USURY

[JDgreen227]

Also from the FICO web site "Have credit cards - but manage them responsibly. In general, having credit cards and installment loans (and paying timely payments) will raise your credit score."

They may say "It's a good idea to keep the balances on your credit cards low and pay them off each month. By limiting your spending, you may accomplish both!" They say this is a good idea but they don't say it will raise your credit score.

You need to keep your balances low to improve your "credit utilization ratio" but nowhere does it say a zero c.u.r. will improve your credit score, only that a high c.u.r. will negatively affect your score.

Those with no credit history of paying off installment loans are generally higher risks which lowers their scores. Just charging on the card and paying it off at the end of the month is more or less considered a cash sale and not an installment loan thereby not giving you a credit history of paying off loans.

And for those who think that canceling a credit card will improve their score, it is just the opposite. This will almost always negatively impact your credit score.

Well stated on your part, hey, I am giving you a FRIENDLY AGREEMENT HERE. Interesting point you make about paying off the card each month being considered a cash sale and not an installment loan, I never thought of it being viewed that way.

What baffles me is, when someone has multiple cards and carries a balance on them with high credit limits, versus me with a high credit limit on one card that never gets close to the balance, it seems to me the lenders would be concerned that the person with several cards could possibly charge all of them up to the limit and the holder would have a tough time paying on them. And if I always pay off my card, doesn't that show more responsibility and make me less likely to go on a huge spending spree like the mega card user has the ability to do? I can charge $20 grand at most, he could charge several times that much. To me, having fewer open accounts should mean less risk for the lenders.

 

[tallyho8]

I actually have 3 credit cards from the same bank and 1 from another bank that I use.

I have one from bank C that pays a 5% rebate on purchases from grocery stores and drugstores. Another one from bank C that pays a 3% rebate at Home Depot, Lowe's and office supply stores and a third one that I have to use once a month to get my free business checking account. They all pay 1% rebate on everything else.

The one I use from bank B pays a 5% rebate at gas stations. This lowers my gas bill about 15 cents a gallon.

I have never paid one cent of interest or fees on a credit card in my life and the last time I checked my FICO score a few years ago it was 801.

Most of what I have learned about credit scores, I learned while helping others discover ways to improve their scores. Most people with low scores can learn how to improve their score but will go through their lives with low scores due to their desired lifestyle.

 

[tallyho8]

What baffles me is, when someone has multiple cards and carries a balance on them with high credit limits, versus me with a high credit limit on one card that never gets close to the balance, it seems to me the lenders would be concerned that the person with several cards could possibly charge all of them up to the limit and the holder would have a tough time paying on them. And if I always pay off my card, doesn't that show more responsibility and make me less likely to go on a huge spending spree like the mega card user has the ability to do? I can charge $20 grand at most, he could charge several times that much. To me, having fewer open accounts should mean less risk for the lenders.

This is why "credit history" is such an important part of figuring out your credit score. A person with a history of making many installment loans and paying them all off on time is much less likely to charge all his cards to the limit and then default on payments and therefore gets a high credit score.

The bank has no way of knowing how creditworthy a person is who has never had an installment loan and no record of timely paybacks.

The person with multiple cards with a total limit of $50,000 on them who has a history of carrying a $1000 balance has a c.u.r. (credit utilization record) of 2% while a person with one card with a limit of $5000 and a history of carrying a balance of $500 has a c.u.r. of 10% and this higher c.u.r will lower his credit score.

 

[tallyho8]

My wife and I just checked our scores not long ago and I went ahead and paid for the full Experian report just out of curiosity. Our score was two points off the maximum and I was elated while my wife wondered why they docked us two points.:confused2: Just goes to show you that there are different views of everything.

A quote, "One of the most popular credit-scoring models, the FICO score, can range from 300 (very bad) to 850 (solid gold). But don't expect to see many 850s walking around.
"It's very rare to be there," says Maxine Sweet, vice president of public affairs with Experian, one of the three major credit bureaus. "I've never seen it."

And Experian has scores from 501 to 990 so your score varies widely from one reporting agency to another.

Experian has been highly criticized for it's widely publicized "free credit report.com" which usually winds up not being free.

 

[ultrarunner]

I have not checked mine in the last year... I imagine BofA terminating my HELOC had a negative impact.

BofA said it was a business decision and affected tens of thousands of California customers. Had drawn the max at one time, had a zero balance when cancelled.

Anyone in Banking know how this affects one's FICO?

As a person that routinely verified credit to determine eligibility to rent... the company would often let people with solid income history and no credit rent... the key was no credit... because, at least in the markets I worked... there were so many people with a history of bad credit it didn't leave many with good or no credit.

Everyday, 20 somethings would apply to rent and their credit report would come back with pages of charge offs... everything from charge cards, cell phone bills, jewelry stores, rent to own, car notes... anyone can have no credit... it takes effort to have page after page of bad credit.

 

[JDgreen227]

I actually have 3 credit cards from the same bank and 1 from another bank that I use.

I have one from bank C that pays a 5% rebate on purchases from grocery stores and drugstores. Another one from bank C that pays a 3% rebate at Home Depot, Lowe's and office supply stores and a third one that I have to use once a month to get my free business checking account. They all pay 1% rebate on everything else.

