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CREDIT SCORE QUESTIONS

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CREDIT SCORE QUESTIONS
Mon Jan 22, 2018 12:26 pm
  • Do you know the ropes?

    I’ve got some serious questions, and I’m looking for some serious advice.
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    pmedic920
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Re: CREDIT SCORE QUESTIONS
Mon Jan 22, 2018 1:01 pm
  • pmedic920 wrote:
    I’ve got some serious questions, and I’m looking for some serious advice.


    You're a moderator on this forum, you know better than to ask a question like this lol.

    It's like any serious question on here, throw it out there and hopefully 5% of what people post you can actually take seriously.
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Re: CREDIT SCORE QUESTIONS
Mon Jan 22, 2018 1:23 pm
  • Two years ago I finally paid off all of my debt outside of my mortgage and it feels friggen' amazing. I will say I learned my lesson with my credit score though. I paid off and closed my longest running credit card I had which was 17 years, and that hurt my score big time. Here I thought paying it off and closing it would be great, but it actually hurt my score since it was my longest item of credit history.

    By closing that single card, it dropped me down over 30 points. Word to the wise, leave your lines of credit open, DO NOT CLOSE THEM.
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Re: CREDIT SCORE QUESTIONS
Mon Jan 22, 2018 1:29 pm
  • 2_0_6 wrote:Two years ago I finally paid off all of my debt outside of my mortgage and it feels friggen' amazing. I will say I learned my lesson with my credit score though. I paid off and closed my longest running credit card I had which was 17 years, and that hurt my score big time. Here I thought paying it off and closing it would be great, but it actually hurt my score since it was my longest item of credit history.

    By closing that single card, it dropped me down over 30 points. Word to the wise, leave your lines of credit open, DO NOT CLOSE THEM.


    Interesting. I didn't know that. :?
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Re: CREDIT SCORE QUESTIONS
Mon Jan 22, 2018 1:38 pm
  • Ya I didn't either.. After I asked my contact at the bank why my score dropped even though I was now at $0 revolving debt the first question he asked is if I closed a credit card.

    I wish I would have known earlier, but live and learn I guess.
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Re: CREDIT SCORE QUESTIONS
Mon Jan 22, 2018 1:55 pm
  • Do you already have one and you're looking to raise it, or you don't have one? Serious question - I don't have one.
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Re: CREDIT SCORE QUESTIONS
Mon Jan 22, 2018 3:08 pm
  • I'm in the field. PM me any questions or I can answer them publicly here - your choice.

    That goes to all of you.
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CREDIT SCORE QUESTIONS
Mon Jan 22, 2018 3:16 pm
  • So here’s my main question but I’ll have to explain a bit.

    First, I have no bad marks on my report but I don’t have a really old credit history.

    Years ago my credit got destroyed in a divorce, so I spent a lot of years paying cash.

    I don’t have any “store” or “gas” cards.

    I do have 4 visa/master type cards.

    I’m currently carrying about 10k in Credit card debt, and that is about 80% of the limit on those cards.

    What is hurting my “score” is that % of available Credit.

    I have the money to “pay off” all of that debt but I’ve heard conflicting opinions on how to best raise my score.

    I am aware that closing these accounts IS NOT a good idea when it comes to raising my score.

    I’ve heard that keeping accounts active with 25-30 % of the limit is optimal.

    I’ve also heard that getting a “loan” to pay off the debt, and then paying that loan off in 90-180 days would help my score the most.

    Again, I don’t have bad credit but my score is not as good as I’d like it to be. It’s been hovering right about 700 for a few years.

    I do want to pay off my credit card debt with the cash I have on hand, I just want to do it in the most advantageous way.

    I’m not in a huge hurry but don’t want to drag it out for a year either.
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Re: CREDIT SCORE QUESTIONS
Mon Jan 22, 2018 3:52 pm
  • My wife is in this field as well. What you were told about taking out a loan to pay the cards down to <30% and then paying off the loan was correct, in my experience. You don't need to wait 3 months either - when my credit was destroyed from being poor, I got a favorable car loan from a local dealer. My daughter totaled the car just as I made the first payment, and the insurance paid off the loan (it was actually less than book value). When this happened my credit score went up so much I was able to go back to the same dealer and get a replacement car that was 3 years newer and my payments went down.

