What is Digg?85 Comments
- BassMastr, on 10/12/2007, -5/+25That's really ***** up that you get penalized for paying for everything in cash. So basically what this says to me is your credit rating is based off of how much money credit companies consistently make off you rather than if you are fiscally responsible and can actually afford the credit limit they are extending. Figures...
- MysticalRecord, on 10/12/2007, -1/+10What they mean is that you need to have some credit history to have good credit. If you've never taken out a loan or gotten a credit card or anything then you have no credit history at all, so your credit score won't be good. They aren't saying you need to carry a balance or pay the credit card companies interest or anything like that, although you do need to use your credit cards once in awhile to make sure they will continue to report you to the credit reporting agencies.
If the credit card companies are making a lot of money off of you that means you are carrying a high balance with them, and that hurts your credit score. They are definitely not encouraging you to carry a balance and let the credit companies make money off of you. If you are really smart about it and in a position to do so you can always make money off of the credit card companies instead - just use a card that gives you cash back for all your purchases and pay it off every month. - Xadrian79, on 10/12/2007, -1/+10I think they need an eighth tip, one that would have saved me a lot of headache:
8. Never get a Capital One credit card. After you pay off the balance and cancel because they wouldn't deny a charge, they might just decide to re-open the account and charge up all sorts of fees (as well as charges from the company that should have been denied in the first place). And instead of sending statements or any sort of clue that this is happening, wait 9 months and send a collections notice after you call to find out why they've started reporting 30 days late on your credit report even though you canceled the account. Then, as a special treat, they might just leave the account open no matter what you do so that they can keep adding on late and overage fees, and even if you wanted to pay the bill you're afraid to since you're pretty sure they'll just repeat everything over again.
Seriously though, does anyone think it's terrible that one company can completely screw over your entire credit history just because they feel like it? The credit system provides plenty of opportunities to screw over individuals, and it takes a lot of work sometimes to fix other people's mistakes. I've got a lawyer and piles of paperwork verifying that they've done wrong, yet I'm still fighting to just to get the account closed over a year later, not to mention the plummeting credit score. Ick. I'm baffled as to how they can actually get away with this. - AniceAtheist, on 10/12/2007, -9/+16Scottylist is right.
I've made all those mistakes. my Fico score is below 400 and have R9's on 6 accounts. (used to be a loan officer at HSBC so I know the industry)
I lease a 2005 Volvo and assumed my home two years ago (due to housing market in Calgary it's worth about 600k now with a 360k mortgage). With savings I can buy a turn-key business if I so decide to while still maintaining a healthy portfolio.
I'll state it again.
Credit scores are for poor people - inactive, on 10/12/2007, -0/+7"4) Applying for too many credit cards at once is extremely detrimental to your credit score since every time someone checks your current credit status, it leaves a ding that lasts a year. When you suddenly start applying for a large amount of credit, it sends up a red flag that you are enduring some financial trouble you are prepared for or that you are accumulating too much debt."
when i was car shopping a couple years ago, this one toyota dealer kept screwing me around on price, kept coming up with more and more stuff, kept trying to screw us, so i said told them off and stormed out, they basically lied to us about half a dozen times in 1 day on the price/financing alone.. god only knows what mightve been wrong with the car..
anyway a few days later (was still car shopping) another dealer pulled my credit and told me my credit had been checked over 30 times, all by that toyota dealer!! they were all pulled AFTER i told them off too!! so they did it just to screw with my credit score..
but i thought it went away after a month or 3 months.. not a whole year.. - BobbyOnions, on 10/12/2007, -1/+7In the UK there's no such thing as a "credit score". There are factors and history that creditors can use to assess their risk but ultimately all creditors do use is weigh up the risk factor against your ability to pay. A poor history can influence the rate you get offered, for example.
There is no single value that says you're a six, a four, a nine etc.
Just thought you'd like to know how it works here. - jbzd, on 10/12/2007, -0/+5Apply to a card from the bank where you have a checking account and apply for a visa or amex blue card, best way to start imo.
- BitSlash, on 10/12/2007, -0/+4Yes, it's as if you came up and asked me to borrow some money. I don't know you, or your past credit. In my eyes, you have no previous credit. I don't know whether or not you will pay me back.
Compare that to some one asking me to borrow some money- but I have lent them some before. They always paid me back right when the money was due. I can feel confident in this person, and will give them a higher credit score. - bergur1, on 10/12/2007, -0/+4This was really needed after a blog told you to cut up store given credit cards after the discount was received. When I get my credit card I will only use it as little as I can but still use it once in awhile to show I could pay things off.
