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4 People With Perfect Credit Scores Tell Us How They Did It

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Have you always dreamed of being able to say you have a perfect credit score — that all-important 850 on the FICO scale?

First, you should know that having an 850 credit score isn’t really all that important. In fact, the real “perfect credit score” is closer to the 760 mark. Why? Because that’s about as high as your score needs to be to get the best treatment from lenders.

As of 2018, approximately 22% of U.S. adults could say they earned a FICO score of 800 or above. Around 36% of U.S. consumers have a score between 700 and 799.

Despite the fact that the idea of “perfect” is, in this realm, something of an illusion, you should try to get the best score you possibly can. To give you some ideas of how you might do this, we have profiled four people who have perfect (or darn near perfect) credit scores.

To keep things fair and consistent, we asked everyone to run their FICO score using the free Discover credit score tool. (This FICO score is based on data from Experian, one of the three major credit bureaus.)

What we found were four very different pictures of “perfection” — and what it takes to achieve it.

Dominique Brown

Dominique Brown

32 years old
Alexandria, Va.

His score: 850

His credit stats: Dominique has 25 revolving credit accounts on his credit report and another 14 in the form of installment loans (as a REALTOR, he invests in real estate properties). Overall, the average age of these accounts is just under 15 years. Dominique has one hard and fast rule about how much available credit his family uses: “We never go over 20% utilization ever in any billing period.” He’s not kidding. His credit report shows a super low utilization rate of 2%.

How he uses credit: Dominique’s credit card habits begin and end with his budget. “In my house, we plan every dime that we make before the month starts,” he said. “For every purchase that we can, we put it on the credit card and just pay it off in full by the due date.” Because he pre-plans his monthly earnings and spending, Dominique never worries about needing enough to afford a certain bill. And by using credit almost exclusively, he earns tons of rewards points.

His secret: Dominique credits his mother with instilling good financial habits in him at an early age. “She would give me an allowance every two weeks for chores, and I had to manage my money for savings, fun and goals, just like an adult,” he said. His mother also gave him three rules to live by: Save 10% of his money, always stick to a budget and never spend more than he earned.

Thoughts on hitting 850: “This may sound weird to some, but to have an 850 credit score was not a milestone for me financially,” he said. “I realized a long time ago that your credit score is only half the battle … cash flow management is what matters the most.”

Brenda

Brenda Vaughn

44 years old
Athens, Ga.

Her score: 825

Her credit stats: Brenda has six credit cards, including three general-use credit cards (cards that can be used anywhere) and three retail store credit cards. Her credit history is 25 years old. She has a mortgage loan with a balance. And she has borrowed money to buy cars and to pay for tuition.

How she uses credit: Brenda still has the first credit card she opened at age 19, at her mother’s urging. She admits it took her a while to get the hang of it. “I didn’t always [pay my bill on time], and it was out of control a couple of times,” she said. Nowadays, she uses her cards primarily to earn cash back, and pays them off every month. “My parents gave me a set amount of money each month while I was in college and said if I needed more, then I needed to get a job, and so I did,” she said.

Her secret: Even with a history of missed payments on her accounts, Brenda’s score is incredible. She has time on her side there. Because she hasn’t missed a payment over the past 15 years, those old negative marks have long been removed from her credit report. Negative marks will generally only stay on your credit report for up to seven years.

Jim

Jim Droske

51 years old
Willowbrook, Ill.

His score: 830

His credit stats: Jim has nine credit cards and, when we spoke with him, he had a total of $7,720 on those cards. That balance seems pretty high, but because he has such a high total available credit across all his cards — $88,000 — his utilization rate is very low. He’s using only 9% of the credit he could be using. Jim’s credit history is 32 years old, and the average age of his accounts is about 10 years.

His secret: To put it simply, Jim is the perfect credit customer. He’s never missed a payment and he’s never had an account go to collections. At age 24, Jim was thrown into a job in finance, running the lending department at an auto dealer. He saw firsthand how important credit scores were when it came to getting the best finance rates from lenders.

“I read a lot about how credit and credit scores work, and still do,” he said.With Jim’s long credit history and perfect payment record, it’s no wonder his credit is stellar.

How he uses credit: Jim is steadfast about what he charges — and what he doesn’t. “I only use credit for bigger purchases that can not reasonably be paid for in cash,” he said. “I do not charge for points, and always pay much more than the minimum payment due until it is paid off.”

john

John Ulzheimer

48 years old
Atlanta, Ga.

My score: 850

My secret: Yes, I also have a perfect credit score. Like most of the people I spoke with for this piece, I have one huge advantage here: I’m kind of old! And that means my credit history is older than average — 22 years and counting.

Fortunately, credit scoring models take age into account when they calculate scores. The older your credit history, the higher you score will be. I also have a stellar payment history. I can say I haven’t missed any payments since 1991, when I graduated from college and started working at Equifax.