    I told her she could total that one too, and the next couple, and pretty soon Subaru would be paying us to have a new car! She "politely declined"...
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Re: CREDIT SCORE QUESTIONS
Mon Jan 22, 2018 4:07 pm
  • I'm no expert, but here is my $.02:

    I'd get a consolidating loan, and pay off the cards (or as many as you can). This will initially increase your credit limit, but keep your debt the same, so you'll notice a bump in your score.

    Pay off the loan in a year (or even 6 months if possible).

    Keep your credit cards open, and use them for gas, groceries, whatever you would normally spend cash/debit card on. And pay them off 85-90% at the end of the month. The interest for such a little amount won't be much, I'd rather pay a few bucks a month to help the credit score. Keep doing that even after the loan is paid off.
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Re: CREDIT SCORE QUESTIONS
Mon Jan 22, 2018 4:08 pm
  • In the 50's paying off debt was looked upon as a good person to lend to, since lets say the late 70's and even more so from the 90's onward having debt and loaded debt is now looked upon as a good thing, why I have no idea except the lenders now get a bunch of interest being paid from everyone with maxed out debt and asking for a higher ceiling to advance it even further.

    I went thru the divorce hoop as well, then bankrupted due to it, since then I have had zero credit cards and that's been 20 plus years. I have a credit score that read like 597 somehow still though lol. Paid cash for everything cars and all the stuff I want and stock away money in savings for emergencies.
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Re: CREDIT SCORE QUESTIONS
Mon Jan 22, 2018 8:22 pm
  • I noticed for me personally, one of the best ways was to let them juice me, but making well over the minimum payment; but don't let those cards sit empty. Don't let them sit at 80% full either, though. Make a big payment once in a while. Half of the time I got a credit line increase, it was within six weeks of making an abnormally large ($700-$1500) payment. I suspect it might be them going "uh oh, that person might be paying everything off to stop using credit cards altogether, let's entice them!"
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Re: CREDIT SCORE QUESTIONS
Mon Jan 22, 2018 8:44 pm
  • See if you can get credit line increases on your cards. Having more credit available helps your score, and will also reduce your % used which also helps your score.
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Re: CREDIT SCORE QUESTIONS
Mon Jan 22, 2018 9:02 pm
  • 2_0_6 wrote:Two years ago I finally paid off all of my debt outside of my mortgage and it feels friggen' amazing. I will say I learned my lesson with my credit score though. I paid off and closed my longest running credit card I had which was 17 years, and that hurt my score big time. Here I thought paying it off and closing it would be great, but it actually hurt my score since it was my longest item of credit history.

    By closing that single card, it dropped me down over 30 points. Word to the wise, leave your lines of credit open, DO NOT CLOSE THEM.



    Yep, your correct. I used to work in the mortgage field and did a lot of debt consolidations. You always wanted to keep at least one CC open, otherwise you lose what your credit scores look for. It's not a bad idea to use them and show that you can constantly pay them off as well.
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Re: CREDIT SCORE QUESTIONS
Mon Jan 22, 2018 10:07 pm
  • pmedic920 wrote:So here’s my main question but I’ll have to explain a bit.

    First, I have no bad marks on my report but I don’t have a really old credit history.

    Years ago my credit got destroyed in a divorce, so I spent a lot of years paying cash.

    I don’t have any “store” or “gas” cards.

    I do have 4 visa/master type cards.

    I’m currently carrying about 10k in Credit card debt, and that is about 80% of the limit on those cards.

    What is hurting my “score” is that % of available Credit.

    I have the money to “pay off” all of that debt but I’ve heard conflicting opinions on how to best raise my score.

    I am aware that closing these accounts IS NOT a good idea when it comes to raising my score.

    I’ve heard that keeping accounts active with 25-30 % of the limit is optimal.

    I’ve also heard that getting a “loan” to pay off the debt, and then paying that loan off in 90-180 days would help my score the most.

    Again, I don’t have bad credit but my score is not as good as I’d like it to be. It’s been hovering right about 700 for a few years.

    I do want to pay off my credit card debt with the cash I have on hand, I just want to do it in the most advantageous way.

    I’m not in a huge hurry but don’t want to drag it out for a year either.


    The biggest thing here is decreasing the utilization (% used) on your revolving accounts, rather than how you pay the debt off. It is 30% of the determination of your FICO score.* Ideally, you want all of your revolving accounts at zero utilization except one, which would be below 10%. That's unrealistic for most people - the magic number is 30% utilization. You want to be below 30% utilized.

    A consolidation loan works, sure. It will help with your credit mix (having different/diversified account types accounts for 10% of your FICO score) and bolster your payment history (35% of your FICO score).

