Unfair credit score ticks me off

[Midrsv]

Just need to vent here, nothing to do with bikes. I recently received a credit card statement that provided me with my credit score and it seemed lower, still a decent score but lower. So I took advantage of the links in the email to check my credit report and score and it was lower. First let me state that I have no long term debt. I use 2 credit cards (Amex and Visa) which are paid in full each month. While we have used credit over the years for our home and autos, all have been paid off for a few years. Now here is the part that burns me a bit. I checked my score with Transunion and it was lower, the reason given for the downgrade was that I don't have enough open accounts for them to adequately evaluate my repayment history. Give me a break! Ordinarily I wouldn't care about the credit score because I won't be needing additional credit for the foreseeable future. However, now insurance companies use your credit score for determining your insurance rates and on my last auto policy renewal there was a statement that my credit score had negatively impacted my rate. Something is wrong with this system and it's pissing me off.

 

Vent Off now.

 

Dennis

Edited July 11, 2015 by Midrsv

[Eck]

Now that sure makes one go Hummmmmmmm...

My insurance company hasn't hit me with any charges like that and I hope they don't. If they did, I would have to have a sit down with them and if they refused to change the way they charge me for my insurance, I would be pursuing insurance elsewhere. What insurance CO. do you have if I may ask? I have the little green Lizard.

 

Times are changing fast and that "American dream" is becoming a nightmare to reach for most in the 60 plus age bracket.

[MiCarl]

Yeah, they want to see more credit activity rather than less. When I sold cars it was easier to finance someone with a bankruptcy than someone who flat out never used credit.

 

We got one of those statements about my wife's score impacting our rate, something about too many open accounts (she has every store card in existence). Shortly thereafter we refinanced the house and her score was North of 800. Go figure.......

[Flyinfool]

Going to another insurance company will not help, Ever since they figured out that it is a good way to raise the rates on good drivers, they all do it.

 

now to get a good insurance rate you have to have a clean driving and high credit score.

 

The reasoning that they gave me when I complained was that the poorer people have the worst credit and people with more money have better credit. The more available cash you have the less likely you will file a claim for a minor damage. Poor people are more likely to file that small claim because they cant afford to just go fix it themselves.

[Midrsv]

I guess the point I'm trying to make here is that I'm probably like a lot of others here, I've worked hard all my life and made it to retirement a couple of years ago. I've used credit over the years and acquired all of the stuff I need and religiously paid it off. Now that I am at a stage in life where I don't really need credit the system penalizes me with a ding to the credit score which then costs me on insurance. The insurance I am referring to is my auto policy which is with AAA. But I bet most other insurance companies follow the same practice.

[bongobobny]

Try online banking and pay your credit cards off waaaay before the due date! Since I started doing that my credit score has skyrocketed about 30 points...

[Sailor]

We checked our credit score and it is well above 900. I asked why since we hardly use credit. They told me it was because we always paid it off well before due date. We use credit for gas and hotels when we travel and that is about it. When we get the bill we pay it immediately, before interest charges start.

[Midrsv]

That's exactly what I do Sailor. Only I also use my Amex card for online shopping.

[BlueSky]

My wife's score is higher than mine. Her income has been a fraction of what mine was before I retired. She has more credit cards like store cards that she pays off. I recently started thinking about buying another house and after checking with a couple of institutions for a loan, my credit score was docked because of too many inquiries about my credit score!!! It's a racket. It's been about 10 years since I've owed money to anybody and another reason for my lower credit score was too much credit. I cancelled my home equity line several years ago because we never used it and they are still counting that against me.

[syscrusher]

Another crappy thing that companies providing insurance underwriting scores based on credit do is to include any change of credit card number as an account closing. When Target gets a bunch of credit card info stolen your bank will typically cancel the existing card and issue a new one with new numbers. This is not your fault, but it is held against you in this way anyway.

[bj66]

I have a good friend who hates credit cards. He was almost 40 years old before he got one. He always saved money and paid cash for everything. He even built a new house and paid cash. He finally had to get one when he couldn't get a room on vacation paying with cash. If I remember right it was almost a little bit difficult for him to get a card because of no past history at that age. He was mad because he could pay cash for his house but not a hotel room......I'll never forget that.

[djh3]

A couple years back I was doing the insurance look around thing. So applied online to like 5. When I finally picked one they were going to bump my cost because of to many inquireies. So your rooked either way. We have a couple credit cards and a couple store credit cards. The "major" credit cards we use for travel or a big item. Usually try to get it paid off ASAP. May not be in next month but depending on how much as soon as we can.

