home, mortgage, personal finance

From Good to Excellent Credit Score?

It’s done! My wife and I are now debt free, except for our mortgage. We paid off all of our credit card debt today.

The reason we kept our credit card debt around is because we had zero-percent-interest balance transfers. The reason we are paying our full balances now is because the “teaser” interest rates are expiring. One of my financial goals is to never pay interest on a credit card!  I consider paying 18% interest to be financial insanity — something to be avoided by careful planning and financial discipline.

Now begins a waiting game to see what affect eliminating our credit card balances has on our credit scores. It will probably take 2-3 weeks for our new zero balances to get reported to the credit reporting agencies.

I do weekly credit score monitoring and my estimated credit score is 752.  The credit monitoring sites I use also have credit score simulators. One predicts my score will improve to 805, the other expects no change. I suspect that my credit score will bump up to 765 or so. Either way I’m betting my wife’s credit score will continue to jump ahead of mine. The credit rating agencies and credit rating algorithms seem to just like her better for some reason… even though our credit reports are very similar.

According to some sites 740 is already an excellent credit score, while others say 750, and a handful say 770. Because I’m a bit of a perfectionist I’m trying to achieve a credit score of at least 770.

Credit and Mortgages

I went several years living in a modest house with no mortgage. It is amazing how rich you feel when you have no rent and no mortgage! My credit score went down moderately; I seems that credit scoring agencies prefer you to have a mortgage in the mix.

Then I got married, and my wife wanted a nicer house. Boom, a new bigger house and a new mortgage.  I won’t whine too much. The new house is more comfortable and easier to maintain. And the 3% interest rate on the mortgage is hard to beat.

It was an act of will to do all of the financial transactions to get “debt free.” I was was easy to procrastinate and hard to see thousands of dollars “vanish” with a few key strokes and mouse clicks. In exchange for the vanishing money is vanishing debt. The trick now is to stay “debt free.” That will be a joint effort for my wife and me.  I’m pretty sure we can do it.


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