    Really, the utilization is what is killing you here. Just get it down somehow. That's the biggest thing. Pay it off, consolidate it with a loan, increase your credit lines, etc. I would say just pay it off to avoid having to take a loan and pay even more interest.

    I spend all day looking at reports. Utilization is the second biggest cause of denial, only behind delinquency.

    *Amounts owed is 30% of FICO Score - this includes revolving utilization. A larger number of accounts with balances will also hurt the score as it indicates risk of over-extension. Also, if you have high loan balances (in comparison to the amount the loan was made for), this will hurt your score.

    Also, if you don't have much new credit, I'd think about opening a small retail card. Having a retail account can help diversify your report. Again, credit mix is 10% of the score. May raise the ceiling on your score, so to speak.
    Last edited by Maelstrom787 on Mon Jan 22, 2018 10:20 pm, edited 2 times in total.
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Re: CREDIT SCORE QUESTIONS
Mon Jan 22, 2018 10:16 pm
  • 2_0_6 wrote:Two years ago I finally paid off all of my debt outside of my mortgage and it feels friggen' amazing. I will say I learned my lesson with my credit score though. I paid off and closed my longest running credit card I had which was 17 years, and that hurt my score big time. Here I thought paying it off and closing it would be great, but it actually hurt my score since it was my longest item of credit history.

    By closing that single card, it dropped me down over 30 points. Word to the wise, leave your lines of credit open, DO NOT CLOSE THEM.


    Average Age of Accounts is definitely big. It is a huge determiner within the "Length of Credit History" section of FICO determination, which is 15% of the score overall.
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Re: CREDIT SCORE QUESTIONS
Tue Jan 23, 2018 8:49 am
  • If this is specifically about raising your credit score, then yes having adequate revolving credit, and more importantly paying your credit bills on time is the most important part of this equation.

    But if we're talking big picture about being the MOST financially solvent, and just having an overall less stressful life? Then I advise paying off as much debt as you can.

    Because being debt free means freedom, the freedom to NOT have to work more, work overtime to pay on loans and debt, spend more time with your family, travel, etc.

    Being a financial adviser, I always advise clients to pay off debt. It frees up cash to invest and save, and most importantly as I said above it means more financial freedom......................and personal freedom.
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Re: CREDIT SCORE QUESTIONS
Tue Jan 23, 2018 11:16 am
  • I'm in the field as well. My question to you is, why are you paying interest on money when you can just pay it all off? Credit Cards can carry high rates, especially all the way upwards to 24% for an average card.

    If you have $8000 on credit card debt and an average interest of lets say 20%, that's $1600 of interest a year.

    Pay it all off. What matters a lot is your DEBT to INCOME ratio when it comes to picking up larger loans, such as cars / homes, equity lines etc.

    If you have more personal questions, feel free to message me.
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Re: CREDIT SCORE QUESTIONS
Tue Jan 23, 2018 8:50 pm
  • Thanks to all that have chimed in.

    And as I tried to explain this is simply about paying off my credit card debt in the way that would best effect my credit score.

    I currently have cash on hand to pay it off 100%, all at once.

    My question more specifically is, would that be best if I’m trying to get my score closer to 750 than 700.

    I’ve had several people tell me that borrowing the 10k, then paying that loan off in 3-6 months would do the most.

    I’ve had some tell me that only paying them off to about 25-30% of my limits would be best.

    I don’t have any bad marks on my report, and as far as I can tell, the only things “hurting” my score are these.

    High % of available Credit already used.

    Age of my Credit history.
    and
    Lack of diversity in my history.

    Bottom line, I’m paying off my CC debt, I have the cash to do it, and I want to do it soon.

    I don’t mind stringing it out over a few months IF that would benefit my Score “the most”.

    Hell, I don’t even know if a 750 Score is possible for me, given my situation.

    We are fortunate enough to not have a mortgage.

    My only current debt is a car loan and my CCs.

    I’ve had 3 car loans in past 10 years, previous 2 payed off.

    All 4 of my CCs are less than 10 years old, 2 are less than 5 years old.

    If this helps, thanks for any additional input.
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Re: CREDIT SCORE QUESTIONS
Tue Jan 23, 2018 9:08 pm
  • :49ersmall: Dont worry about keeping your credit used near 30%. Pay down all but 1 card to 0. Then use the 1 card (your best rewards card) for all purchases and pay it off every month. Being under 10% credit used puts you in the "excellent" bracket for credit scores.

    I font know much about how a getting a loan to pay off the cc debt would help your score, but either way pying down to under 10% whether cash or loan will help significantly.

