Comments on: No credit score shouldn’t equal a bad one http://sensetosave.com/2009/04/07/no-credit-score-shouldnt-equal-a-bad-one/ Wed, 08 Feb 2012 18:56:32 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Revanchehttp://sensetosave.com/2009/04/07/no-credit-score-shouldnt-equal-a-bad-one/comment-page-1/#comment-40506 Revanche Fri, 24 Apr 2009 23:58:22 +0000 http://sensetosave.com/?p=1137#comment-40506 Re: Liz and Jenny, and carrying a balance.I'm in agreement with Rachel.What is important is not carrying a balance but what your credit card company is reporting as the highest usage.I check my credit score and report every couple of years to make sure there aren't any discrepancies because there was a card opened in my name w/o my knowledge 7-10 years ago. On it, the length of history and "paid on time" is marked for each month that is applicable. There's nothing on there about whether or not I carry a balance.The common variable appears to be whether or not your CC company reports your highest balance when the statement closes. Some companies don't report your highest usage when you don't carry a balance, but that's not to say you must carry a balance in order for any of them to report your actual history. If they're not reporting the highest balance ever reached, I would suggest calling them to request that they do. They might, they might not. But don't feel pressured to pay them interest just so that they'll report a good history for you!Bethany -- depending on your bank, you might be able to convert your debit card into a debit/credit card. Of course, use it the same responsible way, but this card should create a history. And that dodges the application bullet, usually. My banks used to convert my cards to rewards cards at the drop of a hat, but you probably have to ask now.It might be worth opening a free checking acct and getting the associated card if your bank doesn't offer this alternative. ING Electric Orange, perhaps? I know they just rolled out a promotion where you can get a free $25 for using their card 3x within 45 days, too. I haven't looked into that too deeply but I'm pretty sure their card is a rewards Mastercard card. Re: Liz and Jenny, and carrying a balance.

I’m in agreement with Rachel.

What is important is not carrying a balance but what your credit card company is reporting as the highest usage.

I check my credit score and report every couple of years to make sure there aren’t any discrepancies because there was a card opened in my name w/o my knowledge 7-10 years ago. On it, the length of history and “paid on time” is marked for each month that is applicable. There’s nothing on there about whether or not I carry a balance.

The common variable appears to be whether or not your CC company reports your highest balance when the statement closes. Some companies don’t report your highest usage when you don’t carry a balance, but that’s not to say you must carry a balance in order for any of them to report your actual history. If they’re not reporting the highest balance ever reached, I would suggest calling them to request that they do. They might, they might not. But don’t feel pressured to pay them interest just so that they’ll report a good history for you!

Bethany — depending on your bank, you might be able to convert your debit card into a debit/credit card. Of course, use it the same responsible way, but this card should create a history. And that dodges the application bullet, usually. My banks used to convert my cards to rewards cards at the drop of a hat, but you probably have to ask now.

It might be worth opening a free checking acct and getting the associated card if your bank doesn’t offer this alternative. ING Electric Orange, perhaps? I know they just rolled out a promotion where you can get a free $25 for using their card 3x within 45 days, too. I haven’t looked into that too deeply but I’m pretty sure their card is a rewards Mastercard card.