If you are doubting whether or not you can pay it off don't do it. - ldkronos, on 10/12/2007, -0/+4Its illegal to do stuff like that, and you can sue them and easily make money off them for doing it. Personally, I'm not sure what the statute of limitations are on that sort of thing. Ask over on the forums at www.creditnet.com and they are usually more than happy to help with stuff like that.
- nepawoods, on 10/12/2007, -0/+4you can get from any on or all three here: https://www.annualcreditreport.com/cra/index.jsp
don't go to the one advertised on TV - there's a charge there. - iChris, on 10/12/2007, -0/+3It's not just Cap One, I have seen the same practice by Discover and MBNA. You can pay off your card and call the company to "close the account", but if any vendor issues a charge against your number in the future, the company happily reopens your account. If you don't get e-mail alerts or paper statements you might not know about it before the payment is due. Always check your records when closing an account and make sure there are no monthly OR ANNUAL recurring charges. When a recurring charge is submitted, presto-change-o, your account is active again!
- RyTsYdUp, on 10/12/2007, -1/+4I have some other good advice...
If you have an account that has gone to collections and they have reported you to the credit bureaus, bargain with them. Tell them that if they do not remove the collection account off your credit profile, they will not get their money. Make them send you a letter confirming this before you pay. The bottom line is, they want their money and will do what they can to get it. - etnu, on 10/12/2007, -0/+3freecreditreport.com is definitely a scam. I used their site, cancelled the auto-bill within 30 days, and they still charged me $200 the next month. I called their customer service and told them I was contacting a lawyer (complete lie, naturally), and they agreed to "fix" the "accidental charge".
I wasn't aware of annualcreditreport.com, but it looks legit (it's linked to from most federal credit information sites, so I buy it). - Philbert, on 10/12/2007, -0/+3"And finally, avoid freecreditreport.com like the plague! It isn’t free and is a complete scam."
I noticed this myself when I first heard about them a few years ago, I looked at the site and thought "what the hell, this isn't free." and never saw the site again. - SickMonkey, on 10/12/2007, -0/+2Federal Law mandates that the three reporting agencies (Experian, Equifax & TransUnion) provide consumers with a free copy of their credit report upon request every 12 months. For about $7 additional per bureau, they will also provide your credit score (which I think is well worth the expense).
Here's a link to the FTC site that details the program: http://www.ftc.gov/bcp/conline/pubs/credit/freereports.htm.
To get the three free (no strings attached) copies of your report, you can go here: https://www.annualcreditreport.com/cra/index.jsp
The one downside is they will often make it difficult to access your report by asking you technical questions about your credit history in order to verify your identity. Sometimes even small variations (that you may not even be aware of) will cause them to reject your request. Still it's a great deal and well worth the effort.
BTW, a consumer pull, while showing up on your report, does not lower your score. Only creditor pulls do that. - proxybot767, on 10/12/2007, -0/+2If someone wants to build credit history and either have bad or no history go open a savings account at a local bank. Find out what is the minimum that you can take a loan out against your cash. This will do much better than holding any credit card to increase your credit score, since there is no risk of your debt increasing. I did this for a year before i bought my house and it dropped my interest rate down a 3%.
- beatmonger, on 10/12/2007, -1/+3Get a secured card. You back up your credit line with money you already have. Kinda defeats the point, except it'll allow you to build your credit.
edit: meant as a reply to legalcondom - ben51959, on 10/12/2007, -2/+4Great advice, I will no longer cancel my credit cards!
- jbzd, on 10/12/2007, -0/+2good stuff... i had someone steal my credit card once, but got that closed right away and still made the payment within 30 days, so I guess I'm safe.
- OwdenBowden, on 10/12/2007, -1/+3It is nice to see someone from the inside letting all of the outsiders know the deal with Credit. Like it or not we are moving to a chasless society and your credit details will play even more of a roll with everything you do.
For all the Cash people out there - I agree that if you have the cash just pay with cash - but a workaround for this is to find a credit card that offers you the highest incentives (cash back, Airfare points...) and then pay with that card. Then go home and immediately pay the credit card off. This way you get the best of both worlds. - legalcondom, on 10/12/2007, -1/+3My question is how do I get a credit card at all? I'm 21 and I've never owned a credit card, every time I've applied I was declined do to lack of credit history. How the hell am I supposed to build credit if I can't even get a credit card to begin with?