But its a racket to be sure.

[Beach Bum]

I have a good friend who hates credit cards. He was almost 40 years old before he got one. He always saved money and paid cash for everything. He even built a new house and paid cash. He finally had to get one when he couldn't get a room on vacation paying with cash. If I remember right it was almost a little bit difficult for him to get a card because of no past history at that age. He was mad because he could pay cash for his house but not a hotel room......I'll never forget that.

I'm 43 and only got my first credit card a year ago. Paid cash for everything including cars, bikes, you name it. Girlfriends and wives had credit but I never wanted debt. Now I want to buy a house and have to actually finance something to build a record of payments so I took out a loan for $3500 that I have to pay on for a year to establish a history. I have the cash in savings to pay it and it's just debited monthly. I asked the banker if I could just give them the interest and call it good and they said no. Apparently it's better to never have had credit than to repair it as I'm already in the mid-700's after a year with two cards. Still think it's stupid though, being penalized for living debt free.

[djh3]

Beach- aint that the truth. If more folks would live closer to thier means I dont think the econmoy would have been so messed up. I dont mean you cant finance anything, just be smart about it. Dont figure your montly payments to the last dollar. Because I can asure you something will go south, then your over extended.

Loads of years back probably 10 or more we refinanced the house as rates dropped etc. So was good time. When we refiananced the mortgage compny tried really hard for us to take out more money like up to 110% of what house was valued at. Thats just plain stupid to loan more than what something is valued at in my book. No wonder FANNY mac or whatever it was went upside down. Im not a finance major, but that there just dont make sense, no what I mean Vern?

[cowpuc]

I learned at a very young age to live within my means (left home at 15, lived on the street and all that nonsense) and that has followed me thru life. Bought my first home for cash when I was 23, a real deal fixer upper.. Got the tools box out, gutted the place, new windows/doors/floors/roof, added on a garage, got married, had kids and then spent a few years with the kids when they were little completing the project (them little kids had a BLAST helping me). Bought and sold several thru the years (houses - not kids ) and never did end up having to borrow money - even a morgage, never had a credit card.. Fast forward to about 15 years back, my side kick son and I were out goofing off doing some flying around on some really cheap airline tickets (seeing the country hopping planes just for kicks) we ended up in Chicago, ran out of cheap fight tickets and needed to rent a car. Pulled out my debit card, place wouldn't take it.. Had a heck of time finding a place that would except my debit card and NO ONE would accept cash - even tried to bribe em with triple the rental cost - didnt work..

After that ordeal I decided it was time to get a credit card just for such emergencies.. Got turned down by ALL major card companies because I had never had credit - they had no idea who I was. Our local bank, who had I dealt with for years, told me it would take years of borrowing and paying back to get established because (their words) "never having had credit is far far worse than having even severly bad credit".. I told them I felt like I was being punished for having learned and lived the philosophy of = if I could not afford it I didnt need it and that I was pretty sure I didnt need to be part of the debt world, walked out and never looked back.

Still have never had a credit card and never been in debt.. Have we gone without some stuff,, heck ya .. Has having done so hurt us as a family,, I really dont think so BUT, we have been stuck having to ride beat up ol Yamaha Ventures for our cross country touring needs for many years.. Thankfully those Yamaha's have proven to be very reliable. Because of that, I havent had to try using my debit card again for a car rental - pretty sure if we did those same companies that said NO to my Debit Card years ago would still say NO today and laugh as Tip and I began a cross country walk toward home,,, and it is a mighy longgggg walk from places like Stewarts Point California to Muskegon Michigan

[bj66]

I learned at a very young age to live within my means (left home at 15, lived on the street and all that nonsense) and that has followed me thru life. Bought my first home for cash when I was 23, a real deal fixer upper.. Got the tools box out, gutted the place, new windows/doors/floors/roof, added on a garage, got married, had kids and then spent a few years with the kids when they were little completing the project (them little kids had a BLAST helping me). Bought and sold several thru the years (houses - not kids ) and never did end up having to borrow money - even a morgage, never had a credit card.. Fast forward to about 15 years back, my side kick son and I were out goofing off doing some flying around on some really cheap airline tickets (seeing the country hopping planes just for kicks) we ended up in Chicago, ran out of cheap fight tickets and needed to rent a car. Pulled out my debit card, place wouldn't take it.. Had a heck of time finding a place that would except my debit card and NO ONE would accept cash - even tried to bribe em with triple the rental cost - didnt work..

