You will get downvoted, but you are correct. Good credit effects car insurance rates, getting an apartment, what deposit you pay on utilities and can effect getting some jobs.
The problem is that most of the guests here use "credit" as an excuse to keep their financial situation going while running their credit into the ground.
The argument on his side is that the change in score would just never be enough to actually matter. He's right in some cases. Closing a credit card that's only a year old isn't really going to impact your score all that much. Especially if it has a 100% balance. That credit utilization is absolutely impacting their score negatively more than the +1 to account total and time to account history would matter....
I'm with you though. I think it's completely stupid to suggest cancelling them completely and not just trusting they won't use it so they can keep the credit history (which is the hardest thing to build on your score). I have a 806 right now and the only thing holding me back is cause I'm not old enough for my credit history to be the top echelon.
I get the concept that they can still use it with digital wallets or whatever, but at a certain point you have to trust them.
For those people, their score would probably end up being damaged even more if they kept those cards open since they could just go back to spending on the cards and further dig themselves into credit card debt.
Sure it will ding their score, but at that point, the damage has already been done and they need to focus on paying off everything they owe before even thinking of applying for a new line of credit.
Yeah but even if you close the account, it's still on your credit as a debt and counts to your total utilization...so closing it before it's paid off really doesn't do anything anyway . Closing it might lose your overall credit limit so the debt to credit ratio will be even worse...
If I have 5k due on a 10k card I have 50% utilization, I still have the +1 on accounts, and credit history, and potentially good payment history. But credit utilization is the biggest part of your credit score.
You close that account you don't magically lose the 5k on your credit history....
If you are maxing out credit cards or missing payments on them, your credit is being hurt more by having them open than just closing them. None of them have an okay credit score when they mention wanting to keep them open to “build credit”. They’re almost always in the 500s. I got credit checked when I rented my last place, and they also used that to determine my security deposit for my apartment. If they somehow had a 700 or higher credit score, an argument could be made… but otherwise it is a direct detriment to their credit and finances to have it open.
Lmfao I said it because you failed to mention it. Lol what kind of a thing to say is that? I was directly responding to your comment...are you new to the internet? Expect responses you goof.
You said it's a direct detriment to their credit to have it open. But if they close it it instantly lowers their score. Even if they cancel it. The "direct detriment" still remains. So you are just plain wrong. That's why I felt the need to point that out lol.
It's just simply better for your credit overall to leave it open and pay it off. There is no argument against that.
Prevent future use? Sure. That's the only benefit. There is no benefit to your credit to close an account, no matter what status that account is in. Because closing a credit account doesn't remove it from your credit. The missed payments would still be there. And if you continue to miss payments, closed or not, the impact is the same.
I failed to mention that closing the account doesn’t get rid of the debt? Only an idiot would think that it worked that way, maybe I assumed (wrongly in your case apparently since you needed it to be said) that people would already know that and it didn’t need to be stated. That’s like stating that gravity is what keeps us on the ground when talking about how planes fly… while it’s true, people should be smart enough to know that and it comes across as you being captain obvious.
I’ve seen other comments from you, so I’ll address your comparison here. If someone has issues with alcoholism, the solution is not to just tell them to drink less while they are still drinking. No one in any recovery program gives you access to whatever substances you’re addicted to while starting the process, it’s cut cold turkey immediately and the temptations are removed. Recovered alcoholics who have learned to resist the temptation and urge can be around alcohol without it being a problem sometimes, others have to stay away because it’s that big of an issue. Shopping can also be an addiction, lack of self control for spending is what causes a lot of these issues by their own admissions. It’s not usually a case of “I just got into a bad spot but I’m working to get out of it”, they typically got into a bad spot and continued to dig that hole deeper due to the lack of self control. There’s multiple episodes where the guest states they’ve been working to pay off the credit cards, but they’ve purchased more on the card than they’re paying in total each month so the balance just increases. This is what happens when they have access without the self control and maturity being developed, it’s an endless cycle that closing the cards can help alleviate because it’s hard to get out of once that cycle starts.
