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Old 12-31-2012, 12:06 PM
 
21 posts, read 38,980 times
Reputation: 21

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Quote:
Originally Posted by thomasdavie View Post
Creditors are not allowed to judge you on HOW MUCH you pay per month. So this idea your friend paid only the minimums and the creditors somehow know that is odd. All they would see is the payment was on time. Not the amount of each payment.

The only hit he can take is his debt to credit limit ratios. If his current balance is over 50% of the credit limit , then his score can take a hit. But only so much. I suspect around 30 to 50 points.

The only other hit he can take is how many times he applied for credit. This has long since bothered me as applying for credit is NOT a form of credit. But that is a whole other rant.

in all , high balances and high inquiries could probably drop him from a 720 to 660 or so. But once he paid off the cards his score should rebound.

Here is a good article with some sound advice as to keep your score as high as possible.

Tips for Maximizing Your Credit Score When It Counts Most - US News and World Report


Hope this helps
Thanks for this link. I checked it out. Very helpful hints there. I had no idea applying for credit lowers your score. Why is that?
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Old 12-31-2012, 02:32 PM
 
426 posts, read 1,632,374 times
Reputation: 129
Quote:
Originally Posted by buckstop View Post
Thanks for this link. I checked it out. Very helpful hints there. I had no idea applying for credit lowers your score. Why is that?
Your welcome . Hope it helped

I have no idea why they pull this stunt, other than to find ways to lower your score and charge you more interest.

They use this intelligence insulting method of stating ..........the average guy only pulls his credit twice a year
so anything over that is a red flag.

Except they FAIL to mention half the country is 65 years old and applies for credit once every 10 years. They dont actively use credit.

So if they took people who actively sought out credit and used that as an example, then it would be another story. Dont get me started on this rant.
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Old 12-31-2012, 04:50 PM
 
1,730 posts, read 3,033,610 times
Reputation: 1196
Quote:
Originally Posted by buckstop View Post
Thanks for this link. I checked it out. Very helpful hints there. I had no idea applying for credit lowers your score. Why is that?
They look at it a couple of ways, raising red flags, including: (1) Are you getting ready to take on more charge cards, with the potential to raise your loan load, and, (2) Are you having financial difficulties and are now seeking charge cards as a way to cover expenses.

That is why it is important to not just allow random accessing of your credit report. For example, if you are shopping for interest rates, those companies might pull a credit report, which will in effect negatively affect your rate. Another example, when you go to a medical/dental facility, and ask for treatment using their credit mechanism, sometimes a credit report is pulled. Say you want elective plastic surgery, and want a quote on what their financial package would be. They might pull your credit report in the process. Or, you go into a chain store, they offer a charge card and a $25 discount if you apply ... hey sounds innocent enough, why not? Because when they pull your credit report, it will show as an inquiry, so about the time you are looking to refi your mortgage, your credit score is lower.

The fact they ding your credit score is not their concern, because the info is going to be used to benefit/protect them. They are not concerned about if the inquiry negatively affects the customer.
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