Thank you hauling, Thats what I was talking about!!
hotrod, I agree with you. The only problem is that paying everything with cash (checks, etc.) doesn't create a track record to show that you're a responsible person. Back in the day, when everyone knew everyone, and you dealt with a hometown bank, that was enough. Unfortunately, these days you're stuck with using a record of your credit management. No credit history, no proof of responsible actions.
Hauling, I would venture to guess you are much younger than I am, and I understand the dilemma in today's market place. However, I will stand by my convictions that having a 17 yr plus perfect mortgage record, ( that's all that shows on my credit reports, its actually over 40 yrs now ), "should" be enough proof of a persons creditworthiness. I am not saying that I am right, or wrong, its just a snapshot of my life. I prefer to remain out of debt, even if the crb's find me a "credit risk". As long as I can keep on hotrodding, I am happy.
Not that much younger, although sweet of you to think so: 55 in October.
OHHHHHH to be 55 again, I am pushing 68.
Chief, I wanted to see what you were talking about and found your issue ("Understanding FICO scoring" 6/8/09)
Trying to figure out all of the scenarios that can affect our credit ratings is mind boggling! I think I finally "got it" with RobertEG's explanation. I came away with the analogy that credit scoring is like "compounded interest." The timing of every deposit and every withdrawal has an effect on the return.
I'm an old dog too and have never had to be concerned about getting credit. I asked - they gave. (I was only turned down once and that was about 45 yrs ago at Sears.) It was only recently and for the first time, I pulled my credit report. I was shocked! I thought I had a perfect credit record. I had only had 1 late payment in 35 years, and there it was, almost 4 years old, glaring at me. It hadn't hindered my ability to obtain credit, and until I stumbled onto this site I didn't even know that the CCC's kept track of such "trivial" things.
Wow! Was I wrong! I'm grateful to you for asking the question and to RobertEG for answering it. Thanks to you both.
As a side note about Sears, we REALLY needed that credit. DH had just separated from the Air Force and had obtained employment as a jet engine mechanic, but he needed his own tools. I ended up at the local hardware store where they were purchased on a handshake. As a result, I still shop at Sears occasionally, but don't buy anything unless I'm certain they're losing $$ on it!
(FYI, I bumped your post up a bit so people reading this thread can find it.)
Nice to see I am not the only "older" person here. I am 61 and yes, I have seen us go from a "handshake world' to a "push button world".
As I said in another thread, we have 4 credit cards, (3 Visa, 1 MC) and our total limits on them is 95K, which is WAY MORE then we need. As for "credit scores" I have never checked. One time, about five years ago when people really started talking a lot about credit scores, I asked the manager at the bank if my credit score was ok and he said it was good enough to get any financial product they offered so I have not bothered to ask since then.
Applying for credit? Like I said, the last time was in 2001 and that was not really necessary, as we were joining a local Country Club.
We always try to PIF every month, but I also try to give the CC companies a little business. I charge EVERYTHING I can, as it eliminates the need to carry much cash, it keeps the accounts open, shows activity and the banks make a few dollars processing charges.
Sure, I long for those days when it was a "handshake" but I am a realist. I can remember a time years ago, you could travel, stay in a hotel, cash a check without much problems. Now days, it is far different, but it doesn't upset me to much as I know I have not changed.
My wife and I have been very blessed. We are certainly not wealthy people, but we are comfortable and we try to give back as much as we can, which I think we should do.
Things are difficult right now, but I think they will work out. Perhaps the changes that happen will not be what everyone wants, but they will be changes we all have to live with.
I am not an older man, I am even a bit younger than OP.
Having been a discriminated minority in my original country and an immigrant in two other countries taught me a lot.
DickC is absolutely right. Banks and CCC did not scr*d people up, people did it themselves to themselves, banks just used their silliness to make some money. People want everything and now, there is no self control, no planning and no prioritazing. Economical situation has changed and banks cut cash flow, rouse APR and so forth therefore all unwise borrowers are in trouble.
And honestly speaking, at least 50% of all AA's I have read here are well deserved. As much as Amex is hated on all financial boards (and I am not Amex's cheerleader), Amex is going to pay back TARP money
(http://dealbook.blogs.nytimes.com/2009/05/08/amex-applies-to-pay-back-tarp-funds/). So maybe Amex's business decission was right?
I came to the States 3 years ago and open my first secured cc on 06/16/2006, CL was $1000. Exactly three years later my combined unsecured CL is more than $170K and I proud to say that I have never paid a penny in financial charges, my balances are always paid in full, I never buy if I do not have money to pay for it. Why do I need such high limits? I can find plenty of reasons, but honest one is to satisfy my ego.
But I think that DickC misses the point. If people decided to commit financial suicide, so be it. I can not teach everyone (G-d, give me strength to teach my own kids). The main point is (IMHO) that credit rules over our lives and this is wrong.
Thanks G-d my lendlord did not require credit report check, otherwise I would never find appartment. Or why cell phone provider should pull credit report or why credit report needed for employment application. If person has bad FICO score it does not mean that this person is going to be bad, let's say, mailman and etc.
On the other hand we learn here how to manipulate credit report and FICO, how to manipulate lenders to pull report we want them to pull.
What such a report can predict? NOTHING. This credit system is useless and only makes life complicated and difficult.
How do we fight them? I am affraid that there is only one way to fight them. Make your portfolio and freeze your credit report. We, cnsumers, can not win this war. The coalition of financial elite and politicians wins.
I vaguely remember seeing some man on TV, promising change and help to working americans. So far, nothing.