]]> By: Bethanyhttp://sensetosave.com/2009/04/07/no-credit-score-shouldnt-equal-a-bad-one/comment-page-1/#comment-39447 Bethany Thu, 09 Apr 2009 06:50:14 +0000 http://sensetosave.com/?p=1137#comment-39447 I'm Kacie's friend B. All of these responses are awesome! I'm blown away by how many people have been in the same situation and have such great advice. This might get lengthy -- I want to respond to it all. :-) I've been turned down for every credit card I've applied for, but I haven't tried a Capital One card yet -- I've heard those are quite easy to get. Granted, I haven't been at it for that long (just 6 months or so), but I think it's 5 months too long, you know? Most recently, I was turned down by Target, which I was certain (for whatever reason) I'd be a shoo-in for, as it was a store-only card for a discount chain. I'm pretty sure now that a credit card isn't the way into the credit game for me, especially with the economy as it is. Family members keep reminding me that companies are getting tight with their credit and it's a bad time to be getting into the credit game -- but what else can I do? I doubt I'll be in the market for a mortgage anytime soon, but there's no good reason to wait for a big purchase to deal with the you-need-credit issue, because I'm sure buying a home is stressful enough. Sidd Finch -- it sounds like you were in the exact same boat as I am! Although it's nice to know I'm not alone, it isn't fun at all and I'm sorry it happened to you and the other commenters, too! Rachel, Kasey, and AnnMarie -- someone else recently brought secured loans from a credit union to my attention and my mom keeps mentioning the possibility of small loans as a good choice. I belong to a credit union back home (Indiana) and have been considering moving my money to one where I live now (Hawaii), because I don't like my bank (I was raised with a local credit union and love them). This may be the next thing I try. Megan -- I do have a debit card (I've had one since I was 16) and have always used them responsibly. But they don't show up on your credit report (unless you overdraw, probably -- how fair is that?). I use my debit card easily with Enterprise Rent-a-Car (they're the only agency I've found that doesn't run a credit check when they run your debit card), and the amount they hold isn't very much. I think it might be $300 or $350, depending on the branch location, and they credit the balance once you return the rental. I rent exclusively from them now, just for that reason. Jenny -- I totally agree! I've said almost the exact same thing lately, that I need to waste my money (on interest, fees, unnecessary large purchases, etc) just to prove my responsibility with it. That's not fair.I'm sure I could respond to all of the comments and suggestions, but I don't want to write a novel on here. :-) Thanks for all the suggestions and encouragement! I'll check back later and see if anyone else has more advice. It's sad that parents can do too good of a job teaching their kids about credit. Mine were in a lot of debt for most of my growing-up years and didn't want my brother or me to end up in their situation. I'm so thankful for their advice and warnings, but the way the credit industry is set up, they just don't reward people for being responsible like that. My mom and I have laughed about it a lot lately. But I'm still glad I followed her warnings and didn't get a card in college and use it unwisely.Also, a big thank you to Kacie for highlighting my situation! You're the best! I’m Kacie’s friend B.
All of these responses are awesome! I’m blown away by how many people have been in the same situation and have such great advice. This might get lengthy — I want to respond to it all. :-)
I’ve been turned down for every credit card I’ve applied for, but I haven’t tried a Capital One card yet — I’ve heard those are quite easy to get. Granted, I haven’t been at it for that long (just 6 months or so), but I think it’s 5 months too long, you know? Most recently, I was turned down by Target, which I was certain (for whatever reason) I’d be a shoo-in for, as it was a store-only card for a discount chain. I’m pretty sure now that a credit card isn’t the way into the credit game for me, especially with the economy as it is. Family members keep reminding me that companies are getting tight with their credit and it’s a bad time to be getting into the credit game — but what else can I do?
I doubt I’ll be in the market for a mortgage anytime soon, but there’s no good reason to wait for a big purchase to deal with the you-need-credit issue, because I’m sure buying a home is stressful enough.
Sidd Finch — it sounds like you were in the exact same boat as I am! Although it’s nice to know I’m not alone, it isn’t fun at all and I’m sorry it happened to you and the other commenters, too!
Rachel, Kasey, and AnnMarie — someone else recently brought secured loans from a credit union to my attention and my mom keeps mentioning the possibility of small loans as a good choice. I belong to a credit union back home (Indiana) and have been considering moving my money to one where I live now (Hawaii), because I don’t like my bank (I was raised with a local credit union and love them). This may be the next thing I try.
Megan — I do have a debit card (I’ve had one since I was 16) and have always used them responsibly. But they don’t show up on your credit report (unless you overdraw, probably — how fair is that?). I use my debit card easily with Enterprise Rent-a-Car (they’re the only agency I’ve found that doesn’t run a credit check when they run your debit card), and the amount they hold isn’t very much. I think it might be $300 or $350, depending on the branch location, and they credit the balance once you return the rental. I rent exclusively from them now, just for that reason.
Jenny — I totally agree! I’ve said almost the exact same thing lately, that I need to waste my money (on interest, fees, unnecessary large purchases, etc) just to prove my responsibility with it. That’s not fair.

