Value of credit rating

   / Value of credit rating #21  
Reb,

HGM was right-on. I too learned alot about the effect a credit score has on one's life. To make a long story longer /forums/images/graemlins/wink.gif, my score was in the high 700's(over 25 yrs) prior to my divorce. After, it plummeted to the mid 500's. I made the mistake of hiring ont of those credit clean-up companys and wasted $300 i didn't have at the time. So, i began to research, learn, and watch my score as it clawed it's way back to the low 700's over a 3 year period. The facts are:

-Longer credit history is better.
-Any "over 30 day late" kills you. Over 60 days and they fill in the grave.
-Any balance over 25% of the credit limit lowers your score.
-"Soft" hits on your credit(like a card Co paying to see your score to send you an offer) do not affect your score.
-"Hard" hits(YOU applying for credit) lowers your score for 1 year each hit(and it's about 3 points...although they will not tell you that).
-If you are shopping for rates like when buying a car, and the dealer makes let's say,10 "hits" to different Co's. Those hits in a 24 hr period are supposed to only count as 1 hit( they very often are counted against you scorewise unless challenged by you).
-High debt to income ratio lowers your score.
-open accounts with zero balance raises your score(however, i was actually told once that too many of these can lower your score because of the instant availability of all that unused credit........?...)

Ok, here is where i get angry.....Let's say you have a borderline "good" score of 700. You apply for and are approved for a couple of zero interest cards to finance a project. You are given a 20K limit between the 2 cards so you max them out but faithfully pay the min payment. The Credit Co(equifax,esperian, etc) sees that you are way over their 25% guidlines, so they LOWER your score. Then they lower it again because you applied for credit that you were qualified for. Even though you QUALIFIED for the exact amount that you are using and paying properly......... /forums/images/graemlins/confused.gif

This is just one small example of how these companys have us by the short hairs. What i found is that these companys make more money off the poor sap with a lower score than they do with a guy that has a very high score. You see, the high score guy doesn't have to shop around for a good rate, but the low score guy does. They make money by selling your credit info to each inquirer. The credit card/loan companys make more money off the low score guy because they charge higher rates to cover their higher "risk". This risk factor can be real or it can be a product of an industry that has free reign to manipulate scores for profit. They also charge YOU to see your own darn score! Yes you can get a free credit report once a year, but if you want a score it's gonna cost you around $6.

I wish i knew how we let this industry wield an unbelieveable amount power with very little avenues of recourse. /forums/images/graemlins/mad.gif

I check my credit and score twice a year(yes, it smarts to pay them to see my own score) and i challenge all items that are incorrect. I em, phone, and write letters until the issues are resolved.

If you have a good score, dropping one card won't make much difference. If you have a low score, you may get denied when you re-apply for another card.

Sorry for the long post, but this one still eats at my craw!
(backing off the soap box quietly)

RD
 
   / Value of credit rating #22  
</font><font color="blue" class="small">( CC company bumps up your limit without asking )</font>

All of mine have done that over the years. And why they have the limits now at 5 times the maximum I've ever used seems a little silly to me. And what do you do if you go over the limit? While we were full time RVers, I goofed once (before the days of the Internet). That month I bought a new computer, printer, monitor, and several other things in addition to the usual expenses. I knew I was getting close to the limit on that card, but didn't care since I was going to pay it in full at the end of the month. But then I went to fill up with gas and that card was rejected for being over the limit. /forums/images/graemlins/blush.gif Only time in my life that ever happened, and fortunately I had other cards with zero balances, but of course it was embarrassing. I figured someone must have managed to get the card number and fraudulently charged something. So I immediately go home and check my records and find the limit on that card was about $500 lower than I was thinking it was; my error. So I called the credit card company to apologize, and the lady said, "No problem; I'll just raise the limit on that card and that way it'll never show that you ever went over the limit." /forums/images/graemlins/shocked.gif
 
   / Value of credit rating #23  
Credit Card limits torque me a little.

We (family) use three cards from the same institution. Wife & I use one as primary. Each of two kids at KOLLIG share one number as primary.

The four of us share one card for internet purchases. For this card, when I got it, I asked that the limit be like $3k, since we'd NEVER buy anything over that amount, even sharing the card. I figure that way, if it is compromised, the thief can't get much. (I know, I'm not liable for it anyway, but trying to be safe.) No problem, said the Company---except in the four yrs we've had it, the limit has been automatically upped! I now need to call them and bump it back down, just haven't gotten around to it yet.

Our primary card limit has bumped up enough, I could probably buy a new car with it, which is stupid.

Guess I'll add "Check card limits" to my to do list.....................

ron
 
   / Value of credit rating #24  
Ron, the summer I worked in my brother's tire dealership in Anchorage of course I rang up lots of sales on credit cards. I had one lady whose card was rejected and she insisted it shouldn't have been, so I let her call the credit card company and sure enough it was their fault, they promptly fixed the problem, and the card was accepted. But the funniest one to me was the guy who came to pick up his car and pay the bill and the first 5 credit cards he gave me were all rejected; the 6th one worked. He said he guessed his wife had maxed them all out "again". /forums/images/graemlins/shocked.gif Of course I don't know what the limits were, but I'm not sure how a person would recover from something like that. /forums/images/graemlins/laugh.gif
 
   / Value of credit rating #25  
Wow, this has been interesting. I don’t have a clue what our credit rating is because I have never put much thought into it. With the exception of a small mortgage we haven’t bought anything on credit in the last twenty years. We do use credit cards for convenience and pay them off each month. Getting a mortgage at a great rate a couple of years ago was no problem and our local bank gave us a 100k for 6 months the day we walked in, while we sold another property we had. Just didn’t think I needed to worry about the credit rating.

