On the Use of Credit (?
Question: It sounds like you’ve misunderstood what I was saying. I said very clearly that you should pay your balances off in full every month. But, the higher balance you’ve had, the better it looks. For example, if I had
Answer: Oh dear oh dear, I was *not* advocating what I was describing, far from it!!! The point I was trying to make was that these people had EXCELLENT credit ratings because they consistently paid off their huge credit card balances in full, not every month, but about every 8 months to a year. And they did that by refinancing their mortgage… Foolish, foolish, foolish, as you pointed out and which point I was also trying to make. I guess I was just trying to say that there are smart ways to establish a good credit rating – but the way I described sure is NOT one of them!!! And also that a good credit rating doesn’t mean a person is smart with money. My own credit rating is spotty at best but that doesn’t mean I’m a bad credit risk, although the banks probably think so. I’m working on clearing up that bad history and proving I’ve learned my lesson. Whereas these folks had an excellent credit rating but I wouldn’t lend them a dime, since I knew how they “managed” money. (And for the record, I am not talking about one specific couple; over the years I saw several different individuals who were equally foolish, and it always ended up in bankruptcy, receivership and/or powers of sale.)
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