My credit stats: I have 13 credit cards and a total of 19 accounts, active and inactive on my credit report. As of last month, I carried a total of $9,500 on those cards, with a total credit capacity of $133,000. That makes my utilization rate a low 7%.

How I use credit: I pay my cards in full each month and have never carried a balance. The beauty of not carrying a balance is that I never have to pay interest, no matter what my APR is. In fact, I have no idea what my APRs are, because they’re irrelevant to me. I don’t shy away from applying for credit but only do so when I actually need it. I learned about credit from my years working for Equifax and FICO.

So what’s the real secret to getting a perfect (or almost perfect) credit score?

Here’s what everyone profiled in this piece has in common: None of us avoid credit. In fact, we all have a TON of credit cards.

But we use them wisely. None of us have negative marks on our credit reports, and we keep our monthly balances low relative to our total credit limit. Last but not least, we all have credit histories that are at least 15 years old, which makes up 15% of your FICO score alone. Keep in mind that, while your FICO score isn’t your only credit score, it is the one used most by lenders.

What else makes up your FICO score? As you work to get your best score, keep this five-part breakdown in mind.

  1. The most important factor of your credit score is your payment history, which makes up 35% of the total. In short: If you make late payments, you will damage your score. If you make on-time payments, you’ll help boost your score. Do everything you can to avoid ever sending a payment in late. Setting up autopay, so you can be sure to never forget a payment, could be a great idea.
  2. Amounts owed makes up 30% of your score. This includes your credit utilization. As discussed before, the lower your utilization rate (that is, the amount you have charged on your cards versus the total amount of credit available to you), the better it is for your score.
  3. As noted above, the length of your credit history makes up 15% of your FICO score total. You may have some older cards you rarely use, and perhaps you think it would be best to cancel them. This would actually be the wrong move to make on your journey to a strong credit score — the longer your credit history, the better. So even if you rarely use those cards, you should consider making small purchases on them and paying those balances off in order to keep them in rotation, and keep your credit history intact. (Note: Sometimes credit card issuers will cancel a card if it is never used.)
  4. The next factor is the kind of credit you have, and this makes up 10% of your score. It is best to have different kinds of credit (installment loans including auto and mortgage loans, as well as revolving credit, such as credit cards) rather than just one type.
  5. New credit makes up another 10% of your score. If you aim to open up a lot of new credit at around the same time, resulting in hard inquiries on your credit report, it could ding your score by a small amount. However, in general, you should not fear applying for new credit — as long as you use it responsibly, it’s more likely to help your score over the long run than to hurt it. If you are in the market for a mortgage, however, you should avoid opening up any new credit card accounts if possible, as it could have a negative effect on the process.

There are several ways you can access your credit score for free so you can keep on top of it. MagnifyMoney’s parent company, LendingTree, has a credit monitoring service available to anyone who wants to sign up. LendingTree uses the VantageScore model, which is slightly different than the FICO model but uses the same scoring system.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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Marcus by Goldman Sachs Review: GS Bank Takes on Online Savings, CDs, and Personal Loans

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Marcus by Goldman Sachs savings account

A very high interest rate and no fees make this one of the best savings accounts out there.

APY

Minimum Balance Amount

1.70%

None

  • Minimum opening deposit: None. However, you’ll need to deposit at least $1.00 if you want to earn any interest
  • Monthly account maintenance fee: None
  • ATM fee: N/A
  • ATM fee refund: N/A
  • Overdraft fee: None

This is a great account for almost anyone. However, before you click that “Learn More” button below, there are a couple of things to know.

No ATMs. First, Marcus by Goldman Sachs doesn’t offer ATM access to your savings account. You’ll either need to deposit or withdraw money by sending in a physical check, setting up direct deposits, or by moving the money to and from your other bank accounts via ACH or wire transfer.

No checking account. Second, Marcus does’t offer a corresponding checking account. That means you can only use this account as an external place to park your cash from your everyday money flow.

Keeping a separate savings account does have its benefits. For example, it’s harder to tempt yourself to withdraw the cash if you’re a chronic over-spender. But, it also means that there might be a delay of a few days if you need to transfer the money out of your Goldman Sachs online savings account and into your other checking account.

How to open a Goldman Sachs online savings account

It’s really easy to open an online savings account with Marcus by Goldman Sachs. You can do it online or over the phone as long as you’re 18 years or older, have a physical street address, and a Social Security Number or Individual Taxpayer Identification Number.

You’ll be required to sign a form which you can do online, or by mail if you’re opening the account over the phone.

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How their online savings account compares

Marcus’ online savings account can easily be described with one word: outstanding.

You’ll get a relatively high interest rate with this account, which is among the best online savings account rates you’ll find today. In fact, these rates are currently over seven times higher than the average savings account interest rate.

