Tips on handling credit cards

kelley198721 · September 2014

Hi all, my fiance and I are looking to buy a house in a couple years. However, I know that it takes a long time to build up credit and for it to improve. My credit score is okay but it definitely needs some improvement. I made some stupid mistakes as a teenager and now as an adult, I'm trying to repair my credit. To do that, I have been paying my car payments on time and in full. Same for my student loans. But I am making progress! According to Credit Karma, my score went up 9 points the other day to 623. Yay!

As for my fiance, the only credit he has ever had is a small line of credit on his car. He took out the line of credit last year with the help of his mom. It's only about $2,000 that he owes on his car.

So we decided to apply for a credit card in his name only. I can't apply for a credit card in my name because I have a judgment from 2009 on my credit report. I've been making payments to a lawyer to get rid of the judgment. I only have about $800 left on the judgment. Hopefully it will be paid off completely next year when I get my tax refund. Another reason why I can't apply for a credit card in my name is because when I was car shopping last year, it put a lot of hard credit inquiries on my report. Yikes.

Anyway, we just applied online for my fiance to get a Capital One Platinum card. He was already pre-qualified for it so we thought why not apply. But we'll have to wait to find out if he got approved or not via snail mail.

Well, my fiance has no experience with credit cards so he was very taken aback about the high interest rate. I think the card had like 24% APR. I tried to tell him that this is normal APR for people with limited credit history like he has. He said he would trust me but I think he is still a tad uneasy about it. I also told him that the way to avoid paying that high APR is to pay off your balance in full every month.

What are some other tips that I can tell him about credit cards to make him feel better about the idea? We really want to buy a house in a few years so I really want us to start working on our credit now and get it in tip-top shape.

One tip that I can think of is to always keep your balance under 30% of your credit limit. Is that accurate?

Are there any other tips or tricks that y'all can give me to handle his credit card responsibly? I just want to be smart with our credit from here on out. Thanks!

CuriousKiddosMama · September 2014

You don't need credit to buy a house. Your fiancé doesn't need to open up a card if he doesn't want to. If he pays rent, utilities, etc on time that will show that he can handle payments. You may need to look around to find an underwriter for a loan as aupposed to some banks which pretty much just look at your score, but you don't need to open a card for that. Look at Dave Ramsey and check out what he has to say on this issue.
Having said that- if he has a card, he needs to pay it off every month to avoid the ape. Also make sure there are no yearly fees for the card.

Sisugal · September 2014

Do do NOT have to carry a balance on the card to build credit. You need to use no more than 15% of the allowable limit - and PAY IT OFF IN FULL EVERY MONTH>
That will build credit - AND you will not pay any interest when you pay it in full.

I recommend using it for only gas or some other regular expense - and pay in full.

Many credit unions will use regular, timely payments of utilities, rent, car payments for a home loan along with SAVINGS on hand - that will remain in the account after closing.

Read House Buying for Dummies
Mortgages for Dummies

Wait until you are married - and financially ready before buying. (Being married gives more legal protections)

Xstatic3333 · September 2014

I would just absolutely commit to paying it off each month. Holding a balance is not an option. Start maybe using it just for gas once a month or something. Then, if you get more comfortable with cards later you could use a reward card for points, but only if you NEVER carry a balance.

For me, a lot of my CC debt came about because all of my friends were talking about charging things, dealing with it later, CC bills, etc. and I came think it was normal. Just resist the urge to fall into that trap.

RosieC18 · September 2014

Also beware - part of your credit score is the average age of your lines of credit, so opening a new one (especially if you don't have many) may hurt your score. That will probably be outweighed by having a higher amount of credit available to you, but it will cut into the gain.

Erikan73 · September 2014

To help my husbands he only puts gas & haircuts on his credit card and I put money aside from our paychecks for that so when the bill comes, we have the cash. I would limit it to that maybe until you get more comfortable.

brij2006 · September 2014

vikingsfan711 said:

You don't need credit to buy a house. Your fiancé doesn't need to open up a card if he doesn't want to. If he pays rent, utilities, etc on time that will show that he can handle payments. You may need to look around to find an underwriter for a loan as aupposed to some banks which pretty much just look at your score, but you don't need to open a card for that. Look at Dave Ramsey and check out what he has to say on this issue. Having said that- if he has a card, he needs to pay it off every month to avoid the ape. Also make sure there are no yearly fees for the card.

This. You do not need a credit score in order to buy a home. What you need is to pay your current debts off, then save up a 20% down payment. Then you don't have to worry about playing the "how can I make FICO affect my life" game.