- bani, on 10/12/2007, -0/+2i'd file criminal charges. i'm sure they'll close that account when police show up on their doorstep.
- kryptonson, on 10/12/2007, -1/+3Check out the book "Young, Fabulous & Broke" it changed my whole understanding and paid for itself. I highly recommend it.
- billyliberty, on 10/12/2007, -0/+2In cases such as the one you described, it's fairly easy to have those duplicate inquiries removed with a short letter or even a phone call. Typically you'll only want to dispute items contained within your report in writing, but for inquiries there is no harm with taking care of business over the phone.
That said, for any other inquiries, if you subscribe to a service that allows daily pulls, you can actually remove those "hard" inquiries from your report. For each daily pull, a "soft" inquiry is generated that eventually overwhelms the database structure for the credit reporting agency (confirmed for Transunion and Equifax) and "bumps" that hard inquiry from your report. Definitely a good way to remove some inquiries and boost your score if you're planning on obtaining a mortgage (or car loan, et cetera) in the near future. - billyliberty, on 10/12/2007, -0/+2For authorized users, most credit card companies do report to the credit reporting agencies. This is actually a good way to generate a credit score if you have a blank report and will allow you to obtain your own credit lines in the future. Just remember though, if you're an authorized user on your dad's card, anything you do not only affects your credit report, but also his.
- Thefatheroftime, on 10/12/2007, -1/+3Happened the same way for me. Called Cap One to check my current balance, then went to the computer and paid it off in full. Called and "canceled" my account. Didn't receive a statement for 3 months, as one would expect. Just happened to accidentally check this old account online and guess what? A finance charge went thru the day after I paid off the balance. (paying off the balance online makes a payment the next day. The finance charge must have beat the payment.) Three months of late fees and finance charges on THOSE late fees! Took some time to settle, but I talked them out of the whole balance. Just paid off the initial finance charge, which was $.80. I would have never caught it if I hadn't accidentally checked it online. ***** daily finance charges!
- crexor, on 10/12/2007, -0/+2its anyone in the united states now, once a year from each of the 3 major credit reporting bureus, experian, transunion/etc
- musicmantrs, on 10/12/2007, -0/+1Yeah, if your in College it isn't that hard because most companies offer free College Checking then you can get a free College Credit Card and as long as you make payments in full you don't get screwed - if you don't make the payment in full have fun with that 14%-20% interest (Wells Fargo had an awesome one, don't know if they still do).
- DaveMasselink, on 10/12/2007, -3/+4This was a pretty good read. I've just graduated and started my first real job so I was starting to wonder how I was going to keep my credit score looking good. Some of it was kinda obvious but still a must read for anyone in my situation... or anyone at all who is thinking about keeping their credit strong.
- BDCanuck, on 10/12/2007, -2/+3'Why do I need I.D. to get I.D.?
(I don't know, beats me.. beats me)
If I had I.D. I wouldn't need I.D.
(Hahahahah, that's right - that's true)"
-Mos Def, The Questions - missflibbles, on 10/12/2007, -0/+1How exactly is it your card if it's linked to your dad's account? Even if he only cosigned for you to get it, it was your dad's credit that got you that card.
- ldkronos, on 10/12/2007, -1/+2I should add that, even if the statute of limitation has expired, if it is still showing up on your credit report, you can still fight it and get it removed. Again, ask at those forums for help with it.
Finally, an inquiry has the biggest impact on your score for 6 months. There is a reduced impact from 6 to 12 months. After 12 months, it has no impact on your score, but it still remains on you report for a number of years (or until it gets bumped off by too many other, more recent, inquiries). - deesnutz, on 10/12/2007, -1/+2Wow, I didn't ever think about that. Thanks for the tips. Good read.
- cdl512, on 10/12/2007, -4/+5great advice. I have made some of these mistakes myself!
- reddevil3, on 10/12/2007, -0/+1Seconded jbzd's advice. My first card was an amex blue card when I was a sophomore...it's specifically for students. It has helped me get cards with higher limits.
- Zippo, on 10/12/2007, -0/+1scottylist, if you can afford to buy a car or house in cash, then congratulations... as for the rest of the world, we're stuck with borrowing money and building credit.
- elebrio, on 10/12/2007, -1/+2It's called a "Letter of Deletion" and its the only thing that will improve your score when paying off past debts. Believe it or not just paying off old collections on your credit will actually drop your score. You need to have the negative history completely wiped off your credit otherwise you are doing more harm than good. It sounds counter intuitive but its true.