    Like I said earlier. Try asking for a credit line increase on your cards as well. Amount of available credit is another factor in your score.
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Re: CREDIT SCORE QUESTIONS
Tue Jan 23, 2018 9:58 pm
  • pmedic920 wrote:Thanks to all that have chimed in.

    And as I tried to explain this is simply about paying off my credit card debt in the way that would best effect my credit score.

    I currently have cash on hand to pay it off 100%, all at once.

    My question more specifically is, would that be best if I’m trying to get my score closer to 750 than 700.

    I’ve had several people tell me that borrowing the 10k, then paying that loan off in 3-6 months would do the most.

    I’ve had some tell me that only paying them off to about 25-30% of my limits would be best.

    I don’t have any bad marks on my report, and as far as I can tell, the only things “hurting” my score are these.

    High % of available Credit already used.

    Age of my Credit history.
    and
    Lack of diversity in my history.

    Bottom line, I’m paying off my CC debt, I have the cash to do it, and I want to do it soon.

    I don’t mind stringing it out over a few months IF that would benefit my Score “the most”.

    Hell, I don’t even know if a 750 Score is possible for me, given my situation.

    We are fortunate enough to not have a mortgage.

    My only current debt is a car loan and my CCs.

    I’ve had 3 car loans in past 10 years, previous 2 payed off.

    All 4 of my CCs are less than 10 years old, 2 are less than 5 years old.

    If this helps, thanks for any additional input.


    The loan may do the most for your FICO score over time, sure, but is it worth taking the loan out, hard inquiry and all? Probably not, especially if you already have one installment loan on the report at least.

    From my perspective, best course of action is just paying down your CC's immediately because your utilization is killing the score, while simultaneously paying that auto (installment) loan off. As long as you keep that utilization low in the future and don't miss payments ever EVER, your score will get up there.
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Re: CREDIT SCORE QUESTIONS
Tue Jan 23, 2018 10:13 pm
  • Paying it off all at once will not help your score as much as paying it off in 10-15% chunks will.
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Re: CREDIT SCORE QUESTIONS
Wed Jan 24, 2018 4:55 am
  • RolandDeschain wrote:Paying it off all at once will not help your score as much as paying it off in 10-15% chunks will.


    From my understanding this has no effect on revolving lines of credit, only on installment loans.

    By paying CC accounts slowly you are only costing yourself interest and slowing your progress on getting your credit score up.
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Re: CREDIT SCORE QUESTIONS
Wed Jan 24, 2018 9:14 am
  • pmedic920 wrote:
    Bottom line, I’m paying off my CC debt, I have the cash to do it, and I want to do it soon.

    I don’t mind stringing it out over a few months IF that would benefit my Score “the most”.


    I guess I don't understand why you'd want to pay interest over the next 3-12 months, rather than just paying off the CC debt if you have the cash now just to raise your credit score a little............which btw I don't think it would.

    If you have the cash, pay it off and then keep charging and paying off the bill each month, don't be late on anything and your credit score will go up over time.

    I don't understand the manipulation tactics here vs having zero debt and not paying extra interest that you don't have to?
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Re: CREDIT SCORE QUESTIONS
Wed Jan 24, 2018 10:07 am
  • Having a 720 and then going to a 750 score matters very little. You are a "A" or tier 1 client. A swing in 30 points is not going to help you get a lower interest rate on some loan.

    If it were from 680 to 710, then yeah I could see a case. But anything above 720 is great credit.

    And if you credit is still in the 700s w/ all that credit card debt, it'll rise quite a bit once you pay it all off.

    A credit score is just 1 part of the lending process, there are many other things that are looked at outside of that.

    You're in good shape. Just pay off the cards, save the interest and your score will keep going up. No need to pick up any extra loans etc and keep paying extra interest.

    I do commercial lending for one of the largest banks in the country. Rest is up to you.

    EDIT** I noticed you said you've never had a mortgage before. This isn't a bad thing. You'll still qualify for one if you ever want one. You've had car loans, which shows you can borrow and pay back.

    But you have to answer this questions for me. Why do you want your score to be at 750? Is it just to have it there or are you looking to borrow something in particular?
    Last edited by ApnaHawk on Wed Jan 24, 2018 10:12 am, edited 1 time in total.
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Re: CREDIT SCORE QUESTIONS
Wed Jan 24, 2018 10:10 am
  • XxXdragonXxX wrote:
    RolandDeschain wrote:Paying it off all at once will not help your score as much as paying it off in 10-15% chunks will.