Xstatic3333 · September 2014

brij2006 said:

vikingsfan711 said:

You don't need credit to buy a house. Your fiancé doesn't need to open up a card if he doesn't want to. If he pays rent, utilities, etc on time that will show that he can handle payments. You may need to look around to find an underwriter for a loan as aupposed to some banks which pretty much just look at your score, but you don't need to open a card for that. Look at Dave Ramsey and check out what he has to say on this issue.
Having said that- if he has a card, he needs to pay it off every month to avoid the ape. Also make sure there are no yearly fees for the card.

This. You do not need a credit score in order to buy a home. What you need is to pay your current debts off, then save up a 20% down payment. Then you don't have to worry about playing the "how can I make FICO affect my life" game.

My concern is that it may be too late for OP and her SO to have no credit score. I know DR says that no credit is workable, but bad credit isn't. You guys know more about this than I do, but could her SO drop back down to no credit in a couple of years if he already has a car loan?

hoffse · September 2014

I have lots of credit cards, but we work them for points/rewards. And I like the consumer protection aspects of them. There are stronger consumer protection laws for credit cards than debit cards. I'm also really hinky about giving any business a direct link to my bank account through my debit card. No thanks.

But that said, I'll ditto what PPs said. A credit card should never be used as a loan. It's one of the worst deals you can get if you are using it to borrow money. As you stated, the interest rates are very high. And guess what - they stay high even if you have a really high credit score. H and I both have credit scores over 780 and the interest rates on our credit cards have virtually no relationship to our credit score.

If you use cards, you have to be responsible enough to track what you are spending and pay it off in full. H and I pay off all of our cards once a month during the grace period after our billing cycle closes. Some people prefer to pay off cards once a week or even every time they make a purchase. I check our cards every day to help with budgeting, so I'm never surprised by what our credit card bill is, and as long as it's paid before the grace period is over we are never charged interest or a fee. The grace period is the 20-30 day payment window after your 30 or 31 day billing cycle has closed. You just have to ignore the big "YOUR MINIMUM PAYMENT IS $25" thing at the top of the bill. If you've spent $1,000 on your card that month you need to pay them $1,000 - not $25.

I think the hardest thing about credit cards when you are first getting started is keeping track of cash flow. If you think about it, when you pay with a debit card or cash, you are paying the merchant immediately, and the money is gone that day. When you pay with a credit card you can charge things weeks before you actually earn that money to pay off the card. When you pay once a month like H and I do, it's important to keep track of your cash flow to make sure you aren't over-spending before you ever get paid. For instance, we have two credit cards that close today. Starting tomorrow we will be spending "October money," and anything we buy with those cards won't be paid off until the END of October even though it's early September. So we just have to be on top of that. It's not very hard as long as you are aware of it... I just think that many people who run into credit card issues aren't thinking about it from the cash flow perspective.

hoffse · September 2014

One other tip - after you get your first month's statement, make a note of what the "minimum" payment is. Usually it's between $15-$35. That is the amount that you MUST pay them every month (unless your entire balance is less than the minimum amount). If you don't pay at least the minimum amount, then they start charging fees on top of interest, and they can tank your credit.

I have an auto-pay set up on my bank's bill pay website to make sure that every month, no matter what, my bank automatically sends at least the minimum payment to my credit cards. Once the credit cards close for the month I always go into my bank's bill pay website and edit those payments to be equal to the entire balance I owe that month... but I have the minimums on auto-pay so that I'm covered in case I just completely lose track of something one month or I accidentally send in a payment late. I might be charged interest in that case, but I won't have my credit affected.

Once you get a sense of how much you nearly always spend on that card you can adjust those auto-pay amounts higher. For instance, I know we always spend at least $150 on our gas credit card. So I have $150 set up on autopay for our gas card. We have also never spent less than $500 any given month on our Fidelity card because we use it for our utilities, insurance, prescriptions, and groceries (and other general spending). So that card has a $500 auto-pay. That way if I forget to pay those cards or I'm a couple days late, I'm not being charged interest on that first $150 or $500 respectively. But watch it for a few months before you set auto-pay to be higher than the minimum. For the cards I use less frequently I just stick to the minimum on my auto-pay.

