Then why does crap that has nothing to do with paying bills affect your credit score?

2/26/2011 10:47:57 AM

magnets

2/26/2011 10:53:43 AM

such as?

2/26/2011 10:53:57 AM

Risk factors, b.

2/26/2011 11:09:36 AM

Doodoo

2/26/2011 11:09:37 AM

I'm not black, if that's what you mean.

2/26/2011 11:40:56 AM

i had always heard that debt to income ratio affected your score

but when i bought a house, my debt to income had to go to shit

and my score went up, so who knows

2/26/2011 11:49:01 AM

Debt:income is a function of monthly obligations versus monthly income, so your mortgage prob isn't that much more than your rent had been.

2/26/2011 12:01:50 PM

It has to do with paying bills...just not utility bills and stuff. It has to do with repayment of borrowed money like loans and credit cards. The only way utilities & medical bills show up is once they are seriously delinquent and in collection.

I work in a cell phone store and always think its funny how when people sign up for a cell phone they think they are "building their credit".

2/26/2011 1:07:32 PM

Utility inquires hurt your credit score. Inquiries have nothing to do with likelihood to pay.

I was on a train in another state and a cop took my valid ticket, said it was not valid and gave me a ticket for being on the train without any ticket at all (after she took my ticket). She then forced me to sign the ticket agreeing to pay because if I did not sign the ticket she would take me to jail.

Now I have a 100point drop on my credit score because of the judgement.

2/26/2011 1:27:47 PM

^uhhh?

2/26/2011 1:50:47 PM

who cares? pay your bills and don't have anything but "good" debt and you don't have anything to worry about

my credit score is awesome and the only thing i've done to get it there is not be stupid...something so many people seem to struggle with, apparently

2/26/2011 1:54:14 PM

1) don't buy things you can't afford
2) budget if you're going to buy something you can't afford
3) good credit score

I'm AstralAdvent and i approved this message.

2/26/2011 2:08:06 PM

Legal trouble shouldn't have anything to do with consumer credit.

Quote :

"who cares? pay your bills and don't have anything but "good" debt and you don't have anything to worry about"

Yeah you do.

I also lost a lot of points on my credit for closing an account. I was mad at chase for rude customer service so I cancelled my account. My credit score is significantly lower for 7 years or however long it stays on there because of that.

2/26/2011 3:41:37 PM

Quote :

"Utility inquires hurt your credit score. Inquiries have nothing to do with likelihood to pay. "

Utility inquiries involve running a credit check, just like applying for credit (because that's sort of what you're doing, by having an upfront deposit waived). The thinking is that someone applying for lots of credit all over the place probably has fuckled up finances (you know, the people who finance a new TV on the Best Buy card for $9/month or whatever).

Quote :

"I was on a train in another state and a cop took my valid ticket, said it was not valid and gave me a ticket for being on the train without any ticket at all (after she took my ticket). She then forced me to sign the ticket agreeing to pay because if I did not sign the ticket she would take me to jail. "

I'd like to hear the other side of this story, because I get the impression that there's more to it than you're stating.

If it was legitimate bullshit, you should have just said "Fine, take me to jail." It's not like you'd be held without bond. That's kind of calling their bluff and making the system hold you accountable via due process, rather than just grabbing your ankles and taking it.

As far as a judgment and 100-pt credit score drop, I'm guessing that you then didn't pay it after signing the form saying that you would?

Quote :

"Legal trouble shouldn't have anything to do with consumer credit. "

Depends on what the legal trouble is.

Quote :

"I also lost a lot of points on my credit for closing an account. I was mad at chase for rude customer service so I cancelled my account."

Let me guess...that was an account that you'd had open for quite a while? Length of credit history is a big factor in your credit score. If you go closing your oldest credit account, it should be no surprise to you when your credit score drops.

2/26/2011 6:21:08 PM

Quote :

"The thinking is that someone applying for lots of credit all over the place probably has fuckled up finances (you know, the people who finance a new TV on the Best Buy card for $9/month or whatever)."

How should this matter as long as they pay consistently and have the healthy debt:income?

Quote :

"If it was legitimate bullshit, you should have just said "Fine, take me to jail." It's not like you'd be held without bond. That's kind of calling their bluff and making the system hold you accountable via due process, rather than just grabbing your ankles and taking it."