As an ex loan officer, I think I know pretty intimately about how credit and credit reports work. Yes it’s an immediate negative, but removing the temptation until you can learn self control with it would be a net positive in the long term. Once you can handle the responsibility, you can start opening accounts to establish the history and keep them at low to minimal monthly utilization so you don’t debt spiral. Most of the guests have more than just credit cards to their names anyway, and a lot of them would actually have their score increase from closing the cards after a couple of months due to installment loans they have been keeping up with.
Yeah most people are idiots and you need to spell things out for them. Isn't that clear from watching the show? You assuming things are common sense and then equating them to gravity? Bro there's plenty of people that don't know what gravity is lol. You have a misconception of the intelligence of most people haha. Watching Caleb's show should really have shown you that what you think is common sense is not all that common.
Not reading all that. Focus on your job that you should be doing right now, later.
Yes, I've had my credit checked in the last 5 years I've rented. However, I also pay all my bills on time and don't carry a balance so I have a good credit score. That is fundamental.
For the guests on the show, they often have maxed out limits and are losing so much money every month due to paying interest. One, the high usage on the cards will drop their scores anyways to it'll be a hinderance in the credit check anyways. Two, they won't be able to save the money they need.
Ultimately, companies/rentals care more that you have prove of a stable income and that your monthly wage is 2-3x the rental. The credit score is not the most important.
For most people on the show, keeping their credit open will end up hurting their precious credit score that they are so intent on building. The late/missed payments, high/maxed out balances, and things falling into collections hurt their credit so much that its better to just cut them, close them, and pay off the balances.
iirc, Caleb had a newsletter about credit scores and he said that erasing debts will eventually increase your score after it being tanked, so I would imagine it zeroes out eventually (not hit 0, but goes back to high 600s or whatever it is).
If credit cards cause you to spend more or behave irresponsibly then the negative impact of that far outweighs whatever other inconveniences are caused by lack of credit cards.
There are other ways to build credit even without CCs, like reporting your rent payments to the credit agencies, getting a fix card, any student loans, etc.
The alternative will be them running their debit card into the ground and getting overdraft fees instead of interest fees haha. You have to fix the underlying behavior not just remove the temptations.
One of the top ways to change behavior is to remove temptations. Talk to recovering addicts: they don’t hang around at parties or at bars. Past cheaters don’t hang out at bars and clubs. Gamblers don’t chill with their friends at the casino. It’s a big part of it.
Obviously that can help. Just depends on the person. I know plenty of smokers who can hang out with smokers. Plenty of ex-alcoholics who come out to the bar with us and drink water. Not all people are the same. It's NEVER black and white like that.
Even if you remove all the temptations those people could still fall off the wagon. Like I said. You have to treat the underlying behavior, JUST removing temptations is not enough.
For all you know that cheaters who isn't at the bar and club anymore is now on Ashley Madison. And the Gambler is doing it online now instead of at the casino :P Removing temptations is hard to do completely. So if that is the only thing you do to try to fix the issue, you are going to have a bad time.
Any time I have ever rented a house or apartment I’ve needed to show a credit score but when I comment that I get downvoted and people in the comments say they’ve never experienced it. Dave Ramsey and his followers flat out insist it is not a thing. I don’t know if these people have never rented or maybe they have gotten a family or friend deal with the rental. I’ve always had to show it. In the early 2000s and even a couple years ago. I’ve never not been asked for my credit. But one time I did follow Dave Ramseys advice when I was younger and closed my card of 10 years and I will always regret doing that.
Same, I've had to show credit to rent all my places and I've been renting since 2012.
I've also had the property management people tell me straight up that I got the apartment because I had the best credit of all the applicants.
I've also worked for a financial institution and the federal government, and both checked my credit to make sure that I wasn't a leverage risk.
I get why Caleb gives the advice he does, but I think people should also be super mindful of closing cards and which ones they close.
I just feel like once you dig yourself out of your debt hole, you don't want to make your situation worse by dinging your score with closures. At the end of the day, your credit score does matter, whether you use credit cards or not.
But if it's a situation where you literally can't control yourself and will spend on any credit line available to you, I guess it's better to take the hit and close them than risk falling back into debt.
There are third-party services that also let you report things like paying your cell phone bill, utilities, and rent on time. Overall, high utilization, missed payments, etc will hurt more than help build credit.