Note: If you do not spend any money on your card that month, you can usually opt to "skip" an auto-payment for one month. This will depend on the bank you use, but I think it's a fairly standard feature on most (all?) bank bill pay websites.

brij2006 · September 2014

Xstatic3333 said:

vikingsfan711 said:

You don't need credit to buy a house. Your fiancé doesn't need to open up a card if he doesn't want to. If he pays rent, utilities, etc on time that will show that he can handle payments. You may need to look around to find an underwriter for a loan as aupposed to some banks which pretty much just look at your score, but you don't need to open a card for that. Look at Dave Ramsey and check out what he has to say on this issue. Having said that- if he has a card, he needs to pay it off every month to avoid the ape. Also make sure there are no yearly fees for the card.

This. You do not need a credit score in order to buy a home. What you need is to pay your current debts off, then save up a 20% down payment. Then you don't have to worry about playing the "how can I make FICO affect my life" game.
My concern is that it may be too late for OP and her SO to have no credit score. I know DR says that no credit is workable, but bad credit isn't. You guys know more about this than I do, but could her SO drop back down to no credit in a couple of years if he already has a car loan?

Actually, if he were to pay the car loan off today, it would only take about 6 months for him to go back to no credit.

The reasoning to his "no credit mortgage" is that you are buying a home when you can afford it. When all of your debts are paid and you have a 20% down payment. So if they were to work at all of her debts over the next 2-4 years and get them all paid off, then she would join the "no credit" group about 6 months later. Then her prior "bad credit" wouldn't matter.

Vikingsfan is correct in that it will take manual underwriting. However, anyone manually writing a mortgage for someone who has been disciplined and paid off all of their debt within a few years, and saved up a 20% down payment, is going to get approved for a mortgage no matter what FICO says they've done with their money.

If they play the FICO credit score game, then it's all about playing the system correctly for what could be 2-4 years to get her credit score up. Instead they would have been better off paying off all of the debts and saving up a large down payment. Then their FICO score doesn't mean anything.

hoffse · September 2014

I personally think it's important to maintain a good credit score. When you're borrowing 80% of your downpayment the lenders have a right to know whether you are a credit risk or not. You don't have a right to the bank's money without adequate vetting.

The FICO score just makes vetting easier. You can go through manual underwriting if you want... But it's going to be huge a pain. All you have to do to maintain a good score is pay your bills in full and on time. That's something you should be doing anyway.

I understand where the anti-FICO folks are coming from. But I mean... most of the source of that is actually bad credit card/loan usage. And I think there's a fear that the emphasis on maintaining a good FICO score means that people who are irresponsible are applying for credit cards. I think that's probably true.

I also think that developing a relationship with money where you really aren't tempted by high credit limits is more constructive than trying to stick it to FICO. I mean... H and I have something like $60,000 per month available to us on credit cards (or more? I don't know). We spend maybe $2,000 of it, and we put everything we can on a credit card to get points. We've never been tempted to spend more because we know that we have to pay it off in full. Having good credit habits means you have the benefits of credit cards (consumer protection, points, etc), a good FICO score, and you aren't up to your eyeballs with credit card debt. I just think that FICO is not the problem - a lack of self control with credit cards is the problem.

Finally, everybody should be checking their credit reports at least once a year, whether you want to play the FICO game or not. Think about the number of times you've filled out your SSN on a form and handed it to a person you don't know on the other side of a desk. Doctors, lawyers, government workers, college admissions people, even teachers and school testing people... all of these people and their staff have access to your SSN, legal name, DOB, address, etc. It's important to make sure these people haven't stolen your identity and taken out unauthorized credit in your name.

brij2006 · September 2014

I will add to the FICO score part of this.

We used to always use our CC's on a daily basis for purchases to build our credit. We have since stopped using any CC's at all, and are focusing on paying off the debt. Our credit scores were in the low 800's in January, and we had a lot of debt. Since starting this plan, we have paid off quite a bit in student loans and a car loan. I checked our credit scores last month, and they were in the 840's. Our credit never ever would have jumped that high, that quickly, just by using our CC's.

So focusing on making your debt to line of credit ratio better seems to help more than establishing a good record with a CC company.

strickland8052 · September 2014

My main advice is to find a card with the best rewards (I prefer cash back, but you may like sky miles). Use that card for no more than 15% of the limit and pay it off in full every month. Think of the card EXACTLY as you would think of a debit card. If there is not enough money in the account, it doesn't get purchased. If you wouldn't have bought it with a debit card, don't buy it with a CC card.

If you use your CC that way and you are responsible about paying it off every month on time, it will not matter what your interest rate or credit limit is... its all about those rewards, in my opinion!

