RANT--Credit Cards

[Slim]

Credit cards can be a GREAT way to HELP your beacon/fico score, what are you people talking about?!?! If you have cash in your pocket to make a purchase at a store, then pull out your cc and use it instead. Then go to the bank machine/online the next day and pay that item off. Instant + on your beacon/fico. There's absolutely nothing wrong with doing this. This is an especially handy tool for those trying to increase their score, say for buying a house.


Can someone please explain to me how having a credit item removed from your credit bureau would lower your beacon/fico? That doesn't sound right at all. I've had things removed and have NEVER seen an increase. Actually, EVERYONE has items removed from their bureau. Items only stay on your bureau for so many years and are then removed after a certain time has passed. This is a naturally occurring process. If one's score lowered from this EVERYONE'S score would drop the same.


EDIT - cudos to you, jspafford, for stickin' it to the man!

 

[Jason]

Credit cards can be a GREAT way to HELP your beacon/fico score, what are you people talking about?!?! If you have cash in your pocket to make a purchase at a store, then pull out your cc and use it instead. Then go to the bank machine/online the next day and pay that item off. Instant + on your beacon/fico. There's absolutely nothing wrong with doing this. This is an especially handy tool for those trying to increase their score, say for buying a house.


Can someone please explain to me how having a credit item removed from your credit bureau would lower your beacon/fico? That doesn't sound right at all. I've had things removed and have NEVER seen an increase. Actually, EVERYONE has items removed from their bureau. Items only stay on your bureau for so many years and are then removed after a certain time has passed. This is a naturally occurring process. If one's score lowered from this EVERYONE'S score would drop the same.


EDIT - cudos to you, jspafford, for stickin' it to the man!

You are over simplifying a complex system. Using credit is how you get a good score. Overusing credit is how you get a bad score. Having no credit, is no score. Depending on what you buy and how that industry looks at revolving credit accounts you can be screwed by having a bunch of cards regardless of your beacon. For example, mortgage and car companies look heavily at income to debt ratio. If you have 4 cards with a limit of 5k each, you essentially have 20k in debt. Regardless of balance, because its available. You could get the loan and charge up to a 20k balance total the next day.

 

[tony314]

Credit cards will fry your credit score which is why I will NEVER have one. EVER. I just got a loan for a truck to build my score. Good enough for me!

 

[Jay FX4]

I have an ATM/debit card. It acts as a regular credit card in the situations I need it to. Currently, I'm content with just that.

 

[Will]

The secret to a good credit score is making money in bucket-fulls.

When you apply for a loan, the extra credit cards are just sitting there sucking up the amount of credit they feel you are able to carry. I think it's best to get rid of the number of cards and reduce the amounts you have on them to a practical limit. They want to increase your card limits to suck up as much of your viability as they can so they can collect as much of your ability to shoulder interest as they can. They don't want other companies on the tit with them.

Just live a clean life.

 

[ForOffRoadDriving]

building my truck with a credit card was probably the worst mistake ive ever made. im happy with what the money got me, but i pay almost $100 a month in interest alone. that means my $400 payment is only getting me a $300 credit which is going to take me for ever to pay off $7000.00!

 

[mhughes165]

little know fact, anyone ever hear of thos compaines that garuntee to get items removed from the credit report, well did u know u can do the same thing u pay them todo, for free online, when u sign up on free credit report.com it gives u the option to dispute the charges, and the compaines are given 30 days from the notice of dispute to respond or update the balance, more then half were taken off within the first 45 days, im down to a total owed balance of only 1500 which im paying off in payments to pay full amount not a settled amount so it looks better

 

[darkspork]

You are over simplifying a complex system. Using credit is how you get a good score. Overusing credit is how you get a bad score. Having no credit, is no score. Depending on what you buy and how that industry looks at revolving credit accounts you can be screwed by having a bunch of cards regardless of your beacon. For example, mortgage and car companies look heavily at income to debt ratio. If you have 4 cards with a limit of 5k each, you essentially have 20k in debt. Regardless of balance, because its available. You could get the loan and charge up to a 20k balance total the next day.