    From my understanding this has no effect on revolving lines of credit, only on installment loans.

    By paying CC accounts slowly you are only costing yourself interest and slowing your progress on getting your credit score up.


    The only reason this would have any affect would be cause you'd want to show payments over a certain amount of time. I am speaking strictly of installments loans. Also, if you pay off loans w/ in a year of borrowing, banks lose money.

    Regarding credit cards. Slash those things man. Get a good mileage card, use it. Earn the miles. Pay it off.
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Re: CREDIT SCORE QUESTIONS
Wed Jan 24, 2018 12:49 pm
  • ApnaHawk wrote:
    Regarding credit cards. Slash those things man. Get a good mileage card, use it. Earn the miles. Pay it off.


    And for those of you dont have the cash right away to pay down multiple debts, start paying extra on the smallest debt while paying slightly above the minimum on the rest (if you have 2 debts that are close, start with the highest interest). Once youve paid that off roll the amount you were paying into the next smallest debt. Also look into getting a 0% interest on balance transfers card and transfer what you can.

    And yes, rewarda cards. I use mine to buy literally everything and pay it off at the end of the month.
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Re: CREDIT SCORE QUESTIONS
Wed Jan 24, 2018 1:57 pm
  • XxXdragonXxX wrote:And for those of you dont have the cash right away to pay down multiple debts, start paying extra on the smallest debt while paying slightly above the minimum on the rest (if you have 2 debts that are close, start with the highest interest). Once youve paid that off roll the amount you were paying into the next smallest debt. Also look into getting a 0% interest on balance transfers card and transfer what you can.

    And yes, rewarda cards. I use mine to buy literally everything and pay it off at the end of the month.


    Yep, my parent's have the cash, but always pay for trips and vacations on their rewards cards, and then pay it all off at the end of the month. Due to this, they get killer deals on hotels and flights.

    I just started doing this within the past 2 years, haven't used any rewards points/miles yet though.
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Re: CREDIT SCORE QUESTIONS
Wed Jan 24, 2018 3:28 pm
  • Random question; with the title being in all caps, is this thread the start of PMed's "old man" stage settling in?

    Food for thought.
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Re: CREDIT SCORE QUESTIONS
Wed Jan 24, 2018 3:47 pm
  • ApnaHawk wrote:Having a 720 and then going to a 750 score matters very little. You are a "A" or tier 1 client. A swing in 30 points is not going to help you get a lower interest rate on some loan.

    If it were from 680 to 710, then yeah I could see a case. But anything above 720 is great credit.

    And if you credit is still in the 700s w/ all that credit card debt, it'll rise quite a bit once you pay it all off.

    A credit score is just 1 part of the lending process, there are many other things that are looked at outside of that.

    You're in good shape. Just pay off the cards, save the interest and your score will keep going up. No need to pick up any extra loans etc and keep paying extra interest.

    I do commercial lending for one of the largest banks in the country. Rest is up to you.

    EDIT** I noticed you said you've never had a mortgage before. This isn't a bad thing. You'll still qualify for one if you ever want one. You've had car loans, which shows you can borrow and pay back.

    But you have to answer this questions for me. Why do you want your score to be at 750? Is it just to have it there or are you looking to borrow something in particular?


    I didn’t say I’ve never had a mortgage.
    I said we are fortunate to not have one.

    The 750 # was just a random # as not to be posting too much exact personal info.

    We are looking into possibly turning our waterfront condo (current primary residence) into a vacation rental.

    We would then need to shop mortgages for a new place.

    Im looking to qualify for the best possible rates, if we follow through with this idea.
    ITS A GREAT TIME TO BE A SEAHAWK FAN !
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    pmedic920
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Re: CREDIT SCORE QUESTIONS
Wed Jan 24, 2018 5:16 pm
  • As long as your fico is 720+ you have nothing to worry about. Remember, rates will depend on the market and the spread the bank wants to make. You should consult with a local mortgage lender in your area.

    Also, if you pull credit now for a personal loan to pay off debt, it will lower your score cause of a hard credit pull and it takes 2 years for the inquiry to get off your credit report.
    ApnaHawk
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Re: CREDIT SCORE QUESTIONS
Thu Jan 25, 2018 8:19 am
  • Just want to thank you all for this thread. It is very informative and educational for all of us.

    :irishdrinkers: :2thumbs: :irishdrinkers:
    R.I.P. Queen.
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    Seahawkfan80
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