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O/T Credit Score Question

Discussion in 'Uncategorized Threads' started by 686beretta, Jul 6, 2008.

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  1. 686beretta

    686beretta TS Member

    Joined:
    Jan 29, 1998
    Messages:
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    I know this is way off topic here, but I want to know if anyone else has heard of this. A friend of mine is adding on to his house. He and his wife went in applied for a loan, they ran their credit score/credit, they have a credit card but basically never use it, except during emergencies. The bank they went to says that it does count against your credit score whether you use the credit card or not. It does kind of make sense, but I have never heard of it. Has anyone else?
     
  2. jimrich60

    jimrich60 Member

    Joined:
    Aug 15, 2007
    Messages:
    810
    In my experience, this is normal procedure for a Bank or other credit institution. The reason, as explained to me, is that even if there is no balance, once the applicant gets the home mortgage, they could then run up the credit card (for some emergency or whatever reason) and this could then affect the ability to pay the mortgage. So the potential is taken into account in the credit score. In my case for instance, I never carry a credit card balance, always paying off any charges every time used. But the card is still incuded in the credit assessment.
     
  3. nipper

    nipper TS Member

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    Dec 30, 2007
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    sure it counts, does not matter if you use it or not

    bill
     
  4. ec90t

    ec90t Guest

    Beretta 686,

    It doesn't count against your score/rating. It does however figure into your debt ratio. Credit cards are treated like an open line of credit and therefore figured in like it is maxed. They didn't really start doing this until recently. With all the foreclosures/bankruptcies these days, the banking business has really tightened up.

    The one thing that will start dinging your credit score is credit inquires. If you are shopping for a major purchase (car, house, etc) everytime they check your credit score a few points are deducted.

    ec90t
     
  5. Dave P

    Dave P TS Supporters TS Supporters

    Joined:
    Jan 29, 1998
    Messages:
    2,515
    Location:
    Canton, Il.
    I was in the consumer credit business for over 45 years the last 30 in a small community. The size of your lending market area and SIZE of the bank has everything to do with getting a loan or not. Shortly before I retired and the reason I retired is I got damn tired of having my judgement questioned. There are very good reasons why people have low credit scores, little credit and some bad credit. I used to have the ability to look at and examine each credit report and determine if there were other reasons for problems.

    My suggestion for everyone is to get started with and familiar with a small bank and a "small bank" loan officer. If all you have is a unused credit card, USE it once in a while and pay it off before the charges kick in.

    Hope this helps. Dave P.
     
  6. starshot2b

    starshot2b TS Member

    Joined:
    Jan 29, 1998
    Messages:
    704
    ec90t - you don't get dinged for multiple inquiries when purchasing a car. They expect that you will "shop" for a loan, whether you do it or the dealer does it.

    It's responding to or applying for multiple credit cards in a short period of time that creates the problem, especially with all of the low (or no) percentage rates with balance transfers that have proliferated within the past year. I asked about this when shopping for my car last year.
     
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