Credit Reports: this is how rigged the game is.
I subscribe to a service which monitors my credit score and emails me when it changes.
For those who don't know, I own a small publishing company. Our biggest event of the year is a convention in July where we release a lot of new titles. In preparation for this convention we have to spend a lot of money with our printer to stock up on products to sell.
Like most small businesses, we utilize our available credit for large expenses. In this case I used a card which had a zero balance and put the majority of our expenses on it, bringing it close to limit.
One of the factors which determines credit score is percentage of balance used to credit line available. You score higher if this percentage is lower.
As I expected when I used near 90% of the available credit on this card, this caused my credit score to drop.
The balance stayed on the card for two or three weeks and then I paid it off completely after the convention. The balance wasn't even on the card long enough to charge me interest.
After this I received another email saying that my credit score had gone up. Makes sense right?
Here's the twist.
My score decreased by 23 points (6/25/2014)
And increased by 13 points (7/12/2014)
A total loss of 10 points due to using one card for a couple of weeks.
Don't worry about me though. My credit is still healthy and it always stayed in the same range, which is the important part.
I'm lucky to be at a point in my life where a 10 point drop in my credit score doesn't really affect me. That wasn't always true though. Like most people I've worked for minimum wage, been a starving student and a retail wage slave. At times like that my credit score being off could have made a difference between getting a student loan or not, being able to replace a dying car, etc.
This is the kind of BS game the credit system plays and it always affects the young and lower wage workers more. Our purchasing power, even our abilities to get jobs and apply for rental housing can be affected by a score calculated by three reporting companies we have little control over.
Doesn't seem right to me. Just putting that out there.
For those who don't know, I own a small publishing company. Our biggest event of the year is a convention in July where we release a lot of new titles. In preparation for this convention we have to spend a lot of money with our printer to stock up on products to sell.
Like most small businesses, we utilize our available credit for large expenses. In this case I used a card which had a zero balance and put the majority of our expenses on it, bringing it close to limit.
One of the factors which determines credit score is percentage of balance used to credit line available. You score higher if this percentage is lower.
As I expected when I used near 90% of the available credit on this card, this caused my credit score to drop.
The balance stayed on the card for two or three weeks and then I paid it off completely after the convention. The balance wasn't even on the card long enough to charge me interest.
After this I received another email saying that my credit score had gone up. Makes sense right?
Here's the twist.
My score decreased by 23 points (6/25/2014)
And increased by 13 points (7/12/2014)
A total loss of 10 points due to using one card for a couple of weeks.
Don't worry about me though. My credit is still healthy and it always stayed in the same range, which is the important part.
I'm lucky to be at a point in my life where a 10 point drop in my credit score doesn't really affect me. That wasn't always true though. Like most people I've worked for minimum wage, been a starving student and a retail wage slave. At times like that my credit score being off could have made a difference between getting a student loan or not, being able to replace a dying car, etc.
This is the kind of BS game the credit system plays and it always affects the young and lower wage workers more. Our purchasing power, even our abilities to get jobs and apply for rental housing can be affected by a score calculated by three reporting companies we have little control over.
Doesn't seem right to me. Just putting that out there.
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