I would have done that except I was on my way to an important meeting for work and was already running late since I had been kicked off of the train. If I had nothing else to do, I would have went to jail with them.

Quote :

"As far as a judgment and 100-pt credit score drop, I'm guessing that you then didn't pay it after signing the form saying that you would?"

I sent a letter explaining the situation and how I didn't agree to pay(my signature was not valid since it wasn't an optional signature) and they gave me a court date which I could not meet (another state) and they made a judgement for something like 10x the amount of the ticket.

I figured they would issue some type of warrant and I would just never return there again for them to serve it. This is just an example of a foreign government taking my credit hostage to enforce a ticket that I don't agree with.

I understand they can try to find alternate means of enforcing it but using consumer credit for something like this is completely inappropriate.

Quote :

"Let me guess...that was an account that you'd had open for quite a while? Length of credit history is a big factor in your credit score. If you go closing your oldest credit account, it should be no surprise to you when your credit score drops."

The credit history didn't go away though. Its still on my report that the account was never late and how long it was open for. The fact that that specific account is now closed should not hurt my credit score. Just sounds like a rule that was put in interest of the credit card companies keeping their ability to make money off of fees from people who they can't collect interest on.

Bottom line is my credit is actually perfect but around 150 points shy of a perfect score because of things that have absolutely nothing to do with my consumer history, debt, ability to pay or likelihood to pay.

2/26/2011 6:39:11 PM

Quote :

"How should this matter as long as they pay consistently and have the healthy debt:income?"

because maybe you are on the way down and taking out a lot of debt to try to save yourself? duuuuuuuuuh.

Quote :

"I sent a letter explaining the situation and how I didn't agree to pay(my signature was not valid since it wasn't an optional signature) and they gave me a court date which I could not meet (another state) and they made a judgement for something like 10x the amount of the ticket. I figured they would issue some type of warrant and I would just never return there again for them to serve it. This is just an example of a foreign government taking my credit hostage to enforce a ticket that I don't agree with. "

At any point did you hire a lawyer? No? THEN YOU FUCKED UP.

Quote :

"I understand they can try to find alternate means of enforcing it but using consumer credit for something like this is completely inappropriate. "

I know, using consumer credit to show that you didn't pay something that you legally agreed to pay is bullshit.

Quote :

"The credit history didn't go away though. Its still on my report that the account was never late and how long it was open for. The fact that that specific account is now closed should not hurt my credit score."

No, but its effect on the calculation certainly changed things...
http://credit.about.com/od/creditreportscoring/qt/closecardscore.htm

Quote :

"In short, your credit score could be affected by closing a credit card if * The card still has a balance. * It still has available credit when your other cards don't. * It was the first card you ever opened (though this won't matter for about 10 years) * You don't have any other credit cards "

sounds to me like you just don't understand how the shit is calculated. You didn't get dinged simply for closing it. You got dinged because of what closing the account did in concert with other factors.

2/26/2011 7:18:38 PM

None of my other cards have balances and I have plenty of other credit so why does the "first card I ever opened" hold some type of "golden value" even though I opened my second and third cards a few months later?

Quote :

"sounds to me like you just don't understand how the shit is calculated. You didn't get dinged simply for closing it. You got dinged because of what closing the account did in concert with other factors."

I understand exactly how it is calculated and that is my problem. My problem isn't my score, its how my score, and everyone else's is calculated using factors that have nothing to do with the purpose of the credit score.

Quote :

"At any point did you hire a lawyer? No? THEN YOU FUCKED UP."

Hiring a lawyer would have cost me extra money. This is abuse because I have to either miss work or pay a bunch of extra money just because some cop in a foreign state wrongfully abused their power.

Quote :

"I know, using consumer credit to show that you didn't pay something that you legally agreed to pay is bullshit."

This was not a consumer issue. This was a legal issue. Technically its something like trespassing? I was accused of illegally being in a public place. That has NOTHING to do with consumer credit.

I would understand if they tried to lock me up but taking my credit hostage is an abuse of power.

2/26/2011 7:38:15 PM

Quote :

"Yeah you do. I also lost a lot of points on my credit for closing an account. I was mad at chase for rude customer service so I cancelled my account. My credit score is significantly lower for 7 years or however long it stays on there because of that."

how did you not know better? had never heard that you shouldn't close accounts? perhaps in your situation you felt like you should not be penalized for their poor customer service, but the hit in credit exists to keep people from opening and closing accounts too regularly...it hit your credit so significantly because you had virtually no credit as a basis and as such, your decision weighs more heavily against you than it would for, say, a 40-year old who did the same thing

2/26/2011 7:43:06 PM

Quote :

"but the hit in credit exists to keep people from opening and closing accounts too regularly..."

