# Benefits of a very high Credit Score



## clovis8 (Dec 7, 2010)

I have been researching credit scores getting ready to buy my first house and I am wondering if there really is a difference between high scores. I have a high score (824) and not sure if I can use it to leverage a better mortgage rate. 

Is there any difference between a 760 and an 824 for example, in terms of what I can expect for rates?


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## Mockingbird (Apr 29, 2009)

Very nice score, Clovis8.

I've read it somewhere that the best rate is offered to anyone over 760. However, this doesn't mean you'll get the absolute best rate, so shop around and/or negotiate with other factors (e.g. switching bank, signing up for other products like LOC and in-house brokerage, moving existing investments, etc). 

Or just use the mortgage broker to shop for you.

MB


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## Oldroe (Sep 18, 2009)

Good score means negotiate negotiate negotiate and they know you get accepted anywhere if you leave. Just the most fun!


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## ted2011 (Jun 1, 2011)

It certainly helped when I open an unsecured LOC with RBC a couple of years ago.


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## peterk (May 16, 2010)

Slight threadjacking here - but I heard (through work hearsay) that one way to keep your credit score high is to carry a slight balance on your credit card each month. So say you owed $500 on your upcoming statement, you pay $490 off and carry 10. You'd have to pay interest on the $10, but the sacrifice would raise you credit score.
Is there any truth to this?


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## Plugging Along (Jan 3, 2011)

^ No. I have a very high credit score and have not every needed to have a balance to get this score. What they mean is that if you buy $100, that you don't pay it off BEFORE the statement comes out, because then it doesn't register on your statement that your were able to pay off a balance. If you pay off the full amount AFTER the statement date, but BEFORE or on the due date, it is the same.


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## eddyo (Oct 28, 2009)

peterk said:


> Slight threadjacking here - but I heard (through work hearsay) that one way to keep your credit score high is to carry a slight balance on your credit card each month. So say you owed $500 on your upcoming statement, you pay $490 off and carry 10. You'd have to pay interest on the $10, but the sacrifice would raise you credit score.
> Is there any truth to this?


If you do not pay your statement if FULL each month, you pay interest on the whole amount.

Statement= $500 Payment= $500 ballance=$0 Interest= $0
Statement= $500 Payment= $490 ballance=$10 Interest= on $500

Or alteast thats how my CC works.


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## DavidJD (Sep 27, 2009)

I understand that using credit responsibly is what increases your score...

Having credit but not using it ALL.
Using lots of credit but paying it down aggressively.
Borrowing less than you need and for short terms.
You net worth actually increasing.

This is what I was told and believed but haven't a clue how these are measured or assigned a value for a score.

I think AVOIDING the things that kill a score is more beneficial, no bounced cheques, overdraft, late credit card payments, etc.


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## HaroldCrump (Jun 10, 2009)

eddyo said:


> If you do not pay your statement if FULL each month, you pay interest on the whole amount.


No way...are you sure?
I don't think they can legally charge interest on amount you have paid off.
I've never heard of this.


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## peterk (May 16, 2010)

eddyo - I was under the impression that rule changed a year or two back. Wasn't there some new credit/bank legislature that banned that practice. As I recall the rule was that if you didn't pay in full by the due date then any expenses incurred in your next month would be charged interest immediately without the grace period.

I thought this practice had been banned - perhaps I was just having a pleasant dream though...

Thanks all. As usual, I find about 80% of all office lunchroom financial talk to be incorrect.


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## marina628 (Dec 14, 2010)

I can only share my own experience but i experienced a big drop in fico when i close a $192,000 credit line in 2009 .My mortgage specialist at td bank told me to use my existing credit cards every month but not to exceed 20% of my credit line and to pay them off in full.Since doing this my fico has returned and actually went up another 45 .She told me if you do not use them at all you may lose points as the credit card companies wont report for you so always put at least 1 transaction a month through them.


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## eddyo (Oct 28, 2009)

HaroldCrump said:


> No way...are you sure?
> I don't think they can legally charge interest on amount you have paid off.
> I've never heard of this.


I went throught this with my CC company earlier this year...

I had a balance of a few thousand doallars and paid most of it off expect for a few hundred dollars. The next month I got a bill for over $50 in interest charges. I called them up and they told me that if the account balance is not paid in full they charge interst on the full amount. It's in my CC agreement docs as well.


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