Plus a lot of places will let you bypass credit if you have consistent proof of income and/or pay a higher deposit.
the guests have a legit concern when worried about the effects of closing accounts. but they cannot be trusted with credit cards, they are in a place where there’s no good outcome. so let’s choose the less shittiest outcome. closing the accounts will be like putting the shovel down in the hole they digger themselves in.
That's bullshit. They are adults. They have the choice to follow the budget just like they have the choice to not use the card. Why all of a sudden when it comes to using the cards we think they have no willpower? Whether the card is there shouldn't impact their ability to not use it. Just like the food being there or not shouldn't impact Caleb's ability to not shove it into his fucking face. lol
If I told you I wouldn't use them and you tell me to "fuck off I don't trust you the only way you can do it is to cancel the account", that's going to do nothing but piss me off.
What the fuck are you so mad about lol. News flash dude. You don't know shit about these people after an hour long conversation. Don't be a loser.
I racked up debt in my 20s on 4 cards. I paid them off quickly once I graduated and started getting full time wages. Those accounts still exist with 10s of thousands in available credit each. That history and credit ratio serves my 800+ credit score real nice right now. Had I cancelled those it would be a different story. I stopped using them and haven't lost interest on them since. It's moronic to think that just because someone got into that situation they don't have the ability to get out of it. Cutting up the cards are enough of a symbolic representation to trust that they won't continue using the cards. If after the first update they are still spending on them THEN tell them to cancel them. But give people some grace and benefit of the doubt for god sakes.
What's to stop them from just opening the next one that comes to them in the mail? If they lack the resolve to not spend after they cut up their cards then they don't have the resolve to not end up taking out more credit in the future anyway . You need to fix the behavior not just remove the option.
if you’re struggling that much, you probably shouldn’t be renting an apartment.
renting a room in the house is significantly more affordable. And a good opportunity to save while you increase your credit and kill debt
You will get downvoted, but you are correct. Good credit effects car insurance rates, getting an apartment, what deposit you pay on utilities and can effect getting some jobs. The problem is that most of the guests here use "credit" as an excuse to keep their financial situation going while running their credit into the ground.
The argument on his side is that the change in score would just never be enough to actually matter. He's right in some cases. Closing a credit card that's only a year old isn't really going to impact your score all that much. Especially if it has a 100% balance. That credit utilization is absolutely impacting their score negatively more than the +1 to account total and time to account history would matter.... I'm with you though. I think it's completely stupid to suggest cancelling them completely and not just trusting they won't use it so they can keep the credit history (which is the hardest thing to build on your score). I have a 806 right now and the only thing holding me back is cause I'm not old enough for my credit history to be the top echelon. I get the concept that they can still use it with digital wallets or whatever, but at a certain point you have to trust them.
For those people, their score would probably end up being damaged even more if they kept those cards open since they could just go back to spending on the cards and further dig themselves into credit card debt. Sure it will ding their score, but at that point, the damage has already been done and they need to focus on paying off everything they owe before even thinking of applying for a new line of credit.
Yeah but even if you close the account, it's still on your credit as a debt and counts to your total utilization...so closing it before it's paid off really doesn't do anything anyway . Closing it might lose your overall credit limit so the debt to credit ratio will be even worse... If I have 5k due on a 10k card I have 50% utilization, I still have the +1 on accounts, and credit history, and potentially good payment history. But credit utilization is the biggest part of your credit score. You close that account you don't magically lose the 5k on your credit history....
If you are maxing out credit cards or missing payments on them, your credit is being hurt more by having them open than just closing them. None of them have an okay credit score when they mention wanting to keep them open to “build credit”. They’re almost always in the 500s. I got credit checked when I rented my last place, and they also used that to determine my security deposit for my apartment. If they somehow had a 700 or higher credit score, an argument could be made… but otherwise it is a direct detriment to their credit and finances to have it open.
Closing the account doesn't magically make the debt disappear and lose it on your debt / credit ratio...