I’m sure I could respond to all of the comments and suggestions, but I don’t want to write a novel on here. :-) Thanks for all the suggestions and encouragement! I’ll check back later and see if anyone else has more advice. It’s sad that parents can do too good of a job teaching their kids about credit. Mine were in a lot of debt for most of my growing-up years and didn’t want my brother or me to end up in their situation. I’m so thankful for their advice and warnings, but the way the credit industry is set up, they just don’t reward people for being responsible like that. My mom and I have laughed about it a lot lately. But I’m still glad I followed her warnings and didn’t get a card in college and use it unwisely.

Also, a big thank you to Kacie for highlighting my situation! You’re the best!

]]> By: Rachelhttp://sensetosave.com/2009/04/07/no-credit-score-shouldnt-equal-a-bad-one/comment-page-1/#comment-39434 Rachel Thu, 09 Apr 2009 04:46:03 +0000 http://sensetosave.com/?p=1137#comment-39434 I obtained my first credit card at 17, and paid off any balance in full every month. I obtained two cards within the next couple of years, and always paid the balances on those as well. My credit scores were just under 700 (in the "good" category, but not great) the first time I ran my credit when I was 20 and thereafter. After I had a short-term loan on my credit (a secured loan just to boost my history), they were in the 720 range. I have NEVER carried a balance on a credit card (but use them constantly as I gain the "rewards" from them) and my scores were in the 720-740 range before obtaining my mortgage. Now I'm in the 730-750 range and have no debt other than the house (actually, I initially took a 20 point HIT from the mortgage).You don't need to carry a balance in order to show "activity" on your credit cards. If you look at your credit reports, it will show the "balance" in the snapshot for each account. Most cards use the balance as of your statement date - which means whatever you owe on that closing date is what shows up on your credit report (some banks do take their "snapshot" at other times, but they are few and far between). So you can pay off the balance and still show activity.Your friend should start a relationship with a local credit union. Ask them about secured loans (not credit cards). Pretty much you utilize cash you already have to secure the "loan." The whole point is pretty much to build your credit. I did that to help my husband rebuild his credit and it worked like a charm. They also are more likely to have secured credit cards (secured by savings account balances). Either would help her build her credit. I obtained my first credit card at 17, and paid off any balance in full every month. I obtained two cards within the next couple of years, and always paid the balances on those as well. My credit scores were just under 700 (in the “good” category, but not great) the first time I ran my credit when I was 20 and thereafter. After I had a short-term loan on my credit (a secured loan just to boost my history), they were in the 720 range. I have NEVER carried a balance on a credit card (but use them constantly as I gain the “rewards” from them) and my scores were in the 720-740 range before obtaining my mortgage. Now I’m in the 730-750 range and have no debt other than the house (actually, I initially took a 20 point HIT from the mortgage).

You don’t need to carry a balance in order to show “activity” on your credit cards. If you look at your credit reports, it will show the “balance” in the snapshot for each account. Most cards use the balance as of your statement date – which means whatever you owe on that closing date is what shows up on your credit report (some banks do take their “snapshot” at other times, but they are few and far between). So you can pay off the balance and still show activity.

Your friend should start a relationship with a local credit union. Ask them about secured loans (not credit cards). Pretty much you utilize cash you already have to secure the “loan.” The whole point is pretty much to build your credit. I did that to help my husband rebuild his credit and it worked like a charm. They also are more likely to have secured credit cards (secured by savings account balances). Either would help her build her credit.

]]> By: Jennyhttp://sensetosave.com/2009/04/07/no-credit-score-shouldnt-equal-a-bad-one/comment-page-1/#comment-39418 Jenny Thu, 09 Apr 2009 02:58:26 +0000 http://sensetosave.com/?p=1137#comment-39418 About what Liz said...That explains a lot. My husband and I were charging things and paying them off before the month was up and were wondering why our credit score barely budged. I STILL don't think it's gotten much better and we've been paying on this house we're sitting in for almost two years! We've never paid late on the house or the car.It seems to me that if you want a good credit score, you must purchase one. It's a conspiracy! About what Liz said…

That explains a lot. My husband and I were charging things and paying them off before the month was up and were wondering why our credit score barely budged. I STILL don’t think it’s gotten much better and we’ve been paying on this house we’re sitting in for almost two years! We’ve never paid late on the house or the car.

