DISQUS

RUDebtFree? · 5 months ago

Definitely ridiculous...

The ratio of debt to available credit is not the measure that should be rolled into your score. It should be ratio of debt to supportable debt load. If you could have more credit lines, but don't, that shouldn't count against you.

Then there is the whole "account age" thing. This is a blatantly anti-competitive criteria. I.e. Don't shop around, use the card you've got, even though they've just unilaterally changed the terms and are gouging you. Shopping around for the best credit terms is a sign of good financial management skills. Dinging someone for that is ridiculous.

mtiffany · 5 months ago

Ahhh, an individual's inalienable rights to "Life, Liberty, and the Pursuit of Happiness" alienated, perverted into a privilege, and then commodified into a number between 350 and 850. We should not be so scared of neo-conservatism ruining democracy and civil rights - the rise of neo-feudalism is seeing to that quite well.

anastasjoy · 5 months ago

What really angers me is when your credit score changes due to absolutely nothing you've done – like when they skyrocker your APR and the only way to freeze it is to close the card, so you automatically show a higher ratio of outstanding debt to credit available. This should be outlawed, as long as credit records are allowed to be used for ANYTHING.

ndtovent · 5 months ago

I've always thought that their system for determining credit ratings was bassackward. Credit card companies need to be reigned in, big time.

Jim Pharo · 5 months ago

I think we're about to find out just how poor the credit agencies ratings are. Probably worse than S&P and Moody's were of corporate America.

Asterix · 5 months ago

I'm surprised that the article didn't say that paying off your balance in full every month was bad for your credit score.

KerrynowCampau · 5 months ago

LOL! The more I read the more I expected that as well! Or that your credit score goes up the more interest you pay.....

nicho · 5 months ago

The point everyone misses is that the credit reporting agencies control your life -- and not just when it comes to borrowing.

Want a job? You need to have a credit check. Want to rent an apartment? You need to have a credit check. Want to buy a house? You need to have a credit check. Want to buy a car? You need to have a credit check.

Now, should the credit agency fuck up -- as it did to me once -- you get dinged. And, you may either lose out or have to spend a lot of time explaining it. It took me two years to get the black mark off my credit.

I had two student loans with the same bank. One month, I put both checks, with both slips into the same envelope - hey, why waste postage. The dimwit data entry person put both payments on the same account and the bank showed me as defaulting on the other. Even when the bank admitted that they had screwed up, it took forever to straighten it out and even longer for the credit reporting agencies to get the message.

Doug Sauvage · 5 months ago

I think this is a banking industry scare tactic. "Keep a balance on your cards or else we won't loan you any money.!!" I'm not fooled. Can anyone really point to a case where a consumer with a low debt/income ratio and an a history of paying on time was denied credit because they didn't keep a balance? If they were, I bet they could go to any Credit Union and recieve a better rate anyway.

Ksue · 5 months ago

Not surprising. We had a Sears card for 27 years. Used it to buy washers and dryers when necessary (3 kids and cloth diapers do a number on a washer and dryer over time). Our youngest baby just turned 21. Needless to say, the card has had a zero balance for several years now.

Guess what? They sent us a letter last year telling us that since we hadn't used it for so long, they were cancelling our card. Nice.

Houndentenor · 5 months ago

Has anyone ever been denied a job based on their credit score if they had been paying their bills on time? I doubt it. People should be concerned about their credit. But these panic attacks about credit scores and just nuts. Yes these scores matter but I have passed credit checks for jobs and rented cars (they check) and scores of other things with less than stellar credit and not very high (on purpose) credit limits. Yes your score matters when you go to borrow money, but unless you are applying for a mortgage, have an ARM (and may God have mercy on your soul if you do) or credit card debt, how much does this number going up or down a few points really matter.

Get out of credit card debt as fast as you can no matter what you have to do. Free yourself from Citibank and BofA and take your life back. Once you are in debt up to your ass you won't have to worry so much about your credit score. But as long as we are willing to spend more than we make and too impatient to wait six months to buy things we want while we save money (and the price comes down!) we are going to be slaves of the banks. Free yourself and stop worrying so much.

Alabama Blue Dot · 5 months ago

Remember, your "credit score" is not some neutral formula, but rather a proprietary algorithm, owned by Fair, Isaacs (hence FICO) and completely secret. It's interesting that the arcane rituals that have developed around "increasing your credit score" share a lot with your basic religious rituals. No one really knows what will impact your score. But the FICO score is strictly a product sold by a company.