Even better, this account won’t charge you any fees for the privilege of keeping your money stashed there. It’s a tall order to find another bank that offers these high interest rates with terms this good.

Marcus by Goldman Sachs CD rates

Sky-high CD rates, but watch out for early withdrawal limitations.

Term

APY

Minimum Deposit Amount

6 months

0.60%

$500

9 months

0.70%

$500

12 months

1.85%

$500

18 months

1.85%

$500

24 months

1.85%

$500

3 years

1.85%

$500

4 years

1.85%

$500

5 years

1.90%

$500

6 years

1.90%

$500

  • Minimum opening deposit: $500
  • Minimum balance amount to earn APY: $500
  • Early withdrawal penalty:
    • For CDs under 12 months, 90 days’ worth of interest
    • For CDs of 12 months to 5 years, 270 days’ worth of interest
    • For CDs of 5 years or over, 365 days’ worth of interest

Marcus’ CDs work a little differently from other CDs. Rather than having to set up and fund your account all at once, Goldman Sachs will give you 30 days to fully fund your account.

Once open, your interest will be tallied up and credited to your CD account each month. You can withdraw the interest earned at any time without paying an early withdrawal penalty, but heads up: If you withdraw the interest, your returns will be lower than the stated APY when you opened your account.

If you need to withdraw the money from your CD, you can only do so by pulling out the entire CD balance and paying the required early withdrawal penalty. There is no option for partial withdrawals of your cash.

Finally, once your CD has fully matured, you’ll have a 10-day grace period to withdraw the money, add more funds, and/or switch to a different CD term. If you don’t do anything, Marcus will automatically roll over your CD into another one of the same type, but with the current interest rate of the day.

How to open a Goldman Sachs CD

Marcus has made it super simple to open up a CD. First, you’ll need to be at least 18 years old, and have either a Social Security Number or an Individual Taxpayer Identification Number.

You can open an account easily online, or call them up by phone. You’ll need to sign an account opening form, which you can do online or via a hard-copy mailed form. Then, simply fund your CD account within 30 days, and you’re all set.

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How their CDs compare

The interest rates that Marcus offers on their CDs are top-notch. In fact, a few of their CD terms are among the current contenders for the best CD rates.

If you’re interested in pursuing a CD ladder approach, Marcus is one of our top picks because each of their CD terms offer above-average rates. This means you can rest easy that you’ll get the best rates for your CD ladder without having to complicate things by spreading out all of your CDs among a handful of different banks.

The only downside to these CDs compared with many other banks is that you can’t withdraw a portion of your cash if you need it. It’s either all-in, or all-out. However, once out, you’re still free to open a new CD with the surplus cash, as long as it’s at least the $500 minimum deposit size.

Marcus by Goldman Sachs personal loan

Personal loans offered by Marcus have low APRs, flexible terms, and no fees.

Terms

APR

Credit Required

Fees

Max Loan Amount

36 to 72 months

6.99%-28.99%

Not specified

None

$40,000

Marcus by Goldman Sachs® personal loans can be used for just about anything, from consolidating debt to financing a large home improvement project. They offer some of the best rates available, with APRs as low as 6.99%, and you’ll not only be able to choose between a range of loan terms, but you can also choose the specific day of the month when you want to make your loan payments.

While there are no specific credit requirements to get a loan through Marcus, the company does try to target those that have “prime” credit, which is usually those with a FICO score higher than 660. Even with a less than excellent credit score, you may be able to qualify for a personal loan from Marcus, though, those that have recent, negative marks on their credit report, such as missed payments, will likely be rejected.

Applicants must be over 18 (19 in Alabama and Nebraska, 21 in Mississippi and Puerto Rico) and have a valid U.S. bank account. You are also required to have a Social Security or Individual Tax I.D. Number.

No fees. Marcus charges no extra fees for their personal loans. There is No origination fee associated with getting a loan, but there are also no late fees associated with missing payments. Those missed payments simply accrue more interest and your loan will be extended.

Defer payments. Once you have made on-time payments for a full year, you will have the ability to defer a payment. This means that if an unexpected expense or lost job hurts your budget one month, you can push that payment back by a month without negatively impacting your credit report.

How to apply for a Marcus personal loan

Marcus by Goldman Sachs offers a process that is completely online, allowing you to apply, choose the loan you want, submit all of your documents, and get approved without having to leave home. Here are the steps that you will complete to get a personal loan from Marcus:

  1. Fill out the information that is required in the online application, including your basic personal and financial information, as well as how much you would like to borrow and what you will use the money for.
  2. After a soft pull on your credit, and if you qualify, you will be presented a list of different loan options that may include different rates and terms.
  3. Once you have chosen the loan you want, you will need to provide additional information to verify your identity. You may also be asked for information that can be used to verify your income and you will need to provide your bank account information so that the money can be distributed.
  4. You will receive your funds 1 – 4 business days after your loan has been approved.