Finally, I don't quite understand why just your fiance has to be on the CC. I would maybe try to find a card that you could qualify for also, even if it means H co-signing with you or going through a credit union. Your name is going to have to be on that mortgage if you are married or if your fiance needs your income to pay for the mortgage. You might as well get your name on a CC too.

hoffse · September 2014

strickland8052 said:

My main advice is to find a card with the best rewards (I prefer cash back, but you may like sky miles). Use that card for no more than 15% of the limit and pay it off in full every month. Think of the card EXACTLY as you would think of a debit card. If there is not enough money in the account, it doesn't get purchased. If you wouldn't have bought it with a debit card, don't buy it with a CC card.

If you use your CC that way and you are responsible about paying it off every month on time, it will not matter what your interest rate or credit limit is... its all about those rewards, in my opinion!

Finally, I don't quite understand why just your fiance has to be on the CC. I would maybe try to find a card that you could qualify for also, even if it means H co-signing with you or going through a credit union. Your name is going to have to be on that mortgage if you are married or if your fiance needs your income to pay for the mortgage. You might as well get your name on a CC too.

I agree with most of this, especially the bolded.

I'm not going to lie - I love the credit card rewards, and they're an excellent incentive to stay on the straight and narrow with credit card usage. You only get points for what you pay off, so it's a huge incentive to pay off the entire bill in full each month. We accrue over $1,000 per year in cash back when you add it all up. We don't go out of our way to spend money just to get points - we would be buying all those things anyway. And frankly, I don't want to leave those points on the table if the money is going to be spent either way.

And Brij is also right that your credit score is not entirely based on credit cards, and you can have a great credit score without them. But if you're going to use credit cards, then do so responsibly and be smart about which ones you apply for. Some cards have better rewards than others.

Another suggestion - when it comes time to apply for the mortgage see what rates you get both with and without your income/credit score included. It ended up making no difference for us because our credit scores were super close to each other, but our guy ran the numbers using just me, just H, and both of us to find the best interest rate. We were purchasing a house that we could afford on one income, so that gave us the flexibility to look at all three options. Buying a house you can afford on a single income was the best choice we've made in ages, by the way. I have this board to thank for talking me into it. We were looking at houses that were a lot more expensive and would have taken both our incomes, but we ultimately held out for the right house in the right price. Now we aren't stretched, and it feels amazing. No regrets, whatsoever.

Sisugal · September 2014

Definitely do NOT have your name on FI's CC. Once you are married, then add your name as an authorized user, but not until then.

brij2006 · September 2014

Sisugal said:

Definitely do NOT have your name on FI's CC. Once you are married, then add your name as an authorized user, but not until then.

Yes!

Everything is separate until there's a marriage license saying otherwise.

Xstatic3333 · September 2014

Sisugal said:
Definitely do NOT have your name on FI's CC. Once you are married, then add your name as an authorized user, but not until then.

I'll also agree with this. A good friend of mine just got stuck with $2000 to pay off after a bad breakup. The good news is that being added as an authorized user may help your credit post-wedding. It helped my H when I added him. Not sure it would help in all cases though, so proceed with caution.

hoffse · September 2014

Wow reading fail on my part. Definitely don't commingle until after the wedding. Once the wedding is over you can start looking at this more seriously.

kelley198721 · September 2014

Hi everyone, I just wanted to post an update. My FI has been approved for the credit card and he received it in the mail last week. So far he has been using it for gas and lunches at work. So far so good. My FI and I are both really determined to be responsible with the credit card and to pay off the balance in full every month.

I also wanted to clarify that FI and I will NOT be buying a house until we are married. All we are doing now is trying to get ourselves ready to buy a house after we are married. Our wedding date is tentatively set for October 2015 and we plan on living in an apartment for a year. Then hopefully buy a house once the lease is up. So we are looking at buying a house as early as October 2016 if everything goes according to plan.

Also, I think Dave Ramsey has some good ideas but I am not a follower. I think his no credit thing is extreme. At least for me. I'm in the camp that as long as you use credit cards responsibly then there's nothing wrong with using credit to buy a house. Along with a down payment, of course

kelley198721 · September 2014

My iPad wouldn't let me finish my last post so here goes. Anyway, I did have one last question for you ladies. I'm not sure where I heard this from so it's probably not accurate but if you pay off the card really early every month, does that show that you never use your credit card? Like if you pay off the card every time you make a purchase instead of waiting until the bill is due.

