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  1. #1
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    Us Question about dell financing and my credit

    I recently bought a $750 dollar laptop through dell's financing. I'm a 19 year old student and my APR is extremely high (29.99%), even though I have always paid off my credit card in full, naturally I was disappointed. So after I saw my APR, I now want to pay this off in full right away without a doubt, to avoid paying such a high interest rate!! My main goal in this is to increase my credit score by making all the necessary payments. My question is, if I pay the total balance off in full in the first month is it going to increase my credit score? Or do I have to make all the payments on time and leave a balance on it. It seems to make sense that my credit score will increase if I pay this off in full right away but I need to make sure.
    Last edited by RPoling720; 6th May 2009 at 03:49 PM.

  2. #2
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    Default Re: Question about dell financing and my credit

    Actually, you probably made a small ding in your credit to get that Dell card. It just happens whenever you open a new account.

    I'm not 100% sure, but I do no think there will be a big difference in your score because you paid the laptop off in full or not. With a APR that high, I'd get it off all in the first month and be done with it. What matters more for your score is your utilization and available credit, and lack of negative history.
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    Default Re: Question about dell financing and my credit

    With a transaction so small, this can only hurt your credit score if you fail to pay it off on time, or if you carry a high balance. Paying it off is going to have a negligible effect on your credit.
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    Default Re: Question about dell financing and my credit

    Credit is affected mostly by:

    * Percentage of revolving credit used (you never want to have a balance on a card that is more than 50% of the limit)
    * Credit inquiries
    * Payments (of course you want everything on time)
    * Length of time you have had credit (the longer the better of course, even if the oldest account doesn't have a balance)
    * Amount of credit (you want some, but not too much)
    * Collections/credit counseling

    It's always a good idea with retail credit cards (Dell, Best Buy, department stores) to look for 0% financing offers, as the cards almost always have high finance charges. This allows you to make payments and establish credit history without paying ridiculous interest rates.

    Another option is to get a single major credit card (preferably one with cash back or frequent flyer mile options) and put all of your daily expenses on the card, then pay the total balance off each month. This method also protects you from problems like fraud or overcharges if you use your debit card.
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    Default Re: Question about dell financing and my credit

    Quote Originally Posted by Stella View Post
    Credit is affected mostly by:

    * Percentage of revolving credit used (you never want to have a balance on a card that is more than 50% of the limit)
    * Credit inquiries
    * Payments (of course you want everything on time)
    * Length of time you have had credit (the longer the better of course, even if the oldest account doesn't have a balance)
    * Amount of credit (you want some, but not too much)
    * Collections/credit counseling

    It's always a good idea with retail credit cards (Dell, Best Buy, department stores) to look for 0% financing offers, as the cards almost always have high finance charges. This allows you to make payments and establish credit history without paying ridiculous interest rates.

    Another option is to get a single major credit card (preferably one with cash back or frequent flyer mile options) and put all of your daily expenses on the card, then pay the total balance off each month. This method also protects you from problems like fraud or overcharges if you use your debit card.
    Absolutely do agree. it is definitely hard for a student your age to increase your credit score. it is a lot of financial risk actually you should not take. keep it going the way it way might be a good recommendation. pay it off slowly.

  6. #6
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    Default Re: Question about dell financing and my credit

    per my financial advisor you can raise your credit score very easy with this method:

    3 small credit lines (I have a JC Penny card, Credit Union card, and Bestbuy card) each card started out with like $500-1000 max.

    Keep about 30% of the card's max on the card as much as possible. Having a credit card with nothing on it does nothing for you. Having a maxed out credit line will hurt you. Having a credit card with a balance that indicates you use it, but plenty of available credit left shows maturity and control, and will increase your chances of getting loans, better interest rates, etc.

    My wife and I did this method starting at 19-20ish (just were dating at the time and had seperate accounts) and both of us had 700+ credit scores by the time we got married 3-4 years later. We qualified for the lowest interest rate that Toyota and Mazda offer on our new cars and both dealers went from treating us like "kids looking at cars" to "potential valuable customers" in a flash when they checked our credit.

    Talk to your bank/credit union and ask them for advice on safely increasing your credit score. It's a smart thing to start working on as soon as possible and it really has paid off for my wife and I on our car loans, mortgage loans, etc. We save thousands a year just on the money we save from not paying the higher interest rates.

    All that being said, Dell still stuck us with a 29.99% APR and I honestly suspect that most people get that.

    Scam.

    EDIT: Regarding the post right before mine, paying it off slowly is a *terrible* idea, as he's paying 30% interest. He could be paying it off for years. Get it paid off and close the account ASAP and get a student-friendly credit card. They usually have low fixed APR cards for students through Amex and Mastercard.

  7. #7
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    Default Re: Question about dell financing and my credit

    Quote Originally Posted by Zlog View Post
    per my financial advisor you can raise your credit score very easy with this method:

    3 small credit lines (I have a JC Penny card, Credit Union card, and Bestbuy card) each card started out with like $500-1000 max.

    Keep about 30% of the card's max on the card as much as possible. Having a credit card with nothing on it does nothing for you. Having a maxed out credit line will hurt you. Having a credit card with a balance that indicates you use it, but plenty of available credit left shows maturity and control, and will increase your chances of getting loans, better interest rates, etc.

    My wife and I did this method starting at 19-20ish (just were dating at the time and had seperate accounts) and both of us had 700+ credit scores by the time we got married 3-4 years later. We qualified for the lowest interest rate that Toyota and Mazda offer on our new cars and both dealers went from treating us like "kids looking at cars" to "potential valuable customers" in a flash when they checked our credit.

    Talk to your bank/credit union and ask them for advice on safely increasing your credit score. It's a smart thing to start working on as soon as possible and it really has paid off for my wife and I on our car loans, mortgage loans, etc. We save thousands a year just on the money we save from not paying the higher interest rates.

    All that being said, Dell still stuck us with a 29.99% APR and I honestly suspect that most people get that.

    Scam.

    EDIT: Regarding the post right before mine, paying it off slowly is a *terrible* idea, as he's paying 30% interest. He could be paying it off for years. Get it paid off and close the account ASAP and get a student-friendly credit card. They usually have low fixed APR cards for students through Amex and Mastercard.

    I have a friend who is a loan officer and this is the exact same experience he has. Everyone with the highest credit scores he has seen has gone this path (3-4 credit lines).

    At 30% APR, you should pay that off ASAP.
    There are about 10000 other ways to better you credit than paying 30%.
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