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Is that the case though???Does your credit actually get negatively affected if an account is closed?
If the loan being late is reported to the credit reporting agencies,why shouldn't you be penalised?
Yeah your FICO score is affected because part of it is a calculation based on available credit vs. outstanding credit. If you have 10 credit cards with $100 limit and you have $50 balance on 5 of them you have $250 used/$1000 credit available so you have only 25% used. But if they close the 5 cards with no balance you now have $250/$500 changing the ratio to 50% which can lower your FICO score.
That being said the credit card companies are not in business to burnish your FICO score. In this environment if I issued credit cards I would be suspicious of sudden use of a credit card that had been inactive for a while. It could be that card user maxed out their other cards and are looking for more credit.
I find all this counter intuitive. Part of the governments concern is credit crd companies lowering credit limits on existing credit cards for people with good credit. Isn't credit what got us in this mess to begin with? Then why is the government trying to keep people hooked on credit? It seems to me the less dependent we as a nation are on credit the more stable economically we will be.
I also find it ironic that they government has a significant interest in many of the credit card issuers through TARP.
What do y'all CARE if your FICO score is reduced because YOU choose to close an account?
Why do you allow yourself to fall into the trap of worrying over a score?
The reason we are all in this mess is BECAUSE we feel the need to borrow(using a credit card is borrowing money) instead of paying for it now....if you can't buy it now then don't buy it.
Anecdotal Economics: Starve the Beasts - Start the Revolution (http://anecdotaleconomics.blogspot.com/2009/04/starve-beasts-start-revolution.html - broken link)
What do y'all CARE if your FICO score is reduced because YOU choose to close an account?
Why do you allow yourself to fall into the trap of worrying over a score?
The reason we are all in this mess is BECAUSE we feel the need to borrow(using a credit card is borrowing money) instead of paying for it now....if you can't buy it now then don't buy it.
Anecdotal Economics: Starve the Beasts - Start the Revolution (http://anecdotaleconomics.blogspot.com/2009/04/starve-beasts-start-revolution.html - broken link)
Credit is not only isolated to credit cards, thats probably what your missing. FICO scores are important when purchasing a home, taking out student loans as well as in some instances, car insurance. Believe if you want that credit cards got us in this mess, thats where your wrong. Giving someone with a 500 pt credit score a home is one of the things got us in this mess. If you have a money tree in your backyard, thats fine, but not everyone is that fortunate.
I know exactly what a FICO score is used for...my point is why do you care?
CREDIT got us into this mess....borrowing got us into this mess.
And you might want to look at the names on those credit cards and compare them to the names of the big banks....hmmmm
And making it easier for the borrower to continue to borrow is going to simply prolong the pain.
Why do you need to borrow money(use a credit card) in the first place?
Can't you afford to pay cash?
I know exactly what a FICO score is used for...my point is why do you care?
CREDIT got us into this mess....borrowing got us into this mess.
And you might want to look at the names on those credit cards and compare them to the names of the big banks....hmmmm
And making it easier for the borrower to continue to borrow is going to simply prolong the pain.
Why do you need to borrow money(use a credit card) in the first place?
Can't you afford to pay cash?
I care about my FICO score because I DO NOT HAVE A MONEY TREE in the backyard. I care baout my FICO score because I have 2 kids in college that require student loans. I care about my FICO score because i live in New Jersey which has one of the highest care insurance rates in the country.
I care about my FICO score because i for one am tired of paying someone else's mortgage and helping them with their future investment while ignoring my own.
Credit will NEVER go away which is evident from your earlier post concerning your debts. I luckily manage my finances and refuse to have any balance more than $1K. Never know when a situation will arise where i need to really use more credit.
I care about my FICO score because I DO NOT HAVE A MONEY TREE in the backyard. I care baout my FICO score because I have 2 kids in college that require student loans. I care about my FICO score because i live in New Jersey which has one of the highest care insurance rates in the country.
I care about my FICO score because i for one am tired of paying someone else's mortgage and helping them with their future investment while ignoring my own.
Credit will NEVER go away which is evident from your earlier post concerning your debts. I luckily manage my finances and refuse to have any balance more than $1K. Never know when a situation will arise where i need to really use more credit.
Care about it all you want then...
But don't expect the companies you CHOSE to have dealings with have to bend to your desires.
Why is credit so needed unless you are(like we are now doing) living beyond your means?
It is funny but I remember when there were NO credit cards...what a horrifying thought that must be to millions of people....
If people would try living within their means, there would be no problem with interest rates and fees charged. If you have a balance at the end of the month, you need to cut down on your spending.......
Banks don't charge fees if you pay off the balance at the end of each month.. If you don't pay off the bill each month, you are living too large.... Change your bad habits...
If people would try living within their means, there would be no problem with interest rates and fees charged. If you have a balance at the end of the month, you need to cut down on your spending.......
Banks don't charge fees if you pay off the balance at the end of each month.. If you don't pay off the bill each month, you are living too large.... Change your bad habits...
Actually if you pay off your balances every month....why bother with a credit card in the first place?
And I agree about changing bad habits,it is a terrible thing to know you owe tens of thousands of dollars and have little to nothing to show for it.
If people would try living within their means, there would be no problem with interest rates and fees charged. If you have a balance at the end of the month, you need to cut down on your spending.......
Banks don't charge fees if you pay off the balance at the end of each month.. If you don't pay off the bill each month, you are living too large.... Change your bad habits...
"Banks don't charge fees if you pay off the balance at the end of each month."
But they do charge a fee for the store to use their credit card...And you and I pay that fee even if we pay cash...It's built into the cost of goods that we buy..
So you are really paying a fee even if you pay off the balance every billing cycle.
Of course it's ridiculous, unfortunately it's the truth.
But, is that a banking issue, or a credit reporting issue? Maybe credit reporting methods need to be looked at..
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