Makes sense right? The creditors is their primary customer and by encouraging customers to borrow and keep em, helps out creditors heh…”

Maybe, but if you were the creditor, whom would you rather lend your money? Higher profits and high interest rates from those who take their time repaying are nice, but high profits come with higher risk. Especially now, when even credit cards who make money on people who carry a balance are “bribing” some of their supposedly most profitable customers – those with large balances – to just pay off the loans and go away, it seems that every lender is worried more about ability to repay than higher profit margins. As to landlords, insurance, employers – they are only interested if you are responsible not how many different types of loans you have. I would really be curious as to the explanation because it doesn’t make any sense to me.

Maybe the Fair Issac peeps are in bed w/ the creditors.

Makes sense right? The creditors is their primary customer and by encouraging customers to borrow and keep em, helps out creditors heh…

Why isn’t FICO run for non-profit? More trustworthy then right? oy…

An analysis of my credit score says that I’m being penalized for not having any installment debt – only a mortgage & revolving debt (credit cards).

I’m floored that it’s a bad thing to pay off a loan early and not have any loans open. I’m willing to do a lot to improve my credit score, but I draw the line at taking out a loan I don’t need!

1. Why does Fair Isaak penalize people for paying off their mortgage?
One of the factors is the “variety” or how many different types of accounts you have. This means that if you paid off student loans years ago, paid off your mortgage, bought last car for cash or maybe paid off the loan, don’t need home equity loan, then your only credit line comes from credit cards. Hence – no variety.

Now, if I were to lend money to someone, I’d feel more comfortable lending to someone with money and little debt than someone with a huge mortgage. Yet Fair Isaak seems to think that someone who still owes money on a house is a better risk than someone who paid off the mortgage? Doesn’t make sense to me.

This brings me to my second question:
2. Why can’t closed accounts be included into the score?
This would resolve the problem above: someone who paid off a mortgage would have different kind of loans because of past history.

It’s not like the historical information is erased. When I get a full credit report, all the past information is still there, all the way up to the time I had my very first loan. So what logic our dear Fair Isaak uses in ignoring past history?

One of the parts

Our (husband and I) credit score is over 800 and yet, my credit card companies started adjusting our rate. I decided to get a signature loan from the credit union to pay off our balance and get away from the credit card company. I plan to close the credit card because it is a rewards card with an annual fee of $50. I don’t think it is worth paying $50/year just to avoid a drop in our score, do you?

Once you pay them off, why not keep several cards, use each card once a month and pay the balance in full each month.

I have my newspaper on one card, my monthly alarm charge on another and a third card that I use for other monthly charges. I never charge too much, and pay them off each month.

I’ve been recovering from a bankruptcy almost 10 years ago, which was caused by my ex-husband’s business debt (community property state). This credit card strategy has done wonders to rebuild my credit.

I can do this indefinitely, use the cards to maintain my rating and never really be in debt.

With that back ground, is it better to use 1k of my 2k credit limit each month, or is it better to request the increase and take the temporary credit score hit?

How long before the score goes back up to the pre-pull level?

Thanks a ton.

-SAH

I have a substantial amount of credit card debt, several on 0% cards where I only pay the 3% transfer fee.

I always pay more than the minimum due and am never late.

My newer cards are maxed out, but older ones are down to about 70% utilization.

I have some cash to pay down approx. 20% of my outstanding credit card debt.

Should I apply to the cards where 0% expires soonest and the rates then go up higher, or pay down each card a little bit so that the % utilization on each card is lower?

Do they look at the % utilization on each card or sum it across all cards and look at % utilization over all available credit?

Thanks,
Christy

It amazes me that one stupid mistake I had in college cost me so much when I went to buy a house.

It’s never to early to start managing your credit.

Such high reaching impact.