I want FI's credit report to show that he can make payments on time and in full. Which reminds me, PPs had mentioned that rent and utilities would be looked at as far as payment history. Which is true but right now, FI is living with his parents in order to save more money for the wedding and for the down payment on a house. I am living with my great-aunt to do the same thing. FI's parents have told him not to worry on paying rent or utilities to them. They want him focused on saving up for a house. And my rent to my aunt is very low. There's not really a paper trail of me paying rent to her, I just pull out cash from the ATM every month to give to her. I should probably write checks instead but I would have to order some. Anyway, I'm getting off track here.

FI has lived in apartments before and so have I. But it has been a while. Two years for him and a year for me since we have had leases. And we plan on staying in our respective living situations until we get married to save up even more money. And once we try to buy a house, we will only have a year of recent rent history to show. I have no idea if that will make a difference.

Back to my original question. Sorry, I keep getting off track here. Anyway, which method is better for building credit? Paying off the credit card when you use it or waiting until the bill is due to pay it off?

hoffse · September 2014

kelley198721 said:

My iPad wouldn't let me finish my last post so here goes. Anyway, I did have one last question for you ladies. I'm not sure where I heard this from so it's probably not accurate but if you pay off the card really early every month, does that show that you never use your credit card? Like if you pay off the card every time you make a purchase instead of waiting until the bill is due.

I want FI's credit report to show that he can make payments on time and in full. Which reminds me, PPs had mentioned that rent and utilities would be looked at as far as payment history. Which is true but right now, FI is living with his parents in order to save more money for the wedding and for the down payment on a house. I am living with my great-aunt to do the same thing. FI's parents have told him not to worry on paying rent or utilities to them. They want him focused on saving up for a house. And my rent to my aunt is very low. There's not really a paper trail of me paying rent to her, I just pull out cash from the ATM every month to give to her. I should probably write checks instead but I would have to order some. Anyway, I'm getting off track here.

FI has lived in apartments before and so have I. But it has been a while. Two years for him and a year for me since we have had leases. And we plan on staying in our respective living situations until we get married to save up even more money. And once we try to buy a house, we will only have a year of recent rent history to show. I have no idea if that will make a difference.

Back to my original question. Sorry, I keep getting off track here. Anyway, which method is better for building credit? Paying off the credit card when you use it or waiting until the bill is due to pay it off?

It makes no difference as long as you aren't paying late.

CuriousKiddosMama · September 2014

Paying rent on time in the past would mean you already have a credit score. It takes I think 7 years for stuff to drop off your score, so your old rent payments would still be there. A year of new rent payment before you buy the house, along with utilities and everything else paid on time is probably enough to raise your credit score after a while of inactivity. But he already has the credit card, so hopefully he doesn't get into trouble with it.

Xstatic3333 · September 2014

vikingsfan711 said:

Paying rent on time in the past would mean you already have a credit score. It takes I think 7 years for stuff to drop off your score, so your old rent payments would still be there. A year of new rent payment before you buy the house, along with utilities and everything else paid on time is probably enough to raise your credit score after a while of inactivity. But he already has the credit card, so hopefully he doesn't get into trouble with it.

Stuck in the Box

Out of curiosity, I've never had rent or utilities show up on my credit report. Is that done differently in different states? I definitely think they SHOULD count, and not just if they're late or delinquent!

formerlyGDaisy09 · September 2014

Xstatic3333 said:

vikingsfan711 said:

Paying rent on time in the past would mean you already have a credit score. It takes I think 7 years for stuff to drop off your score, so your old rent payments would still be there. A year of new rent payment before you buy the house, along with utilities and everything else paid on time is probably enough to raise your credit score after a while of inactivity. But he already has the credit card, so hopefully he doesn't get into trouble with it.

Stuck in the Box

Out of curiosity, I've never had rent or utilities show up on my credit report. Is that done differently in different states? I definitely think they SHOULD count, and not just if they're late or delinquent!

I thought this too. I'm pretty sure my rent and utilities had no impact on my credit score (though I suppose there's potential for negative impact if you're delinquent)

Xstatic3333 · September 2014

Gdaisy09 said:

Xstatic3333 said:

vikingsfan711 said:

Paying rent on time in the past would mean you already have a credit score. It takes I think 7 years for stuff to drop off your score, so your old rent payments would still be there. A year of new rent payment before you buy the house, along with utilities and everything else paid on time is probably enough to raise your credit score after a while of inactivity. But he already has the credit card, so hopefully he doesn't get into trouble with it.