After that ordeal I decided it was time to get a credit card just for such emergencies.. Got turned down by ALL major card companies because I had never had credit - they had no idea who I was. Our local bank, who had I dealt with for years, told me it would take years of borrowing and paying back to get established because (their words) "never having had credit is far far worse than having even severly bad credit".. I told them I felt like I was being punished for having learned and lived the philosophy of = if I could not afford it I didnt need it and that I was pretty sure I didnt need to be part of the debt world, walked out and never looked back.

Still have never had a credit card and never been in debt.. Have we gone without some stuff,, heck ya .. Has having done so hurt us as a family,, I really dont think so BUT, we have been stuck having to ride beat up ol Yamaha Ventures for our cross country touring needs for many years.. Thankfully those Yamaha's have proven to be very reliable. Because of that, I havent had to try using my debit card again for a car rental - pretty sure if we did those same companies that said NO to my Debit Card years ago would still say NO today and laugh as Tip and I began a cross country walk toward home,,, and it is a mighy longgggg walk from places like Stewarts Point California to Muskegon Michigan

 

If I remember right, my friend had to get a card that had extremely high interest to start out. Visas etc wouldn't take him. Only after a year or so did he acquire enough of a rating to get a better card. It was frustrating to him that's for sure.

[saddlebum]

Going to another insurance company will not help, Ever since they figured out that it is a good way to raise the rates on good drivers, they all do it.

 

now to get a good insurance rate you have to have a clean driving and high credit score.

 

The reasoning that they gave me when I complained was that the poorer people have the worst credit and people with more money have better credit. The more available cash you have the less likely you will file a claim for a minor damage. Poor people are more likely to file that small claim because they cant afford to just go fix it themselves.

In other words financial discrimination.

[saddlebum]

Try online banking and pay your credit cards off waaaay before the due date! Since I started doing that my credit score has skyrocketed about 30 points...

Also toss an extra 20 bucks over and above the

invoice total when you pay. You will be amazed how it ups your credit score.

[BigLenny]

We checked our credit score and it is well above 900. I asked why since we hardly use credit. They told me it was because we always paid it off well before due date. We use credit for gas and hotels when we travel and that is about it. When we get the bill we pay it immediately, before interest charges start.

 

Wow! Well above 900?? Never heard of that. For years the highest credit score possible for anybody to get has been 850. Both mine and my wife's are over 800, but, if it's possible to get over 900, I wanna try for that. I just googled it and all the FICO sites I'm seeing still say the threshold is 850. Maybe they bumped the new threshold to 950 or something.

[Mike G in SC]

Cut/paste:

 

Most credit scores – including the FICO score and the latest version of the VantageScore – operate within the range of 301 to 850. Within that range, there are different categories, from bad to excellent.

 

•Excellent Credit: 781 – 850

•Good Credit: 661-780

•Fair Credit: 601-660

•Poor Credit: 501-600

•Bad Credit: below 500

 

And the top scales:

There are many different credit scores available to lenders, and they each develop their own credit score range. Why is that important? Because if you get your credit score, you need to know the credit score range you are looking at so you understand where your number fits in.

 

The Credit Score Range Using Various Scoring Models:

•FICO Score range: 300-850

•VantageScore 3.0 range: 300–850

•VantageScore scale (versions 1.0 and 2.0): 501–990

•PLUS Score: 330-830

•TransRisk Score: 100-900

•Equifax Credit Score: 280–850

[az1103]

I guess the point I'm trying to make here is that I'm probably like a lot of others here, I've worked hard all my life and made it to retirement a couple of years ago. I've used credit over the years and acquired all of the stuff I need and religiously paid it off. Now that I am at a stage in life where I don't really need credit the system penalizes me with a ding to the credit score which then costs me on insurance. The insurance I am referring to is my auto policy which is with AAA. But I bet most other insurance companies follow the same practice.

 

And right there is the problem !!! I have given up on AAA for insurance. Almost anyone can beat their rates. I do have a AAA card for emergencies but they haven't been able to come even remotely close on their rates for over 30+ years!!!

[Midrsv]

And right there is the problem !!! I have given up on AAA for insurance. Almost anyone can beat their rates. I do have a AAA card for emergencies but they haven't been able to come even remotely close on their rates for over 30+ years!!!

 

A few years ago I would have agreed with you. I switched to AAA about 4 years ago from Safeco and when I did I saved about $1100/year on my home and auto insurance. I did drop AAA roadside assistance. I dropped that because I called them one time for a flat tire. Ended up changing it myself and after an hour they still hadn't shown up.