Now you all are saying that our rating affects our car and home owners insurance and I had no idea. I’ve seen the sites advertising free credit reports but thought it would generate a bunch of spam so I have never looked at one. What is the best way to see what your rating is without opening the door to all kinds of unsolicited advertising? We get enough credit card applications a month to keep the woodstove going without wood. /forums/images/graemlins/frown.gif

MarkV
 
   / Value of credit rating #26  
You can go to Annual Credit Report and get yours or (I think) to any of the three major credit reporting companies. I used Equifax. I think you can get the credit report free once a year, but have to pay for the credit score. I paid $39.95 in September 2005 for an 18 page report and $42.90 in August 2005 for their "3-in-1 Credit Report with Score with Equifax Credit Rankings" which was 26 pages when I printed it out. I also learned that there are apparently slight differences in the way the different companies calculate your FICO score. In August 2005, Equifax showed mine at 813, but when the mortgage company ran everything, one of the other companies had 809 and one 811, so I'm not sure what the differences are, nor why you can get the "report" from all 3 from any one of them, but only get that company's FICO score (or maybe there's a place to get all 3 scores from one place that I don't know about).

And you can read their privacy policies but I don't know how much that means, so I don't know that it's generated any spam that I wouldn't have gotten anyway.
 
   / Value of credit rating #27  
Dropping one credit card won’t hurt you. Some people are out there doing whatever it takes to get the best credit score possible. It doesn’t sound like you’re the type of family that needs to worry that much about it. If you pay your bills on time and do the right things your score will be good. We have been working with banks all winter trying to get a loan for a farm expansion. Once in 12 years of marriage my wife forgot about a sears bill and they gave us an over 30 day hit. Other than that we have not missed anything. Our score is 722 and every bank agreed that that was great. It could be higher if we played all the tricks to get it higher but banks don’t really care. As long as your rating is good you will get the good rates and qualify for the good credit benefits.

It is nice to have instances like Bird did buying the RV where the sales people don’t even worry about you’re financing. That is a huge benefit. We never used much credit until we bought our farm. Now we use it all the time to make or save money running our operation. Last year we got a grant to build a new building and road. It was a $85,000 project that we got 90% reimbursed for after it was done. We increased our spending limits and got more credit cards. At one time we had over $50,000 in credit cards plus owed my grandparents 30K. That was crazy but it worked out great and we ended up with a great improvement to our operation. Without good credit we never wood have been able to float this project.

Eric
 
   / Value of credit rating #28  
Yep, Eric, I never even gave credit ratings a thought until a little over a year ago when there seemed to be a lot of publicity about fraud, errors, etc. September, 2004, was the first time I ever even checked anything. I guess it was just the way I was raised and things I was taught by my Dad. Just as my Dad did, I always pay everything on time or early; usually early. When I was a teenager and my Dad owned an auto parts store, we got a monthly bill from our primary parts supplier, and it included a 2% discount for paying within 30 days, which we always did to get that savings. We turned around and offered the same discount to our customers and it never ceased to amaze me at the number of companies who paid their bill, but never early enough to take that discount. And we got a number of letters from our supplier thanking us for our prompt payments. /forums/images/graemlins/shocked.gif We just thought it was good business to save money. /forums/images/graemlins/confused.gif One day the district manager/salesman from our supplier mentioned to Dad that we should stock a large inventory of exhaust parts. Dad told him we agreed, and had even made a list of what we'd like to have, but just didn't have the capital to do it right now. A few days later a personal letter arrived with a personal check, in the amount Dad had mentioned to the salesman, from the owner of the company. All the letter said was that Paul told me you'd like to expand your inventory, so would you return this letter with a promise to pay me back when you can? /forums/images/graemlins/laugh.gif No interest, no payment terms; nothing but just pay me back when you can.
 
   / Value of credit rating #29  
</font><font color="blue" class="small">( I have Erie insurance and they do look at your credit score when assessing your premium.
I also learned that the more your credit rating is checked also has a bearing on your score too.
Too many open accounts can cause your score to drop also. )</font>
There are two types of checks, checks for credit and informational checks. You will find many informational checks, This is where all the jumk mail home loan people get your info, also your insurance. These info checks dont count. Only checks for credit count against you.
 

Tractor & Equipment Auctions

Electric Forklift Pallet (A50322)
Electric Forklift...
Wolverine Quick Attach Stump Grinder (A50515)
Wolverine Quick...
2013 Isuzu NPR-HD 16FT Reefer Box Truck (A50323)
2013 Isuzu NPR-HD...
John Deere 915 Flex Head (A50774)
John Deere 915...
Ezflow 500 Gravity Box W/Cart (A50774)
Ezflow 500 Gravity...
2007 Chevrolet C4500 4x4 Dump Truck, VIN # 1GBE4C3247F411826 (A51572)
2007 Chevrolet...
 
Top