  I'll quote another oft-quoted guru: ""no one gets rich on credit card rewards."" No, but I'm on track to pay for my 13 year old's last semester in college with the rewards from a card that goes right into her account. It will be great to make that withdrawal and not need to take the funds from anywhere else. The card has no fee, and I've not paid them a dime in interest.  By the way, with 1-20% utilization ideal, you want your total available credit to be 5X the highest monthly balance you'd every hit.  Last - when you have a choice between 2% cash reward, and the cash discount Kevin manages, take the discount, obviously."
it is better for your credit score to pay them down over time. This is a myth. Will it make much of a difference? You are paying additional interest even though you have the means to pay off the cards completely. Credit score is a dynamic number and it really only matters if you are looking to make a big purchase (vehicle, home), or perhaps auto insurance or employment. Pay off your credit cards, consolidate your debt, and buy yourself a beer with the money you will be saving. :)
Personally the main disadvantages are perpetuation of the credit referencing system, which is massively abused and woefully under regulated, and encouraging people to think that it's ok to buy things you don't have the money to buy (either save up or question price/necessity).
The biggest issue with personal bankruptcy is that your credit rating determines a lot more than whether someone will lend you money. In particular, someone with bad credit will find it *extremely* difficult to rent a house or apartment, something that will be of utmost importance if you've just turned in your home as collateral.
In six months, there is little you can do that will significantly affect your future credit rating other than trying to avoid paying for something by leaving the country. As we keep telling people, the best things you can do for your credit rating are to have a good income and Don't Be Stupid about misusing credit.
How will going from 75% Credit Utilization to 0% Credit Utilization affect my credit score? might answer your question if US based.  In the US, what counts is what shows on the bill. I've run $20K through a card with a $10K limit, but still ended the month under $2K by making extra payments. As long as you stay ahead of the limit by making mid-cycle payments, I see no issue with this strategy. If you keep running $30K/mo through a card with a $10K limit, the bank will eventually catch this and raise your limit as you will have proven you are more credit worthy.
"First of all, whatever you do, DON'T PAY!  Credit reporting agencies operate on aged records, and paying it now will most certainly not improve your score.  For example, let's say that you had an unpaid debt that was reported as a ""charge-off"" to the credit bureaus.  After, say, six months, the negative effect on your score is reduced.  It is reduced even further after a year or two, and after two years, the negative effect on your score is negligible. Now, say you were to pay the debt after the two years.  This would ""refresh"" the record, and show as a ""paid charge-off"".  Sure, now it shows as paid, but it also shows the date of the record as being today, which increases the effect on your credit drastically.  In other words, you would have just shot yourself in the foot, big-time. As others have noted, the best option is to dispute the item.  If, for some reason, it isn't removed, you are allowed to submit an annotation to the item, explaining your side of the story.  Anyone pulling your credit record would see this note, which can help you in some instances.  In any case, these scam artists don't deserve your money. Finally, you should check who is the local ombusdman, and report this agent to them.  She could lose her license for such a practice."
In principle, a default will have no effect on your bank account. But if the US's credit rating is downgraded, the knock-on effects might cause some more bank failures, and if the debt ceiling is still in place then the FDIC insurance might not be able to pay out immediately.
"Exactly what accounts are affected by any given transaction is not a fixed thing. Just for example, in a simple accounting system you might have one account for ""stock on hand"". In a more complex system you might have this broken out into many accounts for different types of stock, stock in different locations, etc. So I can only suggest example specific accounts. But account type -- asset, liability, capital (or ""equity""), income, expense -- should be universal. Debit and credit rules should be universal. 1: Sold product on account: You say it cost you $500 to produce. You don't say the selling price, but let's say it's, oh, $700. Credit (decrease) Asset ""Stock on hand"" by $500. Debit (increase) Asset ""Accounts receivable"" by $700. Credit (increase) Income ""Sales"" by $700. Debit (increase) Expense ""Cost of goods sold"" by $500. 2: $1000 spent on wedding party by friend I'm not sure how your friend's expenses affect your accounts. Are you asking how he would record this expense? Did you pay it for him? Are you expecting him to pay you back? Did he pay with cash, check, a credit card, bought on credit? I just don't know what's happening here. But just for example, if you're asking how your friend would record this in his own records, and if he paid by check: Credit (decrease) Asset ""checking account"" by $1000. Debit (increase) Expense ""wedding expenses"" by $1000. If he paid with a credit card: Credit (increase) Liability ""credit card"" by $1000. Debit (increase) Expense ""wedding expenses"" by $1000. When he pays off the credit card: Debit (decrease) Liability ""credit card"" by $1000. Credit (decrease) Asset ""cash"" by $1000.
For people with attempted to achieve credit rating coming from a huge rely or perhaps organized credit score card issuer then you can discover how complicated its to get authorised. They generally interest some kind of credit score, when you need a low interest rate quote and additional returns after that your credit score has to be excellent.
From what I have heard on Clark Howard if you pay your balance off before the statement's closing date it will help your utilization score.  He has had callers confirm this but I don't have first hand knowledge for this to be true.   Also this will take two months to make the difference.  So it will be boarder line if you will get the benefit in time.   Sign up for credit karma if you like.  You can get suggestions on how to help your score.