Hey, I work in finance and thus have a lot of information regarding credit. I will periodically post here regarding credit scoring, credit reports, and the like. If you have something to add or want to ask a question feel free to jump in.
WHAT'S IN YOUR WALLET?
You gotta love their commercials, but Capital One can be more damaging to a credit score than 3 consecutive blizzards. (We in Denver are just now getting our Christmas cards delivered and December¢€™s bills which were due yesterday.) This is because Capital One refuses to report its customer's credit limits to the credit bureaus.
Not to pick on them, but Capital One is the largest of a select few credit card companies that has a corporate policy to keep the information secret because not reporting the limits can prevent competitors from pilfering the company's more creditworthy customers.
So if you owed $2,000 on your Capital One account, but had a credit limit of $10,000, by not reporting the credit limit, Capital One could make it appear that you had reached your limit and were "maxed out" at $2,000 taking your credit score right down with it. This happens because absent of a credit limit, the high balance figure is substituted for the missing credit limit by the Credit Reporting Agencies.
In addition, Capital One is currently battling several class action lawsuits over delayed posting of customer¢€™s payments resulting in unfairly reported late payments and triggering of clauses that increase the interest rate on the account immediately. Capital One has been widely and publicly criticized for these practices, but has yet to change them.
Their legal department is now hiring!
'The Credit File'
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iMNO
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DO YOU REALLY WANT TO SAVE 10% TODAY?
One of the fastest ways to tank a credit score is to sign up for a department store charge card and use the card to take advantage of an instant discount.
This single, well-intentioned act can do a “quadruple whammy” to the score because such charge cards usually start with very low credit limits, so any purchases likely will result in a high ratio of balance to credit limit.
Next, the score drops because you have opened up a new line of credit and then again because of the department store's inquiry.
And to top it all off, the credit scoring system looks less favorably upon store charge cards, which give limited buying potential, than it does on major credit cards.
Instant savings is great but the long term cost can be downright painful!
Another thing to avoid is the booth at football/basketball games where they will give you a free t-shirt/blanket for signing up for a credit card....especially for the young people they target. Credit Inquiries and credit cards weigh heavily on the score for a young credit profile.
One of the fastest ways to tank a credit score is to sign up for a department store charge card and use the card to take advantage of an instant discount.
This single, well-intentioned act can do a “quadruple whammy” to the score because such charge cards usually start with very low credit limits, so any purchases likely will result in a high ratio of balance to credit limit.
Next, the score drops because you have opened up a new line of credit and then again because of the department store's inquiry.
And to top it all off, the credit scoring system looks less favorably upon store charge cards, which give limited buying potential, than it does on major credit cards.
Instant savings is great but the long term cost can be downright painful!
Another thing to avoid is the booth at football/basketball games where they will give you a free t-shirt/blanket for signing up for a credit card....especially for the young people they target. Credit Inquiries and credit cards weigh heavily on the score for a young credit profile.
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AYHJA
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Man, you couldn't be more right..! Capital One BLOWS...Me and my mother work in the mortgage business, so I'm familiar and always working with credit, while she mainly does the repair aspect of it...
My advice is to stay away from credit cards, and if you want to build credit, do so using secured cards, not cards with those lofty 10K spending limits, and you're using thinking you can pay the monthly note, but in reality you will never see the end of that debt paying the monthly balance...
Good thread iMNO..!
My advice is to stay away from credit cards, and if you want to build credit, do so using secured cards, not cards with those lofty 10K spending limits, and you're using thinking you can pay the monthly note, but in reality you will never see the end of that debt paying the monthly balance...
Good thread iMNO..!
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trashtalkr
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So A, what kind of secured cards are you talking about? I need to start working my credit up and I need a safe, good way to do it
"If there were no eternal consciousness in a man, if at the bottom of everything there were only a wild ferment, a power that twisting in dark passions produced everything great or inconsequential; if an unfathomable insatiable emptiness lay hid beneath everything, what would life be but despair?"
Soren Kierkegaard
Soren Kierkegaard
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iMNO
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For a secured card you give the bank some money adn then they give you a credit card with a credit limit up to the amount you gave them.