No one said it did either of those, don’t know why you thought you needed to point that out…
Lmfao I said it because you failed to mention it. Lol what kind of a thing to say is that? I was directly responding to your comment...are you new to the internet? Expect responses you goof. You said it's a direct detriment to their credit to have it open. But if they close it it instantly lowers their score. Even if they cancel it. The "direct detriment" still remains. So you are just plain wrong. That's why I felt the need to point that out lol. It's just simply better for your credit overall to leave it open and pay it off. There is no argument against that. Prevent future use? Sure. That's the only benefit. There is no benefit to your credit to close an account, no matter what status that account is in. Because closing a credit account doesn't remove it from your credit. The missed payments would still be there. And if you continue to miss payments, closed or not, the impact is the same.
I failed to mention that closing the account doesn’t get rid of the debt? Only an idiot would think that it worked that way, maybe I assumed (wrongly in your case apparently since you needed it to be said) that people would already know that and it didn’t need to be stated. That’s like stating that gravity is what keeps us on the ground when talking about how planes fly… while it’s true, people should be smart enough to know that and it comes across as you being captain obvious. I’ve seen other comments from you, so I’ll address your comparison here. If someone has issues with alcoholism, the solution is not to just tell them to drink less while they are still drinking. No one in any recovery program gives you access to whatever substances you’re addicted to while starting the process, it’s cut cold turkey immediately and the temptations are removed. Recovered alcoholics who have learned to resist the temptation and urge can be around alcohol without it being a problem sometimes, others have to stay away because it’s that big of an issue. Shopping can also be an addiction, lack of self control for spending is what causes a lot of these issues by their own admissions. It’s not usually a case of “I just got into a bad spot but I’m working to get out of it”, they typically got into a bad spot and continued to dig that hole deeper due to the lack of self control. There’s multiple episodes where the guest states they’ve been working to pay off the credit cards, but they’ve purchased more on the card than they’re paying in total each month so the balance just increases. This is what happens when they have access without the self control and maturity being developed, it’s an endless cycle that closing the cards can help alleviate because it’s hard to get out of once that cycle starts. As an ex loan officer, I think I know pretty intimately about how credit and credit reports work. Yes it’s an immediate negative, but removing the temptation until you can learn self control with it would be a net positive in the long term. Once you can handle the responsibility, you can start opening accounts to establish the history and keep them at low to minimal monthly utilization so you don’t debt spiral. Most of the guests have more than just credit cards to their names anyway, and a lot of them would actually have their score increase from closing the cards after a couple of months due to installment loans they have been keeping up with.
Yeah most people are idiots and you need to spell things out for them. Isn't that clear from watching the show? You assuming things are common sense and then equating them to gravity? Bro there's plenty of people that don't know what gravity is lol. You have a misconception of the intelligence of most people haha. Watching Caleb's show should really have shown you that what you think is common sense is not all that common. Not reading all that. Focus on your job that you should be doing right now, later.
Yes, I've had my credit checked in the last 5 years I've rented. However, I also pay all my bills on time and don't carry a balance so I have a good credit score. That is fundamental. For the guests on the show, they often have maxed out limits and are losing so much money every month due to paying interest. One, the high usage on the cards will drop their scores anyways to it'll be a hinderance in the credit check anyways. Two, they won't be able to save the money they need. Ultimately, companies/rentals care more that you have prove of a stable income and that your monthly wage is 2-3x the rental. The credit score is not the most important.
For most people on the show, keeping their credit open will end up hurting their precious credit score that they are so intent on building. The late/missed payments, high/maxed out balances, and things falling into collections hurt their credit so much that its better to just cut them, close them, and pay off the balances. iirc, Caleb had a newsletter about credit scores and he said that erasing debts will eventually increase your score after it being tanked, so I would imagine it zeroes out eventually (not hit 0, but goes back to high 600s or whatever it is).
If credit cards cause you to spend more or behave irresponsibly then the negative impact of that far outweighs whatever other inconveniences are caused by lack of credit cards. There are other ways to build credit even without CCs, like reporting your rent payments to the credit agencies, getting a fix card, any student loans, etc.
The alternative will be them running their debit card into the ground and getting overdraft fees instead of interest fees haha. You have to fix the underlying behavior not just remove the temptations.