It seems to me that if you want a good credit score, you must purchase one. It’s a conspiracy!

]]> By: Mrs. Moneyhttp://sensetosave.com/2009/04/07/no-credit-score-shouldnt-equal-a-bad-one/comment-page-1/#comment-39403 Mrs. Money Wed, 08 Apr 2009 23:41:35 +0000 http://sensetosave.com/?p=1137#comment-39403 I think it's stupid too. I also think banks should be more willing to give out credit cards with a very small limit to get people started on the right foot. When I got my first card, it was from Capital One and it had a $300 limit. I paid it off each month and was so proud of myself. There are secured visa cards out there (National City offers one) that she could 100% get approved for. You have to put up a security deposit though. Let me know if you have more questions; I don't want to write a book here. :)<em>Mrs. Money's last blog post..</em><a href='http://ultimatemoneyblog.com/tax-time' rel="nofollow">Tax Time!</a> I think it’s stupid too. I also think banks should be more willing to give out credit cards with a very small limit to get people started on the right foot. When I got my first card, it was from Capital One and it had a $300 limit. I paid it off each month and was so proud of myself. There are secured visa cards out there (National City offers one) that she could 100% get approved for. You have to put up a security deposit though. Let me know if you have more questions; I don’t want to write a book here. :)

Mrs. Money’s last blog post..Tax Time!

]]> By: jennydeckihttp://sensetosave.com/2009/04/07/no-credit-score-shouldnt-equal-a-bad-one/comment-page-1/#comment-39379 jennydecki Wed, 08 Apr 2009 20:32:00 +0000 http://sensetosave.com/?p=1137#comment-39379 Before you get a mortgage, I think you need a credit score. Whether that's from a secured card or being an authorized user on someone else's card...it has to happen.Sure there are some kids who find Dave Ramsey when they are 20 and decide to buy a house with cash - I applaud that and if I had my crystal ball and 20 extra years of knowledge under my belt at the time, I would have :)We did not decide to go all crazy-debt-free until after we got our house and had our car...we figured we won't really need credit for much else from here on out.<em>jennydecki's last blog post..</em><a href='http://beyondmom.com' rel="nofollow">Beyond Mom</a> Before you get a mortgage, I think you need a credit score. Whether that’s from a secured card or being an authorized user on someone else’s card…it has to happen.

Sure there are some kids who find Dave Ramsey when they are 20 and decide to buy a house with cash – I applaud that and if I had my crystal ball and 20 extra years of knowledge under my belt at the time, I would have :)

We did not decide to go all crazy-debt-free until after we got our house and had our car…we figured we won’t really need credit for much else from here on out.

jennydecki’s last blog post..Beyond Mom

]]> By: Lizhttp://sensetosave.com/2009/04/07/no-credit-score-shouldnt-equal-a-bad-one/comment-page-1/#comment-39371 Liz Wed, 08 Apr 2009 19:49:16 +0000 http://sensetosave.com/?p=1137#comment-39371 Everyone has given some great advice! But I want to send up a red flag about one thing. Paying off your credit card each month and never carrying a balance does not help your credit score very much at all! You have to actually carry a small balance over a few times for it to boost your score. Sound crazy?? Yep, that's what I thought too!I was raised with a very financially smart example from my parents. I never had a credit card until I graduated from college and I got it to have credit and in case of emergency or something. I hardly ever used it and when I did I payed it off right away and never carried a balance. Then I got engaged and my hubby to be and I started looking at our credit scores in anticipation of buying a house. My score was good, but not near as high as I wanted. The only thing I had going against me is lack of credit history..... I had rented for a year, had a cell phone for a year, and that was about it. I was told that I needed to put a small amount on my credit card and take 3 months to fully pay it off. IT KILLED ME!!!! It went against everything I stood for to pay interest! But I was told I had to do it to help my credit, I did and it actually really did help! So those of you who are considering get a card to increase your score, no that paying it off every month doesn't help your score. Put a very low balance on it ($100) and then pay it off over 3 months. It will help. Apparently when you pay it off every month, it doesn't show you are using your card and hence doesn't establish credit. Hope this helps!<em>Liz's last blog post..</em><a href='http://scrapbookingmama-liz.blogspot.com/feeds/posts/default' rel="nofollow">I've been tagged!!!!</a> Everyone has given some great advice! But I want to send up a red flag about one thing. Paying off your credit card each month and never carrying a balance does not help your credit score very much at all! You have to actually carry a small balance over a few times for it to boost your score. Sound crazy?? Yep, that’s what I thought too!