Example:
You give them $1,000 and they give you a credit card with a credi tlimit of $1,000. so you use the credit card they report it to the credit bureaus and you build your credit score and credit profile. It is a 'secure' account because if you don't make a payment they just take the necessary amount from the $1,000 you gave them so there is no risk to the bank fo rgiving you a credit card.
If you don't have any credit at all, it can be tough to get started because you don't have a track record "credit profile' that shows how likely you are to pay your debts and pay your debts on time.
A--fill in the blanks m8!
Example:
You give them $1,000 and they give you a credit card with a credi tlimit of $1,000. so you use the credit card they report it to the credit bureaus and you build your credit score and credit profile. It is a 'secure' account because if you don't make a payment they just take the necessary amount from the $1,000 you gave them so there is no risk to the bank fo rgiving you a credit card.
If you don't have any credit at all, it can be tough to get started because you don't have a track record "credit profile' that shows how likely you are to pay your debts and pay your debts on time.
A--fill in the blanks m8!
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AYHJA
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That's about the gist of it iMNO...
And the beauty of it is that it doesn't show up as a 'secured' card...It shows up as a regular credit card....And like iMNO said, your payments are never late...If you can manage to get your hands on a couple, I'd say grab 2 or 3 $250-$300 secured cards...Paying on those steadily and surely, while showing low balances (debt to income ratio is important) you'll have good credit in no time...
Once again, I'd strongly advise against other credit cards...They just don't work well...You can use secured cards like debit cards, which is awesome...
Having no credit is just as bad, and sometimes worse, than having bad credit at all when you need it...
And the beauty of it is that it doesn't show up as a 'secured' card...It shows up as a regular credit card....And like iMNO said, your payments are never late...If you can manage to get your hands on a couple, I'd say grab 2 or 3 $250-$300 secured cards...Paying on those steadily and surely, while showing low balances (debt to income ratio is important) you'll have good credit in no time...
Once again, I'd strongly advise against other credit cards...They just don't work well...You can use secured cards like debit cards, which is awesome...
Having no credit is just as bad, and sometimes worse, than having bad credit at all when you need it...
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trashtalkr
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You are entitled to one free credit report a year, right? Which site should I go to for that? There are many that offer it, but many of them I don't trust.
"If there were no eternal consciousness in a man, if at the bottom of everything there were only a wild ferment, a power that twisting in dark passions produced everything great or inconsequential; if an unfathomable insatiable emptiness lay hid beneath everything, what would life be but despair?"
Soren Kierkegaard
Soren Kierkegaard
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iMNO
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TT -- check out annualcreditreport.com
AnnualCreditReport.com is a centralized service for consumers to request free annual credit reports. It was created by the three nationwide consumer credit reporting companies - Equifax, Experian and TransUnion.
AnnualCreditReport.com provides consumers with the secure means to request and obtain a free credit report once every 12 months from each of the three nationwide consumer credit reporting companies in accordance with the Fair and Accurate Credit Transactions Act (FACT Act).
AnnualCreditReport.com offers consumers a fast and convenient way to request, view and print their credit reports in a secure Internet environment. We also provide options to request reports by telephone and by mail.
AnnualCreditReport.com is the only service authorized by Equifax, Experian and TransUnion for this purpose. The three nationwide consumer credit reporting companies have always encouraged consumers to regularly review their credit reports.
AnnualCreditReport.com is a centralized service for consumers to request free annual credit reports. It was created by the three nationwide consumer credit reporting companies - Equifax, Experian and TransUnion.
AnnualCreditReport.com provides consumers with the secure means to request and obtain a free credit report once every 12 months from each of the three nationwide consumer credit reporting companies in accordance with the Fair and Accurate Credit Transactions Act (FACT Act).
AnnualCreditReport.com offers consumers a fast and convenient way to request, view and print their credit reports in a secure Internet environment. We also provide options to request reports by telephone and by mail.
AnnualCreditReport.com is the only service authorized by Equifax, Experian and TransUnion for this purpose. The three nationwide consumer credit reporting companies have always encouraged consumers to regularly review their credit reports.
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AYHJA
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Also TT, if you contact the 3 major credit bureaus and tell them that you were denied credit (even if you weren't), you are entitled to a free copy of your report...
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Pete
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Hey iMNO, what is the differences between MasterCard & Visa? Does one have more advantages over the other?
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