Forums > Social Chat > Something you should know about your credit...

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ViciousVixen
member
Location: Oklahoma City, OK, USA
Member Since: 25th Aug 2002
Total posts: 103
Posted:(I'm not sure about how credit works in other countries, so this is mainly a post for HOP members in the U.S.)

Did you know...

Having lots of credit cards, even if they have zero balances on them and you always make your payments on time, lowers your credit score. Close your department store credit card accounts now, before you need to get a loan for a car or something else.

Your credit score is lowered every time a company checks your credit score and does not issue credit, so don't apply to lots of stuff if you know you have bad credit or if you're just starting out. Checking your own credit score does NOT lower it, so check it as often as you need or want to.

I found these tips at CarBuyingTips.com and I highly recommend that everyone reads through all that this website has to offer. The best part about it is the info is ALL FREE.

There were so many things in there that I didn't know before, especially about credit. Whether you're looking to buy a car now or many years from now, go read it. There's a lot of really useful info on that site. If you don't know these things, you might be losing out already, or setting yourself up for bad times later on.


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flid
flid

Carpal \'Tunnel
Location: Warwickshire
Member Since: 27th Aug 2002
Total posts: 3136
Posted:quote:Your credit score is lowered every time a company checks your credit score and does not issue credit, so don't apply to lots of stuff if you know you have bad credit or if you're just starting out. Checking your own credit score does NOT lower it, so check it as often as you need or want tochecking your own score doesn't, but a company checking does? Surely when you check you use a company to get it for you? I'm not getting the logic.

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Benjamin
member
Location: Louisville, KY
Member Since: 10th Sep 2003
Total posts: 39
Posted:Someone told me that last year.... unfortunately I had already applied for like 20 different credit cards on campus for things like free t-shirts and free food, etc... all those things that they'll give stupid college students for applying... hehehe. Oh well, Damn the Man

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ViciousVixen
member
Location: Oklahoma City, OK, USA
Member Since: 25th Aug 2002
Total posts: 103
Posted:quote:Originally posted by flid:
checking your own score doesn't, but a company checking does? Surely when you check you use a company to get it for you? I'm not getting the logic. I don't get how it works exactly, but I understand why. If I was unable to check my own credit score without lowering it, then I would not know what is on my credit report, and that could damage my credit further if there are errors on there, or a company illegally checked my score without offering credit, or if something that should have been removed from my report wasn't removed. So we have the right to check our own credit without lowering the score so that we can ensure its accuracy. But how they distinguish between you checking your own credit and some company checking it I don't know.


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Charles
Charles

Corporate Circus Arts Entertainer
Location: Auckland
Member Since: 27th Jun 2001
Total posts: 3989
Posted:Ok...lets see the proof!

quote: Someone told me that last year I know this may not apply to the US, but I find it hard to think that these systems would be dramatically different in other countries.


As an ex-banker, in NZ, credit checks are GOOD for your credit rating if they aren't declined.

Someone who has applied for 15 credit cards, has had each application approved but decided not to get said CC will be in a better credit position than someone who hasn't applied for anything.

I could be wrong, but I think you guys are getting confused with HAVING credit as opposed to APPLYING for credit.


I would be very hesitant to give a loan to someone with 12 credit cards with a $1000 limit on each.

The opportunity for them to go from owing $0 to $12,000 in less than a month is kinda scarey...


But feel free to put me in my place...


HoP Posting Guidelines
* Is it the Truth?
* Is it Fair to all concerned?
* Will it build Goodwill and Better Friendships?
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ViciousVixen
member
Location: Oklahoma City, OK, USA
Member Since: 25th Aug 2002
Total posts: 103
Posted:Well yeah, "if they aren't declined" being the key words there. I specifically said "if you have bad credit or are just starting out", meaning people who are apt to be declined.

I also specifically said if a company checks your credit score "AND does not issue credit", which doesn't include applying for credit many times and being offered credit.

In addition, I specifically said "department store credit cards" not meaning ALL your credit cards. Yeah you need to apply for and have credit, just not too much of either. I have a Visa, Mastercard, and Discover which I am keeping open, and one store credit card, but the rest I am closing.

Does that clarify things?


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Charles
Charles

Corporate Circus Arts Entertainer
Location: Auckland
Member Since: 27th Jun 2001
Total posts: 3989
Posted:Well...not really, a CC is a CC. doesn't matter if its a department store or a VISA.

quote: Having lots of credit cards, even if they have zero balances on them and you always make your payments on time, lowers your credit score. This is incorrect. Having all those CC's are not bad for your credit rating itself. If anything, it's positive becuase you will have a number of acceptances, to get the CC's in the first place.

It's something that is entirely up to the company issuing further credit as to whether it is bad or not.

They see the information, which is presented in a completely unbiased manner, and then make a personal decision.


A better way to make your credit history look good is to start with small things, like overdrafts at the bank, and build-up a history of regular payments and non-defaults.

As always, don't bite off more than you can chew. If you earn $X a month, then don't spend 0.5 x $.X on a car or holiday on credit. Put it in the bank until you have enough.


The most important thing you can do is to AVOID defaulting. As these are the key reasons people get declined in the future.


HoP Posting Guidelines
* Is it the Truth?
* Is it Fair to all concerned?
* Will it build Goodwill and Better Friendships?
* Will it be Beneficial to all concerned?

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BigDav
BigDav

member
Location: Derry, N. Ireland
Member Since: 20th Jul 2003
Total posts: 175
Posted:if you check your own credit score, you actually check it with the companys that store your credit score details. You pay 2 (well thats what it is in the UK) and they post you out a list of all credit in your name. I got mine a couple of months ago and noticed that my credit rating had loads of stuff to do with my mum and dad. Their mortgage and car loan was showing on it although it didnt affect my credit rating as i just bought a house with no problems.

ANyway the moral of this story is that you only get a bad credit if a CC company does the credit check. When you check yours you are not actually doing a credit check, you are just recieveiong a copy of what they have on their records which is available under the Data Protection act 1996 ( i think thats the right year)


Be Good, and if you DONT be Good, Buy a Pram!

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flid
flid

Carpal \'Tunnel
Location: Warwickshire
Member Since: 27th Aug 2002
Total posts: 3136
Posted:yea, i can see how if you apply for your credit under data protection act that it wouldn't affect it, but i've got friends who've gotten their credit by paying a website to get it for them, in which that is a company running a check on their behalf.

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Dom
Dom

Carpal \'Tunnel
Location: Bristol, UK
Member Since: 19th Dec 2001
Total posts: 3009
Posted:As someone's who's had quite a few credit cards and owes a ton of money on them I can tell you this: banks love me!!! As long as I'm not bankrupt and I can pay the minimum amount off each month then the limits keep on rising and the offers of pre-approved new cards flood in.
Luckily I know what evil things credit cards and loans are and am now trying to avoid their further use unless really necessary.


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