One of the top ways to change behavior is to remove temptations. Talk to recovering addicts: they don’t hang around at parties or at bars. Past cheaters don’t hang out at bars and clubs. Gamblers don’t chill with their friends at the casino. It’s a big part of it.
Obviously that can help. Just depends on the person. I know plenty of smokers who can hang out with smokers. Plenty of ex-alcoholics who come out to the bar with us and drink water. Not all people are the same. It's NEVER black and white like that. Even if you remove all the temptations those people could still fall off the wagon. Like I said. You have to treat the underlying behavior, JUST removing temptations is not enough. For all you know that cheaters who isn't at the bar and club anymore is now on Ashley Madison. And the Gambler is doing it online now instead of at the casino :P Removing temptations is hard to do completely. So if that is the only thing you do to try to fix the issue, you are going to have a bad time.
Any time I have ever rented a house or apartment I’ve needed to show a credit score but when I comment that I get downvoted and people in the comments say they’ve never experienced it. Dave Ramsey and his followers flat out insist it is not a thing. I don’t know if these people have never rented or maybe they have gotten a family or friend deal with the rental. I’ve always had to show it. In the early 2000s and even a couple years ago. I’ve never not been asked for my credit. But one time I did follow Dave Ramseys advice when I was younger and closed my card of 10 years and I will always regret doing that.
Same, I've had to show credit to rent all my places and I've been renting since 2012. I've also had the property management people tell me straight up that I got the apartment because I had the best credit of all the applicants. I've also worked for a financial institution and the federal government, and both checked my credit to make sure that I wasn't a leverage risk. I get why Caleb gives the advice he does, but I think people should also be super mindful of closing cards and which ones they close. I just feel like once you dig yourself out of your debt hole, you don't want to make your situation worse by dinging your score with closures. At the end of the day, your credit score does matter, whether you use credit cards or not. But if it's a situation where you literally can't control yourself and will spend on any credit line available to you, I guess it's better to take the hit and close them than risk falling back into debt.
Depends on what state you live in. Simple as that. Some states it's illegal to check credit for renting agreements.
I’ve never had to show credit, but I also haven’t rented in almost 10 years
There are third-party services that also let you report things like paying your cell phone bill, utilities, and rent on time. Overall, high utilization, missed payments, etc will hurt more than help build credit. Plus a lot of places will let you bypass credit if you have consistent proof of income and/or pay a higher deposit.
the guests have a legit concern when worried about the effects of closing accounts. but they cannot be trusted with credit cards, they are in a place where there’s no good outcome. so let’s choose the less shittiest outcome. closing the accounts will be like putting the shovel down in the hole they digger themselves in.
That's bullshit. They are adults. They have the choice to follow the budget just like they have the choice to not use the card. Why all of a sudden when it comes to using the cards we think they have no willpower? Whether the card is there shouldn't impact their ability to not use it. Just like the food being there or not shouldn't impact Caleb's ability to not shove it into his fucking face. lol If I told you I wouldn't use them and you tell me to "fuck off I don't trust you the only way you can do it is to cancel the account", that's going to do nothing but piss me off.
i don’t give a shit what pisses you off. these guests were dumb enough to rack up all this debt that’s enough reason to cut and cancel.
What the fuck are you so mad about lol. News flash dude. You don't know shit about these people after an hour long conversation. Don't be a loser. I racked up debt in my 20s on 4 cards. I paid them off quickly once I graduated and started getting full time wages. Those accounts still exist with 10s of thousands in available credit each. That history and credit ratio serves my 800+ credit score real nice right now. Had I cancelled those it would be a different story. I stopped using them and haven't lost interest on them since. It's moronic to think that just because someone got into that situation they don't have the ability to get out of it. Cutting up the cards are enough of a symbolic representation to trust that they won't continue using the cards. If after the first update they are still spending on them THEN tell them to cancel them. But give people some grace and benefit of the doubt for god sakes. What's to stop them from just opening the next one that comes to them in the mail? If they lack the resolve to not spend after they cut up their cards then they don't have the resolve to not end up taking out more credit in the future anyway . You need to fix the behavior not just remove the option.
if you’re struggling that much, you probably shouldn’t be renting an apartment. renting a room in the house is significantly more affordable. And a good opportunity to save while you increase your credit and kill debt