Which is stupid as fuck. It shouldn't matter where my line of credit is from only that I've maintained a certain amount of credit over some time period.

I had the same shit happen to me. Had a 31.6k limit on Wachovia card and they started fucking around with online statements and due dates. I canceled it, my scored dropped from the 780s to the 720s.

I also think it's stupid that the credit card companies want you to use the shit out of their cards but then can't make a distinction between what is actual revolving debt and what gets paid off at the end of the month. I refi'd my home last November and because my recent statement had a few big purchases on it my DTI looked bad...where-as had I been just paying that with a debit card direct from my bank my DTI would have looked glorious. Because of that, I had to fork over a few more hundred dollars in closing costs to get the rate I wanted.

Fuck Fair Isaac with rusty fence post.

Quote :

"had never heard that you shouldn't close accounts?"

And anyway, it's counter intuitive as fuck that reducing your available credit means you're a higher credit risk? No really, read it again. Let's assume I have a 150k lines worth of credit that I'm about to use to gamble on a business venture but I decide I need to move to a new location and I want to buy rather than rent when I get there. Do you mean to tell me I look like a better risk to the bank than if these lines were vastly smaller?

Again, Fuck Fair Isaac. This time after having it's neck Iron Maiden'd.


[Edited on February 26, 2011 at 7:51 PM. Reason : .]

2/26/2011 7:47:41 PM

Quote :

"None of my other cards have balances and I have plenty of other credit so why does the "first card I ever opened" hold some type of "golden value" even though I opened my second and third cards a few months later?"

That specific card holds no "golden value." But closing it may certainly have changed your debt:credit ratio...

Quote :

"Hiring a lawyer would have cost me extra money."

And NOT paying it didn't cost you money, either?

Quote :

"This was not a consumer issue. This was a legal issue. Technically its something like trespassing? I was accused of illegally being in a public place."

For which you were assessed a fine. Which you did not pay. BAM!, credit.

Quote :

"And anyway, it's counter intuitive as fuck that reducing your available credit means you're a higher credit risk?"

Well, yes and no. Yes, you have less credit, and thus less on which to owe. But one could also look at it as saying that you have less wiggle room with less credit.

2/26/2011 7:59:49 PM

^^ no, a person's apparent inability to keep a consistent line of credit is what hurts their score

you can hate it or not, but no one MAKES you have a credit card and you can always choose to simply stop using it and keeping the account open

y'all can bitch about it as much as you want, but i figure that if i can manage to have an awesome credit score, MOST other people can, too (obviously, there are some unavoidable/unforeseeable situations that lead to a decrease in credit rating)

in any case, we all know better, so if you choose to do the things that will harm your credit anyway, it's your own fault...or perhaps i'm just lucky in that i've only rarely "needed" a loan or credit card

[Edited on February 26, 2011 at 8:01 PM. Reason : .]

2/26/2011 8:00:19 PM

See, I just think it's unsafe to have open lines of credit with no balance. Yea, I can freeze my credit so companies can't ping me, but someone could still potentially hack in and spend a bunch on my card. Then I have to deal with that issue. It's shit I'd rather not have in the back of my mind.

My belief is that you shouldn't buy something unless you can pay for it - with exceptions (buying a home/car). But the glorious credit industry makes that nearly IMPOSSIBLE to accomplish since *not* having credit lines means you're somehow a moron with money and can't be trusted with a loan.

2/26/2011 8:05:35 PM

i work in lending...i look at credit reports all day. and i can say that the hit your credit report will take as a result of credit inquiries is massively overstated. no one can completely explain how credit scores are calculated, but i have seen no significant impact from lots of credit inquiries, especially if they are all around the same time. this can simply indicate that a customer is shopping for the best rate. (although, tons and tons of inquiries typically point to lots of denials, presumably causing the hit in your credit.)