- missflibbles, on 10/12/2007, -0/+1There's a difference between cutting up the card and closing the account. Some people will keep an account open that has no standing balance but cut up the card so they aren't tempted to use it.
- meshman, on 10/12/2007, -0/+1"Yah, but what if oyu have 3 mil cash in the bank and oy uknow the person is good for it"
This is similar to having too much credit. Just because you have 3 million in the bank TODAY doesn't mean you'll have it tomorrow. I know people with credit cards that have HUGE limits but a great payment record and low balances but they'll get turned down. The credit people say, if you have $100k in available credit and no balances, nothing says you can't spend that tomorrow and be $100k in debt instantly. That's another good tip; even if your record is spotless, too much available credit is not nessecarily good. - chetanw, on 10/12/2007, -0/+1I'm pretty much a novice at credit cards, but doesn't the card company send you a letter in the mail that says - This is your final statement.
In the past, when I didn't see this, I asked for it and kept it carefully. A letter from them which says that will ensure that the b*****ds never charge you again. - argoff, on 10/12/2007, -1/+2The only thing a person might want a credit score for is buying a car and a house. But the truth is, if you have a decent paying job and a decent down payment then someone somewhere is always going to be willing to sell you one anyhow. I know. I have no credit score at all, but when I was looking into a house they were all to happy to accept a 15% down payment out of savings. (I didn't buy because housing is overpriced and a terrible place to put your money right now) Also, anyone who can't save the few K at a time that it takes to get a decent used car, or cough up at least 15% of the down payment for a house has no business going into debt period. It is suicide, and just an accident waiting to happen. Yeah, I know an apartment is not equity, and I know houses tend to go up over time, but the truth is that wasting money on rent is far better than wasting money on interest and the same (inflationary) forces that drive up the costs of houses over time also drive up other investments that are far more safe and liquid. For anyone who has a nest egg right now, I strongly recommend skipping the credit and parking it in gold and silver. They don't do anything or even pay interest, but went up 20% and 40% last year respectively anyhow. Why? because the debt fundamentals of the US dollar are that bad and getting worse.
- sulf, on 10/12/2007, -1/+2The best option is to apply for a "secure" credit card. Basically it means that you pre-pay your credit limit (i.e. give them a check for $500 and you'll have $500 credit limit on that card). To all other organizations this credit card will appear just as a regular one. If you pay your bills on time, in a year you can upgrade your account to the regular credit card for free.
- LordJezo, on 10/12/2007, -0/+1For anyone living in NJ:
Don't forget that we are entitled to a free credit report every year thanks to some law that was passed here. - billyliberty, on 10/12/2007, -2/+3@scottylist
People that say that "credit is for poor people" are only saying so because they don't have a good grasp of financial matters (or merely possess a very bad credit score).
Wow. Generalizations are fun! - freebundles, on 10/11/2008, -0/+0if you need help building your credit score you can check here. It worked very well for me. I saved tons of money doing it myself.
http://www.ourcreditsolution.com - realestateca, on 01/03/2009, -0/+0Check out my credit repair business if you need permanent bad credit removal http://www.credit-report-repair.us
- Xadrian79, on 10/12/2007, -0/+0The major problem with Capital One as opposed to other companies I've dealt with is that Cap1 apparently has a policy of re-opening a card if ANY charges are made within 30 days of closing the account. I'm not really sure if anyone else does that, but it seems like an exceedingly dangerous policy to me. If someone gets ahold of your account number after you "close" the account, you likely would have no idea that anything is wrong until they start sending statements again. My account was re-opened due to Cap1's own annual fee, and the first time I attempted to close the account I was not informed of the 30 day policy. When I tried to resolve the situation after that, I was assured repeatedly that the account was closed for good, but a few months later started getting statements again which indicated that the account was in fact still open.
As far as actual statements, Cap1 is one of the worst I've seen. They routinely send statements AFTER the bill is due, then charge a late fee because your payment is late. I've had online payments held arbitrarily for a few extra days beyond the normal processing time and then they charge a late fee. During the past year that I've been dealing with the fraudulent charges, I've received a grand total of four statements. They actually acknowledged a problem for the fall season and refunded the fees generated for October-December, but still insist that I've been receiving statements all year.
Edit: Sorry, missed that iChris confirmed the re-opening policy with other companies. How is this legal? - eveandjin, on 02/03/2009, -0/+0fix your score as easy http://www.on-freeannualcreditreport.com/annualcre ...
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