Stuck in the Box

Out of curiosity, I've never had rent or utilities show up on my credit report. Is that done differently in different states? I definitely think they SHOULD count, and not just if they're late or delinquent!

I thought this too. I'm pretty sure my rent and utilities had no impact on my credit score (though I suppose there's potential for negative impact if you're delinquent)

Cool, that's how so thought it worked. Maybe large apartment complexes report to credit bureaus good or bad. I only ever rented from smaller landlords.

Sisugal · September 2014

Rent, utilities are acceptable credit when dealing with a Credit Union - not always with a big bank.

MommyLiberty5013 · September 2014

kelley198721 said:

My iPad wouldn't let me finish my last post so here goes. Anyway, I did have one last question for you ladies. I'm not sure where I heard this from so it's probably not accurate but if you pay off the card really early every month, does that show that you never use your credit card? Like if you pay off the card every time you make a purchase instead of waiting until the bill is due.

I want FI's credit report to show that he can make payments on time and in full. Which reminds me, PPs had mentioned that rent and utilities would be looked at as far as payment history. Which is true but right now, FI is living with his parents in order to save more money for the wedding and for the down payment on a house. I am living with my great-aunt to do the same thing. FI's parents have told him not to worry on paying rent or utilities to them. They want him focused on saving up for a house. And my rent to my aunt is very low. There's not really a paper trail of me paying rent to her, I just pull out cash from the ATM every month to give to her. I should probably write checks instead but I would have to order some. Anyway, I'm getting off track here.

FI has lived in apartments before and so have I. But it has been a while. Two years for him and a year for me since we have had leases. And we plan on staying in our respective living situations until we get married to save up even more money. And once we try to buy a house, we will only have a year of recent rent history to show. I have no idea if that will make a difference.

Back to my original question. Sorry, I keep getting off track here. Anyway, which method is better for building credit? Paying off the credit card when you use it or waiting until the bill is due to pay it off?

Hi. You asked 2 good questions. I used to work in banking/underwriting/loan officer prior to being a SAHM.

1. I have seen and analyzed many full credit reports during loan processes/underwriting. If you pay off a CC in full each month, that history appears for anywhere from 24 to 36 months on a credit report. When a CC is paid on time, it reads as a "0" on the report for that month. If the card is late it reads, 30, 60, etc. So yes, if you pay on time - that history IS showing up. Your on time payment does not just disappear somewhere - it's recorded. So it does matter.

2. To build credit, as long as you are paying the CC off in full each month, it does not matter when you pay it (as long as it's on time) - when it's due or on a rolling basis after each purchase. It will be easier to pay it once per month, though for you because it's less to have to manage/remember. The statements take around 30ish days to cycle, so a pay-as-you-go method really is just a means of making you feel better - it has no bearing on the CC itself, your payment history or your FICO.

MommyLiberty5013 · September 2014

Xstatic3333 said:

vikingsfan711 said:

Paying rent on time in the past would mean you already have a credit score. It takes I think 7 years for stuff to drop off your score, so your old rent payments would still be there. A year of new rent payment before you buy the house, along with utilities and everything else paid on time is probably enough to raise your credit score after a while of inactivity. But he already has the credit card, so hopefully he doesn't get into trouble with it.

Stuck in the Box

Out of curiosity, I've never had rent or utilities show up on my credit report. Is that done differently in different states? I definitely think they SHOULD count, and not just if they're late or delinquent!

It's pretty standard that rent, utilities, and cell phones do not show up on credit reports across many states. I have worked in banks in VA, KY, and CO and I'm fairly certain that this is standard (I could be wrong maybe there are some "special" states that they do show up). They do show up when they are late/delinquent or charged-off AKA in collections.

It would be helpful if they did count. The reason they don't is that utilities, cell phones and rentals, are offering a good or service. They aren't specifically lending money like banks or CC companies are doing. Lenders turn to the credit reports for data from other lenders to specifically see how a customer is handling credit. Just credit.

Items that are slow pays or have gone to collections appear simply because the customer owes someone money. Unpaid taxes and medical bills also appear. So if a person can't keep a cell phone and gas company happy each month, why would a bank want to give out a $100k mortgage loan?

I was just thinking this through more. A probable reason rent, utilities and cell phones in good standing don't count toward credit is the crazy number of accounts the companies would have to maintain and report on. In our household we have 4 utilities and then a cell plan. So five things...how many households are there in the U.S.? That's an astronomical amount of data to collect and report every.single.month.

Tips on handling credit cards

Re: Tips on handling credit cards

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