I'm going to have to disagree. When I applied for the loan on my Ranger having more credit cards with higher spending limits helped quite a bit. The loan officer explained that the credit card spending limits added to the current available credit I have. Considering I had no balance on any of the cards the full spending limits were available credit. I also had the current auto loan which I was getting ready to pay off which counted towards the available credit. Available credit (for me at least) helped tremendously on what I qualified for on a loan. At age 19 I had an "A" credit score and qualified for 5.75% fixed rate auto loan for 60 months (through my local credit union, with NO co-signer), this was phenomenal compared to my previous loan @ 11% with a co-signer. The advice given to me to bring my score up was use my credit cards more, and continue to pay all my bills on time since I have a short credit history.

But you are right, it is a complex system and the dos and don't s are going to vary from person to person.

 

[Jason]

I'm going to have to disagree. When I applied for the loan on my Ranger having more credit cards with higher spending limits helped quite a bit. The loan officer explained that the credit card spending limits added to the current available credit I have. Considering I had no balance on any of the cards the full spending limits were available credit. I also had the current auto loan which I was getting ready to pay off which counted towards the available credit. Available credit (for me at least) helped tremendously on what I qualified for on a loan. At age 19 I had an "A" credit score and qualified for 5.75% fixed rate auto loan for 60 months (through my local credit union, with NO co-signer), this was phenomenal compared to my previous loan @ 11% with a co-signer. The advice given to me to bring my score up was use my credit cards more, and continue to pay all my bills on time since I have a short credit history.

But you are right, it is a complex system and the dos and don't s are going to vary from person to person.

That's fine. I never heard of any finance person giving that opinion and I also happen to have worked for dealerships and know better. Spread that misinformation to the rest of the site though. I'm not going to buy it.

 

[darkspork]

That's fine. I never heard of any finance person giving that opinion and I also happen to have worked for dealerships and know better. Spread that misinformation to the rest of the site though. I'm not going to buy it.

You disagree that different things work for different people in terms of building up credit? I'm pretty satisfied with my credit score as-is.

 

[Jason]

You disagree that different things work for different people in terms of building up credit? I'm pretty satisfied with my credit score as-is.

Not on that. I disagree on your incorrect understanding of how it works. Use google my friend.

 

[baxtej44]

Not on that. I disagree on your incorrect understanding of how it works. Use google my friend.

lol as if google is the all knower....

 

[kunar]

this is directly from experian...

What factors RAISE your PLUS Score:
# You have a good cushion of available credit between your current balance and your credit limits on all open trades. This has a positive affect on your credit score. This cushion shows lenders that you are unlikely to overextend yourself financially.

What factors LOWER your PLUS Score:
# Having low credit limits on your accounts and loans counts negatively against your credit score. Having a high amount of credit is a positive factor because it indicates to lenders that other creditors have trusted you by lending you money in the past.

having credit available and being responsible enough not to use it all up is a good thing in the eyes of a lender. i dont see why some people here seem to think otherwise

 

[Jspafford]

You are over simplifying a complex system. Using credit is how you get a good score. Overusing credit is how you get a bad score. Having no credit, is no score. Depending on what you buy and how that industry looks at revolving credit accounts you can be screwed by having a bunch of cards regardless of your beacon. For example, mortgage and car companies look heavily at income to debt ratio. If you have 4 cards with a limit of 5k each, you essentially have 20k in debt. Regardless of balance, because its available. You could get the loan and charge up to a 20k balance total the next day.

The only time that has affected me is when I was trying to get a personal loan. When I applied for, and ultimately was granted the loan for my house (no co-signer) I had available to me over 100K in credit cards with 0 balances. It didn't affect it at all. Then, Like I said, 3 months later I bought the wife a car. No co signer, no problem

That's fine. I never heard of any finance person giving that opinion and I also happen to have worked for dealerships and know better. Spread that misinformation to the rest of the site though. I'm not going to buy it.

Just cause it doesn't make sense to you...doesn't mean it's wrong.

I've heard the more you have and don't use makes you look more responsible to lenders.

 

[darkspork]

Not on that. I disagree on your incorrect understanding of how it works. Use google my friend.

I'm really confused. What do you want me to google? I paid Equifax to see my credit score before I talked to the loan officer and the website showed the same information on whats hurting my score and how to help it. If there is something I'm missing that I can learn through the internets I'd like to see it...