Why you don't need a perfect credit score - The Points Guy

Nothing really new here and my banks credit score trackers have the same parameters. I don't know if it is even possible to have a perfect score, but above 780 puts you in line for the good credit rate. Get in that 800 neighborhood, you can negotiate for the best rates if your payment history is clean.

Personal story about payment history. You may have figured out that I work in the Building Material Supply industry, still work part time on the technical and engineering side. When the Building Bubble bust, I was working a highly commissioned position. Building had always been boom and bust, didn't really panic about it until it became obvious that the recovery wasn't coming anytime soon. My income dropped by 50%. My wife was employed also, but is still meant a 30-35% income drop in family income. We had some resources, but as things dragged out into 2009, it was obvious that we needed to do something drastic to at least save the house before things were beyond my control. I'm a numbers type of guy and had been though enough bankruptcies with companies I had worked, the answer was clear. I filed bankruptcy. Now Personal Bankruptcies have a number of hoops to jump through, credit counseling, they push for debt consolidation, all of which are designed around the premise you overspent your income, not lost half of it in the middle of a recession/depression, so I pushed through to bankruptcy.

The point to all of that story is the outcome. When that bankruptcy was discharged, I came out with a credit score in the high 600's simply because my payment history was good since I had been able to maintain at least minimum payments. My current rating hovers around the 800 mark.

A couple of additional points. Debt consolidation seldom works. If the numbers don't add up, they still won't add up when you consolidate. About half (at least) are scams anyway. If you at to that point, file bankruptcy.

Last point is don't feel sorry for banks and credit card companies. The current discount rate is 4.5% for money that costs you 18%-22% if you carry a credit card balance.