Personal Finance

Good Credit: How It Really Works & What They Never Tell You

  • Last Updated:
  • Feb 21st, 2010 4:21 pm
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Deal Expert
User avatar
Dec 19, 2001
30076 posts
1342 upvotes
Fernando Po
Had one active credit card, one joint account card (under my wife's name), and one that I never activated after a year but have had for 15 years (I imagine its been closed by now). Anyway, I closed the only card in my name, but I have zero debut and have for years. Still okay?
Newbie
User avatar
Apr 28, 2007
27 posts
Regina, SK
I wish I had gotten in on this conversation a little earlier.

Credit scores are made up of many different factors..
Credit exposure is one of the factors...
How many hard inquiries you've got..
How many negative items are reporting
How many postive items are reporting
If you're maxed out on your credit
How long you've had your credit items listed
etc...

If an item, like your mortgage doesn't show up on your credit report, then it doesn't affect your credit score.

Keep in mind that both equifax and transunion will report different items about you.

By law, You can get a free credit report by writing in for it to equifax and transunion. You have to purchase your credit report in order to get the credit score though.
[OP]
Jr. Member
Oct 15, 2008
166 posts
3 upvotes
Vancouver
taylyn wrote:
Jan 20th, 2010 11:10 am
what else she can do to raise the score before her mortgage renewal comes up next year...
OMG I forgot that was her main concern. Anyway, tell her to relax. Mortgage renewals have absolutely nothing to do with your credit. They don't even check your credit at all when you go to renew. But make sure she goes and negotiate the best rate she can to save herself money. at least a percent off the posted rate.
Member
Feb 11, 2004
260 posts
21 upvotes
Kamloops
My employer (hardware retailer) performs credit checks on potential new hires. Maintaining good credit is quite important, even if you aren't looking for loans.

Information older than 7 years gets erased right? If so my only blemish should be gone this year (mine and Shaw's missing-modem debacle of 2003).
Newbie
User avatar
Apr 28, 2007
27 posts
Regina, SK
regular credit items are held on the credit report for 6 years..
bankruptcies are held on the credit report for 7 years

double bankruptcies are on the credit report for up to 14 years

This is all based on provincial law...
Member
Feb 11, 2004
260 posts
21 upvotes
Kamloops
Oh cool I'm in Sask. too, so your information should be accurate for me.

Time to request my report again, and see if it's gone!
[OP]
Jr. Member
Oct 15, 2008
166 posts
3 upvotes
Vancouver
montyloree wrote:
Jan 20th, 2010 4:48 pm
If you're in Saskatchewan, you can always contact Consumer Protection in Regina... they oversee the Credit Reporting Act here
You appear to work in the credit rating industry. Can you confirm whether a frequent change in job or address affects a person's credit rating if this information is reported to the credit agencies? I have always been told that it does but some people on here seem to think otherwise. Can you confirm?
Newbie
User avatar
Apr 28, 2007
27 posts
Regina, SK
Markenstein,
The only time your address is reported differently to a credit reporting agency is if you move, and then apply for new credit, or update your address with and existing creditor. It makes sense, as this is what the creditor has only file and reports to the credit bureau each month.

The credit bureau basically confirms what you tell a creditor on a loan application. If you tell a potential creditor that you lived at 3 places in the last six years, they'll be able to confirm these addresses with the credit bureau.

several addresses has more to do with the creditors rating software.. If you've moved around a bunch or had several jobs, this tells the creditor that you are less stable... Less stable implies less reliable. This is as compared to somebodyo who has worked at their job for 20 years and who has lived at the same address for 20 years. It's all about determining credit risk for them.

Hope that helps.
Deal Fanatic
Dec 11, 2008
9569 posts
1265 upvotes
I have a very old credit card, about say 10 years old ($5k limit). Another one which might be 8 yrs old (don't even use it and don't even know the credit limit).