The one I use from bank B pays a 5% rebate at gas stations. This lowers my gas bill about 15 cents a gallon.

I have never paid one cent of interest or fees on a credit card in my life and the last time I checked my FICO score a few years ago it was 801.

Most of what I have learned about credit scores, I learned while helping others discover ways to improve their scores. Most people with low scores can learn how to improve their score but will go through their lives with low scores due to their desired lifestyle.

That is a respectable score, ours is about 780 right now. Many people argue that it is wrong for insurance companies to base premiums on credit scoring but to me, those who have good credit tend to be more responisible in other areas of their lives. A Michigan court recently ruled that insurance companies can legally use credit scores to set premiums...I support that decision.

 

[ultrarunner]

That is a respectable score, ours is about 780 right now. Many people argue that it is wrong for insurance companies to base premiums on credit scoring but to me, those who have good credit tend to be more responisible in other areas of their lives. A Michigan court recently ruled that insurance companies can legally use credit scores to set premiums...I support that decision.

When a new company was in the process of buying the company where I have worked for 19 years... we all had to reapply for our jobs... part of the package included authorization for credit and driving records... the company has no vehicles.

Anyway, the sale did not go through... I felt the process was over the top because it required listing every job with reported income since high school and clearly stated negative credit or driver license information may be cause for not hiring.

Several long time employees refused and one is currently enjoying unemployment insurance till he is eligible for retirement this year at age 62.

Oh... they also wanted High School and College transcripts???

 

[inveresk]

Do it! From now on read the credit card ageement statements sent to you. You agreed to the terms. Now when they they execute the terms of the contract your complaining. I hate to tell you but that's the truth.
Use cash and don't live beyond your means. If you do then honor the contract.
Money As Debt

As it happens, I carry no debt - no car loans, no mortgage nor any other form of debt. That wouldn't be the case if I did other than live within my means. Although at times in my youth and young adulthood I struggled financially, I've not had that problem for some years now.

On paying for everything in cash, in this day and age it's simply not realistic. It's sad but true that plastic is a necessary part of contemporary financial life.

The options today are cash, cheques, debit cards, credit cards, wire transfer, internet banking or paypal. You can't book a hotel room or reserve car hire without plastic. Cheques are being phased out. Debit cards are no good for telephone or internet purchases. Internet banking is great for companies and utilities that have regular billing but not for one-off purchases. A condition of paypal, if you don't use plastic, is that they have the facility to direct debit from your bank account. I'm even more averse to allowing third parties to dip into my bank account to remove what they think they are owed or have earned than I am of plastic.

Sure, I signed the agreement and, yes, the terms were explicit. However, that doesn't make those conditions right nor reasonable, nor does it negate my right in a free society to complain about injustice. $53 interest on a $3 shortfall is not justified whatever way you cut it. That isn't changed by what the fine print says. I believe MC knows that, which is why they were so quick to offer a refund. Refund or not, legal or not, that level of gouging warrants complaint directly to the company, to my member of parliament, to the banking ombudsman and to the community at large through forums like this.

 

[LBrown59]

I have had a Visa card issued by Chase for at least 8 years now, it is my primary card. During all those years I have only had to pay a late fee one time, and that was because my mailbox was destroyed by a snowplow and the bill blew away in the wind, but the charge was reasonable, and that was the only time I have ever paid a late fee and interest. Think it was about $27 total. I always pay off my account in full every month, but now, because of the changes in the laws, if I am one day late I get socked with a $35 late fee and my APR goes from 14% to nearly 30%.

What galls me even more is that if I am given a credit by a merchant that is applied to my balance during the period before my payment is due, I do not get credit for that as a "payment", Suppose I have a balance of $100 on my card, and a merchant gives me a credit of $99 to my balance before the $100 is due. Unless I pay them at least a dollar, I end up owing the $35 late fee and interest. Why are credits to my account not considered a payment of sorts?

I had a Mastercard I carried as a backup card, rarely used it. The card issuer told me last year they would charge me a fee of $60 a year to keep the card, and if I charged $1500 a year on it they would credit my account for the $60 fee. Bull roar. So I cancelled.

What makes me most angry about the credit card companies is that even if you have a spotless payment record going back ten years, they will c--- on you for the slightest reason. Know what I find really weird? I carry one card, which is always paid in full every month and I carry a very high credit limit that I don't get close to in a years time if I totaled up every charge I made. My wife has multiple credit cards and carries a balance on them all and pays interest on all of them...she sharges more in a month than I do in six months.

And guess who has a better credit score..she does. If that isn't a farce I don't know what is...

Credit reporting is just one big racket.

 

[chopped]

Its a shame that now aday we have to worry so much about a 'good' score.A good score is part of a lending system that no clue whatsover if people are able o pay or no.I enjoy it when they ask me my score. I I get into a daze. and ask what it is.
To each their own I guess.The car dealer gets nervious and doesnt want to sell me a car. well thats fine..probably figures that i dont have the money anyways.LOL
i just feel they should put so much bearing on the scores...But that my opinion and I know im the odd duck out here.