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How their personal loans compare

Marcus offers low APRs and flexible terms with their personal loans, but their main feature is that they have no fees. If you are looking for a straightforward lending experience with no hidden fees or costs, Marcus will be perfect for you since you won’t even have to worry about late fees if you happen to miss a payment.

While Marcus offers some great perks, you may be able to get a lower rate if you choose to go with another lender, such as LightStream or SoFi. Both of these lenders offer lower APR ranges and they don’t charge origination fees, though, LightStream will do a hard pull on your credit to preapprove you.

LendingClub and Peerform both have lower credit requirements than Marcus, but they also charge origination fees and, being P2P lending platforms, you will need to wait for your loan to be funded and you run the risk that other users might not fund your loan.

Overall review of Marcus by Goldman Sachs‘ products

Marcus has really hit it out of the park with their personal loans, online savings, and CD accounts. Each of these accounts offers some of the best features available on the market, while shrinking the fees down to a minuscule, or even nonexistent, amount. Their website is also slick and easy to use for online-savvy people.

The only thing we can find to complain about with Marcus is that they don’t offer an equally-awesome checking account to accompany their other deposit products. Indeed, it seems like Marcus has turned their former hoity-toity image around: Today, they’re a bank that we’d recommend to anyone, even blue-collar folks.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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How to Buy a Home Through an Estate Sale

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

When a person dies, someone has to distribute or sell their assets. If the deceased has a property that hasn’t been willed to someone, or that their heirs don’t want, it will often be sold at an estate sale. In some cases, owners will hold estate sales themselves if they need to downsize or move.

A person’s estate includes their house and everything in it, meaning furniture, antiques and the property itself are up for grabs in an estate sale. If you’re looking for a house, you might be able to score a decent deal on one through an estate sale.

What is an estate sale?

Estate sales are typically initiated by the owner’s heirs or relatives. They may have inherited the home but have chosen not to live in it, or they’re selling the property to pay off their loved one’s debts. An estate sale may include the home the person lived in or owned and/or their valuables.

Buying an estate sale home vs. a probate sale home

An estate sale is held by an owner’s heirs or loved ones, or a company or real estate agency they’ve hired to handle the process. A probate sale happens when the decedent, or person who has died, passes away without a will. A probate court administrator will handle the estate and sale of the property, and the proceeds from the sale will be used to pay off creditors and any other outstanding accounts.

Probate courts publicize a person’s death so that anyone who has a claim to the proceeds of the estate can file that with the court. It’s worth looking out for probate home sales because the selling prices can be lower than market value.

If you’re in a hot real estate market and the house is being sold in a bidding process, be prepared to pay market value (at a minimum), as bidding can be competitive. You’re also less likely to negotiate for a lower price at a probate sale.

5 tips for purchasing a home from an estate sale

Follow these tips before getting a mortgage for an estate sale home:

  1. Keep an eye out for estate sale listings and treat them as open houses. Check local classified ads and online real estate sites. You can also contact local estate sale companies or probate courts to ask about recent listings. Estate sales are held over a few days (often a weekend), so go back a couple of times if needed. Test the water pressure, take measurements (but be subtle) and spend plenty of time in each room absorbing all the details. Look for foundation cracking or settling so you can ask questions after touring the home.
  2. Don’t judge a house by its listing photos. Remember that the seller may be a grieving relative or a court administrator, neither of whom are going to be super motivated to stage the home the way a traditional seller would. Even if the online photos are lackluster, reserve judgment until you see the property in person — the house might have more charm than you think. Be realistic about your budget and timetable, though, if you think the home needs more repairs or improvements than you can handle.
  3. Get preapproved. Get preapproved for a mortgage before you start looking at houses. Preapproval will help you move faster when you’re ready to buy, and it may give you some leverage in price negotiations.
  4. Move quickly on inspections and use due diligence.Schedule a home appraisal and inspections as soon as possible because these will affect your loan application and your offer. If a home inspector finds serious problems with the home, you’ll likely want to reduce your offer accordingly. Your mortgage lender will require you to take out lender’s title insurance, which protects the lender from financial loss if any ownership claims arise after closing. The lender will also order a title search for any liens, ownership disputes or judgments against the property. In addition, consider buying an owner’s title insurance policy to protect your investment if ownership is disputed later on.
  5. Budget for renovations. Be realistic about what you need to change to make the home livable. If the dated wallpaper, crown molding and kitchen backsplash make you feel like you’re in a time warp, build those renovations into your budget. Look beyond the low selling price to account for all of the costs you’ll need to cover with your mortgage.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

By clicking “See Rates”, you will be directed to LendingTree. Based on your creditworthiness, you may be matched with up to five different lenders in our partner network.