I was raised with a very financially smart example from my parents. I never had a credit card until I graduated from college and I got it to have credit and in case of emergency or something. I hardly ever used it and when I did I payed it off right away and never carried a balance. Then I got engaged and my hubby to be and I started looking at our credit scores in anticipation of buying a house. My score was good, but not near as high as I wanted. The only thing I had going against me is lack of credit history….. I had rented for a year, had a cell phone for a year, and that was about it. I was told that I needed to put a small amount on my credit card and take 3 months to fully pay it off. IT KILLED ME!!!! It went against everything I stood for to pay interest! But I was told I had to do it to help my credit, I did and it actually really did help! So those of you who are considering get a card to increase your score, no that paying it off every month doesn’t help your score. Put a very low balance on it ($100) and then pay it off over 3 months. It will help. Apparently when you pay it off every month, it doesn’t show you are using your card and hence doesn’t establish credit. Hope this helps!

Liz’s last blog post..I’ve been tagged!!!!

]]> By: Kaciehttp://sensetosave.com/2009/04/07/no-credit-score-shouldnt-equal-a-bad-one/comment-page-1/#comment-39365 Kacie Wed, 08 Apr 2009 19:09:47 +0000 http://sensetosave.com/?p=1137#comment-39365 Hey Crystal,I just e-mailed you back. I haven't received any messages from you in the past day. I'm not sure what's going on! Eep. If you have another e-mail address, maybe you could try to shoot me a message from that.I've checked my spam folder and your messages aren't there, either. Hey Crystal,

I just e-mailed you back. I haven’t received any messages from you in the past day. I’m not sure what’s going on! Eep. If you have another e-mail address, maybe you could try to shoot me a message from that.

I’ve checked my spam folder and your messages aren’t there, either.

]]> By: Crystalhttp://sensetosave.com/2009/04/07/no-credit-score-shouldnt-equal-a-bad-one/comment-page-1/#comment-39355 Crystal Wed, 08 Apr 2009 17:16:04 +0000 http://sensetosave.com/?p=1137#comment-39355 Hey Kacie. I just wanted to leave a post here letting you know I have been receiving and responding to your emails. I hope you get the most recent one I sent. =) Hey Kacie. I just wanted to leave a post here letting you know I have been receiving and responding to your emails. I hope you get the most recent one I sent. =)

]]> By: Saph @ Walk With Mehttp://sensetosave.com/2009/04/07/no-credit-score-shouldnt-equal-a-bad-one/comment-page-1/#comment-39351 Saph @ Walk With Me Wed, 08 Apr 2009 16:38:15 +0000 http://sensetosave.com/?p=1137#comment-39351 Try Orchard Bank Mastercard. I'm considering getting this myself. From their site: The Orchard Bank Secured MasterCard is an excellent card for establishing or rebuilding credit in your name. It comes with a low 7.90% variable purchase APR, and the first year's annual fee will be waived.* The ability to make online purchases or reservations, and access to manage your account 24/7. * Your choice of payment due dates to make paying your bill on time easier. * Email alerts to remind you of your upcoming payment due date when you enroll your account online. * Simply print and mail your application with your deposit (minimum $200) to start building credit right away!http://www.orchardbank.com/ecare/homepage/creditcards?WT.svl=100 Try Orchard Bank Mastercard. I’m considering getting this myself. From their site:
The Orchard Bank Secured MasterCard is an excellent card for establishing or rebuilding credit in your name. It comes with a low 7.90% variable purchase APR, and the first year’s annual fee will be waived.

* The ability to make online purchases or reservations, and access to manage your account 24/7.
* Your choice of payment due dates to make paying your bill on time easier.
* Email alerts to remind you of your upcoming payment due date when you enroll your account online.
* Simply print and mail your application with your deposit (minimum $200) to start building credit right away!

http://www.orchardbank.com/ecare/homepage/creditcards?WT.svl=100

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