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Tamlin
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Why is one penalized for having no debt?

Ok, a few weeks ago I got the title to my car. I own it now, no payments. That was the last debt I had in my name.

Yesterday I got a message from the bank that my credit score is suddenly down 22 points. Reason: "Inadequate number of rolling accounts." i.e. no debt.

What the *&!#? I thought it was *good* to have no debt? emoticon

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10/16/2007, 3:41 pm Send Email to Tamlin   Send PM to Tamlin
 
eVilpoptart
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Re: Why is one penalized for having no debt?

xD
That's what we get for living in America.
 emoticon emoticon

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Are you like a crazy person?
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I'm quite sure they will say so.
10/16/2007, 6:41 pm Send Email to eVilpoptart   Send PM to eVilpoptart AIM MSN Yahoo
 
friendlysolarflare
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Re: Why is one penalized for having no debt?

quote:
Tamlin wrote:
I thought it was *good* to have no debt? emoticon

Good for you, yes, but not good for the bank - and since when did they care about what's best for us?

I'm happy for you emoticon congrats on owning your own car emoticon emoticon
10/16/2007, 10:56 pm Send Email to friendlysolarflare
 
ButMadNNW
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Re: Why is one penalized for having no debt?

If you closed all your accounts as you paid them off, that can actually negatively affect your credit score - they like to see open accounts with a history, even if there's no balance.

This is what I've been told, anyway.

And yes, congrats on being debt-free! emoticon

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10/16/2007, 11:33 pm Send Email to ButMadNNW Yahoo
 
Tamlin
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Re: Why is one penalized for having no debt?

I'm going to go talk to the bank Saturday - it does look like I need to keep a credit card, pay something like my wireless phone bill, and pay it off that same month as I always do. I just need to ask "do I need to *keep* a debt?"

Crazy. Since when does evidencing financial responsibility penalize you? The only other thing is when the bank stopped paying my car payments automatically from my account as I'd set up, in the middle of a bank merger, but that one was rectified (I started paying directly through Honda)...and it is a low "ding" on the score compared to having no debt.

As I said, crazy! emoticon

Last edited by Tamlin, 10/17/2007, 2:14 pm


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10/17/2007, 2:13 pm Send Email to Tamlin   Send PM to Tamlin
 
Tamlin
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Re: Why is one penalized for having no debt?

Here's an update to this rant:

I just got another credit monitoring report. "Increase in Credit Score."

The score is up 100 points. It's a very good score now.

Why did it go up? Let's see...

I got a credit card.
I used a credit card.
I paid a credit card bill in full.
I now have a *very* small credit card balance from a very recent, in the range of $25, charge to the card.

So, my credit score goes up.

This is both good news and a bit mind-boggling. Credit scores are this fickle??


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1/20/2008, 1:15 pm Send Email to Tamlin   Send PM to Tamlin
 
Doctor Delia
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Re: Why is one penalized for having no debt?

I really don't understand credit scores. I have no idea what mine is and I don't care. I'm what is referred to in the business as a "deadbeat." In other words, I don't carry any balances on my credit cards and if I do make charges, I pay them off on time. In fact, I don't even use a credit card, I use a charge card, so that I have to pay my balances off on time.
Why should we live our lives according to what the credit card industry wants?
The only time a credit score is of any importance is when you are buying a house, and I can tell you from experience that the real estate industry is a total con game. Whether you get a mortgage or not has nothing at all to do with your ability to pay it off!!!
1/23/2008, 10:17 pm Send Email to Doctor Delia   Send PM to Doctor Delia
 
CyranoRox
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Re: Why is one penalized for having no debt?

a credit score assesses how likely you are to make regular payments on debt. With no debt, or a pattern of retiring debt, likelihood goes down. it's not a measure of your prudence, but of your profitability - to lenders.
1/26/2008, 10:26 pm Send Email to CyranoRox   Send PM to CyranoRox
 


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