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Old 08-07-2013, 07:01 AM   #21
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Hey - maybe I should buy a boat and tell DW that I am excercising our credit to keep a good rating....
I like that idea! With me it would be photography gear. Only... if your wife is like mine she won't buy into it either.

We just don't give much thought to credit scores any more since we have no debt and haven't for many years. Although we use them frequently the three credit cards are paid off every month. About the only loans I see in our future is perhaps a car loan if the interest rate is 0% or 1% or something like that and doesn't add to the price of the car.
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Old 08-07-2013, 09:54 AM   #22
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Originally Posted by Katsmeow View Post
That would be unusual. My understanding is that accounts that are in good standing with no negative history generally stay on your credit history for 10 years. (Negative information on an account stays on for 7 years).

So closing an account doesn't take it off your report and doesn't shorten your credit history usually until many years have passed.
I can personally attest to the closed accounts be removed. Both my lost visa card and my paid off mortgage were missing the history statistics from the paper copy of my credit report that was obtained two year later when seeking financing for a new house I was building. i.e. some, not all, of the closed accounts were still shown at the bottom, but no history data was shown for them. Just dashed lines where the zeros for late payments and such should have been.

The credit report specifically listed two reasons I was being dinged.

The first was short credit history. My wife is an accountant and stays on day to day billing like we are a business. Due to this and electronic automatic payments, we have a perfect payment history that goes back to 1985 on all accounts. But almost all of this was missing from our credit report. The paid off mortgage was listed with no data and the credit card was completely gone. The last time I used that card would have been in 2001 when I went to London, so my last activity on the card may have just been over 10 years when they dropped us. Maybe that's why it just vanished.

The second was card utilization. On this one we bought everything on the card (still do, cash back) and paid it off in full every month. We had been doing this since 92. However with the older card gone our total available credit dropped which made the utilization look just over 30% in some months. They don't even track anything that tells them paid in full every month, just that there are no late payments. So somebody that pays in full every time looks the same as somebody that makes minimum payments every time. I would think these two situations are very likely an indicator of how good or bad an individuals finances currently are. But credit reporting agencies don't currently share this opinion. To solve this problem I just called our remaining card company and asked for a limit increase. Today, I have a total of three cards with specific uses to stay away from issues like these. This means I have a silly amount of credit relative to what I actually spend. This is something I would personally consider a negative. But again, credit reporting agencies don't currently share my opinion.
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Old 08-07-2013, 03:05 PM   #23
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While I concede that the insurance carriers use credit score in underwriting, do you really think that if my credit score is high to begin with (775-800) and I kill my Sears card that I never use and has a $12k credit limit that my home and auto insurance premiums will be adversely affected? I wouldn't think so.
I cannot answer your question directly, but after we paid off our mortgage about 10 years ago, my auto insurance agent called unsolicited and lowered our rates. When I asked why, I was told that this particular carrier put people into five tiers of credit rating and we had recently moved to the top tier, and that is how we got the lower rate.
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Old 08-07-2013, 03:11 PM   #24
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Unless you are maxed out on all your traditional credit cards (which I would imagine few people on this forum are), it would seem like carrying store branded cards is just a waste of time and effort.
Store cards can be useful for someone who is trying to establish or reestablish a good credit history. They are generally easier to qualify for than bank cards.

Many retailers offer discounts of 10% or more when you apply for and use their store card for the first time. If you are making a large one-time (or infrequent) purchase, you can save some money by opening a store card.

Having said all that, feel free to not use store cards -- in fact, do whatever pleases you -- with credit cards or anything else.
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Old 08-08-2013, 06:39 AM   #25
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Originally Posted by gozer View Post
Both my lost visa card and my paid off mortgage were missing the history statistics from the paper copy of my credit report that was obtained two year later when seeking financing for a new house I was building. i.e. some, not all, of the closed accounts were still shown at the bottom, but no history data was shown for them.
Apparently this has just recently changed. According to this article the reports now do show payment history and whether the balance is paid in full or carried forward month to month:

Credit reports now show your credit card bill-paying habits
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Old 08-08-2013, 08:21 AM   #26
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Originally Posted by pb4uski View Post
While I concede that the insurance carriers use credit score in underwriting, do you really think that if my credit score is high to begin with (775-800) and I kill my Sears card that I never use and has a $12k credit limit that my home and auto insurance premiums will be adversely affected? I wouldn't think so.
I really have not paid attention to my credit score. I don't know what it is. Is there a link that shows insurance carriers look at the credit score. And what happens when you have your credit frozen with the credit bureaus? Where will the carriers get the scores?
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Old 08-08-2013, 10:52 AM   #27
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Apparently this has just recently changed. According to this article the reports now do show payment history and whether the balance is paid in full or carried forward month to month:

Credit reports now show your credit card bill-paying habits
Sweet, they are coming around.
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