2/26/2011 8:15:31 PM

my wife and i use our discover card for EVERYTHING that we can...never paid a single cent in interest or fees, and we have almost $800 in cashback...we can cash that out or get a MINIMUM of 120% in the form of gift cards (lowe's is the one we're looking at right now)

cruises and places like sandals resort double the value so that $800 is worth $1600 if we choose to use the cashback to take a vacation

heck, man, i love credit cards

[Edited on February 26, 2011 at 8:33 PM. Reason : my REI visa is my personal card, which is also awesome given how much i spend at REI]

2/26/2011 8:33:02 PM

Now theres some shit on my credit for 1000 dollars that I know nothing about. Some shit from oregon a state i've never been to about phone charges and theres no way out of it for me. Basically, anyone that wants some money can basically take someone who is trying to buy something and must have good credit, take their credit hostage and get the money because the hassle will cost them more money. This is complete bullshit and now I have to give some random people 1000 dollars to not end up losing 10k from having bad credit.

4/28/2011 1:24:55 AM

Quote :

"theres no way out of it for me"

who the heck is your credit card company?

I've had charges show up that weren't mine on two different cards in the past 10 years and both times I really didn't have a big problem getting them dropped and just getting a new card sent. However, both cases involved me being proactive and notifying the company within a couple days of the charge.

I will agree that the credit rating system can be extremely stupid at times, but it is also very easy to have an excellent score.

4/28/2011 8:21:49 AM

Quote :

"I've had charges show up that weren't mine on two different cards in the past 10 years and both times I really didn't have a big problem getting them dropped and just getting a new card sent. However, both cases involved me being proactive and notifying the company within a couple days of the charge."

my REI visa (US Bank) has been compromised twice in the past 2 years...the first time, the bank notified ME by calling and asking about some strange charges...the second time, i noticed purchases from orvis (the fishing company, i think) and called them up

the first time was obviously bogus, as the delivery address was in washington state or something...the second time, apparently, the delivery address was MY address, and i know for a fact that i didn't order anything (i don't really fish)...i had called up orvis first and made them aware of the situation and then called US bank

in both cases, they credited me back the money immediately and began investigations...in the end, the made the credits permanent

4/28/2011 8:52:12 AM

Had a fraudulent charge pop up on a credit card I only use for emergencies. FIA took it off without a fuss

Paypal on the other hand has been a bag of dicks about resolving the issue

4/28/2011 8:54:40 AM

Quote :

"but i have seen no significant impact from lots of credit inquiries,"

I would say this is absolutely wrong. I shopped around to do a refinance at a 15yr loan about a year ago. However the lender, Bank of America, established one set of terms in the beginning before I consented to a credit check and then the fees radically changed as the process continued. I was never able to get a hold of the broker and the paperwork specialist lost parts of my paperwork at least 3 times. Needless to say I just said screw it and focused on other things instead. Needless to say my credit score dropped over 50pts. That makes the difference between a 720 and 650, which is huge.

Sure we all know the games of how scores are calculated, but I have to agree with those above that the calculations are not indicative of how likely you are to pay off you debts and how much of a risk you are.

4/28/2011 9:11:37 AM

70 pts just from having a lender run your credit check for a potential refi on a mortgage? I think my average dropped about 10 pts after shopping around for the mortgage and has since gone up about 40 after the mortgage.

Granted I don't know how it all works in extreme detail and mine was shopping for a brand new mortgage but 70 pts sounds enormous just for shopping around for a refi.

I will say that lots of inquiries does affect your score, but usually to the tune of 5-15 per inquiry for credit cards, bank accounts, store lines of credit etc. Mortgages seem to be 10-20 from people I've talked to, but also remember that for mortgages it is not supposed to be a "per" inquiry, because if you are shopping around within a short period of time it is understood that you will have multiple inquiries related to that and it generally only counts once. Mine only dropped 10 after having my credit checked by 3 different banks.

[Edited on April 28, 2011 at 9:43 AM. Reason : .]

4/28/2011 9:40:10 AM

Sorry it was 50pts. I stated 50, but the math I did was 70. I dropped from a 720 to 670.

But, I agree, the point drop was insane.

4/28/2011 9:42:53 AM

Yeah that definitely sucks. :/

4/28/2011 9:43:58 AM

In September we got a new apartment, utilities, car loan, and internet. Dropped credit score by 60 points even though I've never missed a payment in my life

[Edited on April 28, 2011 at 9:48 AM. Reason : R]

4/28/2011 9:47:48 AM