Credit Score Update
Posted Under: Debt Tales
I have a card through Washington Mutual (was called Providian went I got it, now it’s owned by Chase) that lets me see my FICO credit score each month on their web site. I also signed up to receive an email update if the score ever changed by more than 20 points in a month. I never had received an email until now.
The score changed from 642 to 702. I know this was because we did the refinance that eliminated a great portion of our revolving debt.
The site also shows the score for every month in the last year and my score was between 636 and 652 all year.
It’s good to see it getting into more respectable territory. Even if I don’t apply for any more credit, I’d like the score to be good. I’ve heard car insurance companies even base your rate on your score, so it could come in handy if I look for a lower rate.
Reader Comments
It’s a good idea to track your credit score. Even though Dave Ramsey says you don’t “need” credit, I tend to disagree. So many places check your credit to make instant decisions (like when you try to get a cell phone–I even had to get a credit check to have my utilities turned on!). Many employers can now check credit too, and make an employment decision partially based on that. It sucks, but it’s the truth.
That said, I think that if you ever want to be debt free, you need to swear off credit cards…FOREVER. Not even to be used and paid in full each month. Now–I do have credit cards in my wallet, but none have a balance, and the one that does was cut up to prevent future use. And I do not use the others for any reason. By moving your debt into your mortgage, you reduced the interest rate which is good, but now your house is at risk if something happens and you can’t make that huge monthly payment. What I would have done was the Debt Snowball, but it’s too late for that.
Sorry if that came off the wrong way! I think you are on the right track.
I wrote about my refinance in December and said at the time that I didn’t like doing it for several reasons. One you mentioned- putting unsecured debt onto my house debt.
If I had things to do over, I’d hope I’d wake up and start trying harder to knock the debt down sooner. By the time I admitted I was in trouble, I was in too deep. I couldn’t even make all the minimum payments- much less pay extra to lower the debt!
I wouldn’t recommend the refinance to anyone unless they get to the same situation I was in.
My mortgage payment still isn’t “huge”. It is $500 more than I paid before, but the old mortgage didn’t pay my insurance or real estate taxes. Those were always due in big payments at the end of the year, but now will be in the monthly payment. They are responsible for almost $200 of the increase, so that’s not really an increase since I would have paid that amount eventually anyway. That means my mortgage really only increased by $300 and my monthly required payments decreased by over $1000 each month.