The Penny Hoarder's Sr. Editor, Robin Hartill (AKA Dear Penny), hosted a LIVE Q&A from January 13th - January 17th.  During that week she answered member questions about credit card debt.  Take a read through the topics below for great conversations and tips to help you navigate the world of credit card debt! 

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!

Original Post

Hey @MoneyMartin! Congrats on getting to debt-free!

If your credit scores are listed as N/A, it just means the bureaus don't have recent enough information about you to calculate your scores. You aren't starting from scratch, per say. Your credit reports (which is what scores are based off of) will still include accounts closed in good standing within the past 10 years and any negative information from the past seven years.

But to get a credit score, you'll need to open an account that reports your payments to the credit bureaus. Probably the easiest thing to do is open a credit card, make one purchase every month and then pay off the full amount. (Get a secured one if you can't get a regular card for now.)

It usually takes about six months' worth of activity to re-establish your credit score. The key is to always keep some form of credit account open — just pay off the balance in full each month.

I have a commercial bldg that is for sale. I so wanted to see all $25,000 in debt paid off.  I would want a fresh start in another state and need better credit, references, etc. ready to jump right in to a new car, apt. and more.  It would happen FAST and I don't want to have high interest loans because I am now just below 600, terrific payment history. There are no car loans ever and my mortgage is a contract so it does not show up.  Tricky. 

Add Reply

Likes (1)
Brandi Pucek