I plan to cancel my latest card (about 2 yrs old - $10k limit) and sign u pfor a new one. HOw will this affect my credit score?
Member
Nov 13, 2001
386 posts
2 upvotes
Ottawa
taylyn wrote:
Jan 20th, 2010 11:10 am
That's what we thought. She has a mortgage, a loan for a vehicle, 4 credit cards nearing the maximum, but all paid on time, at least the minimum, and a LOC nearing the maximum but always paid on time. She has had the cards anywhere from 2-5 years, LOC for one year, car loan for 2 1/2 years. There is one disputed charge but because the report says it's 120+ not paid, she's just going to pay it. Credit overall is pretty good, so we figure it's because she is near max on the credit cards and the 120 late payment one. All this and she gets a 514??? If she works at paying off the balance in the next year, no late payments, gets rid of that disputed balance, and the additional year of credit, is it possible to get the score up to 650+? We can't figure out what else she can do to raise the score before her mortgage renewal comes up next year...
May be a silly question, but why does she care what her credit score is with all that debt? Does she want to apply for more debt, I mean credit?!? If she focuses on getting all that debt paid down, her credit score will work itself out.
Jeeps are cool!
Newbie
Oct 23, 2005
67 posts
Application for a 30K car was rejected by Nissan financing (bus manager said "slow credit" was the reason) but approved by Scotiabank at higher interest rate. We decided it was not worth paying the extra interest and we would wait a few months. We had 2 $500 credit cards and 2 department store cards for over 5 years of which one cc is used frequently and paid off every month.

We were approved for a mortgage and a $8K credit card a month later. The bank said we have excellent credit Did Nissan make a mistake? This doesn't make sense to me! Should we go back to the dealer or just call Nissan Finance to see what the problem is?
Deal Addict
Feb 4, 2008
3132 posts
177 upvotes
Markenstein wrote:
Jan 20th, 2010 4:03 pm
OMG I forgot that was her main concern. Anyway, tell her to relax. Mortgage renewals have absolutely nothing to do with your credit. They don't even check your credit at all when you go to renew. But make sure she goes and negotiate the best rate she can to save herself money. at least a percent off the posted rate.
On rare occasions lenders have asked people to re qualify when they renew. This means checking credit and employment. What causes this? Who knows, it could be just a random check.

In all probability if you have never been late or missed a mortgage payment you should be fine. Although, poor credit does limit your options if you want to get a better rate at a different lender when you renwew.
www.mortgagecalculatortoolkit.com

Do your mortgage math correctly!
Deal Addict
Feb 4, 2008
3132 posts
177 upvotes
Sweeta wrote:
Jan 28th, 2010 1:40 pm
Application for a 30K car was rejected by Nissan financing (bus manager said "slow credit" was the reason) but approved by Scotiabank at higher interest rate. We decided it was not worth paying the extra interest and we would wait a few months. We had 2 $500 credit cards and 2 department store cards for over 5 years of which one cc is used frequently and paid off every month.

We were approved for a mortgage and a $8K credit card a month later. The bank said we have excellent credit Did Nissan make a mistake? This doesn't make sense to me! Should we go back to the dealer or just call Nissan Finance to see what the problem is?
Lenders, lend based on risk. If historical data shows that X% of people with credit, income etc similar to your defaulted then they may chose not to lend you the money.

Scotia obviously is ok with the risk, but has attached a premium to it.
www.mortgagecalculatortoolkit.com

Do your mortgage math correctly!
Member
Jul 17, 2007
226 posts
20 upvotes
Vancouver
Sweeta wrote:
Jan 28th, 2010 1:40 pm
Application for a 30K car was rejected by Nissan financing (bus manager said "slow credit" was the reason) but approved by Scotiabank at higher interest rate. We decided it was not worth paying the extra interest and we would wait a few months. We had 2 $500 credit cards and 2 department store cards for over 5 years of which one cc is used frequently and paid off every month.

We were approved for a mortgage and a $8K credit card a month later. The bank said we have excellent credit Did Nissan make a mistake? This doesn't make sense to me! Should we go back to the dealer or just call Nissan Finance to see what the problem is?
It is amazing: people that have '2 $500 credit cards and 2 department store cards for over 5 years' want to buy a 30K car ?! Why did not you increase your credit line 4-2 years ago? How did you manage to live with $1k+ credit line? If you buy a 30K car and take a mortgage, you are not teenagers...

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