I recently just paid off all my debt and have no credit card accounts open. Does this mean my credit score will start anew or start where I left off once I open a new account/get a loan/etc.? Credit score sites currently say N/A regarding my current score with no elaboration which is ambiguous in my opinion. If someone could share their personal experience or their expertise it would be greatly appreciated. Thank you in advance!
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I have no personal experience with this but I have to say that it seems very odd! I know people that have no score because they have never had a credit history, but you have. I would think that your score is your score, and that maybe it would decrease now that you have no open lines of credit…but it seems odd that it would just disappear altogether.
Sorry no answer for you, but I would suggest that you call the credit agency/ies if a score doesn’t show up shortly.
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in my opinion Credit Report and Credit Score is used to check credit worthiness of a person. Credit score is based on the data provided by the credit report that indicates payment history, accounts, etc. Today many lenders and retailers take the help of credit report and credit score to lend credit. Credit report and credit score helps the bank lenders to judge the credit worthiness of a person at the time of allotting him credit.
I would contact one of the big three credit services or got to freecreditreport.com and get your actual credit report. Even if you have paid off and closed your loan accounts, you should still have a credit history and therefore a credit score (I would think) associated with your social security number.
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Thank you all for the replies. Beckles that was my next step but I just wanted some substance from the pennyhoarder community to see if any similar issues had risen in people’s experiences.
MoneyMartin posted:
I recently just paid off all my debt and have no credit card accounts open. Does this mean my credit score will start anew or start where I left off once I open a new account/get a loan/etc.? Credit score sites currently say N/A regarding my current score with no elaboration which is ambiguous in my opinion. If someone could share their personal experience or their expertise it would be greatly appreciated. Thank you in advance!
What sites are you using? Credit Karma had me at low sixes, but when we went to get a house my lender put me in the 780 range. She said that Credit Karma and other sites don’t take into account the TYPES of debt you have out, and that each scores differently on a credit report.
Other sites may not be able to verify you because you’ve got a lack of open debt to verify you with. For example, to prove your identity they ask you about a car note that you have. One doesn’t exist. So you’d flunk identity verification.
When it REALLY matters is when you go to obtain credit. A lender will then do a hard pull on a credit report and look to see what you have outstanding.
If you’re that worried about it, get a secured credit card and use it every month. You can’t go hog wild running it up and it shows credit activity. I’d be more worried if you had derogatory items showing on your report, or if you were overextended in debt.
Credit Karma is the sole website that I use. I didn’t perceive it as worrisome just caught off guard because I’ve never heard of such a thing. I have been contemplating on a secured credit card and it seems like the best choice for my situation. Yes a secured credit card sounds like a good idea after I did some research. I will open one and pay off the monthly payment in full each time. Thank you for the response, it was taken into great consideration!
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I too am debt free. My score now is around 810. We paid off our house a couple years ago. I do use a credit card occasionally for rental cars or plane flights. But I pay everything off every month.
If you never use credit again, your score will eventually go to Zero. Dave Ramsey says that’s a worthwhile goal. I’m not so sure about that. I’ll stay where I’m at.
Congrats on being debt free! That is really weird that the credit bureaus report you as N/A. As I understand debts on credit reports, I was told that they can stay on your report for up to 7 years from when they were first reported.
Not having any line of credit or a thin credit file isn’t a good thing. Lenders will reject you for credit, mortgage loan, a reg loan, etc. As @annieb suggested a secured credit card is a good choice. I recommend you research the secured credit cards first before applying.
Also too, a credit builder loan is a good option too. Credit builder loans work like this, you agree to pay x amount for x amount of months. The credit builder company puts the loan amount in an account earning interest(unfortunately the credit builder company keeps the interest). At the end of your agreement you get the loan money in a lump sum. Credit builder loans report to all 3 credit bureaus, consistent on time payments help your score up and most have an app to view your credit score.
Another option is Experian’s Experian Boost, it’s free(for now at least). Experian Boost uses your gas & electric bill, cable/internet bill, cell phone/home phone bill, etc. to help boost your score for free!! All you need is 3 months worth of consecutive payments. And Experian is accessible on the web or an app.
I hope this helps you out. I’m NOT a financial adviser. I’m just an ordinary guy trying to repair my credit from a fabulous disaster. The info I’ve shared is from my personal hands on experience. My hope is that it may help someone.
Sincerely, Prince Alarming
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