Streams

Please Explain: Credit Ratings

Friday, May 11, 2012

This week we'll find out about credit reports and credit scores and how to manage them effectively. Jeffrey Blyskal, senior editor of  Consumer Reports, joins us to explain how they work and what they mean. 

If you have a question, call 212-433-9692 or leave a comment below. 

Guests:

Jeffrey Blyskal

Comments [34]

Cynthia from Manhattan

OK. Statistically a whole lot of us are and have been unemployed, foreclosed upon and so on. Needless to say no longer have "credit."

ANd then the Feds say the economy is awful in part due to that we're not shopping or buying houses.

Help me wrap my mind around this.

I'm not even sure what my question is...

May. 12 2012 01:39 AM
anna from new york

OK, miracles don't exist and my comment is in a different section of the same section (some split personality)

May. 11 2012 03:40 PM
anna from new york

A miracle! Comments disappear ...

May. 11 2012 02:26 PM
anna from new york

Which credit company cancelled my comment?

May. 11 2012 02:24 PM
Phil from Park Slope

I seem to recall hearing on this show some time ago reporting that credit card companies data-mine purchase history to evaluate creditworthiness. For example, people who buy certain products or shop at certain merchants will be flagged as more risky. Is this true?

May. 11 2012 02:02 PM
Sophie from Poughkeepsie, NY

Lots of foreclosures and lots of people now with crappy credit. It's not going to matter as much as did in the olden golden days. Especially if you make a good salary.

Also, credit agencies should and (i believe) will become obsolete.

May. 11 2012 01:59 PM
cait from brooklyn

My husband and I have a joint bank/credit card account. He has good credit, mine is weird. If we are going to apply for a home loan, should we separate our accounts now so that my score doesn't affect his when it counts?

May. 11 2012 01:58 PM
Katie from Nanuet NY

I recently applied for a car loan, and my credit score came back from both VW credit & Bank of America. I was approved by VW credit, but denied by Bank of America because I don't have long credit history and I have a relatively low line of credit. I'm 26 years old and only have one credit card that I pay off in full whenever I use it, and I tend not to use it often because I don't want to spend beyond my means. But despite my 800 credit score, I was still deemed too much of a risk by Bank of America - why?

Additionally, after I was notified of being turned down, I requested a credit increase on the one credit card I have to increase my available credit. My request was denied however, with the simple explanation that a credit increase was not available on my account at this time. I've never missed a payment and have always paid my balance off in full. When I talked to a representative, I was then told I may have been denied because I haven't used my card every month in the past 12 months. Could this really be the reason? I don't use it every month because I try very hard to be responsible and not spend money I don't have - why is this being counted against me?

May. 11 2012 01:57 PM
mattymac from Forest Hills

I have to disagree with the guest on the point that multiple inquiries do not negatively affect your rating.

While getting pre-approvals for a mortgage, a couple of months apart:

"Too many inquiries" was cited and attributed negatively on the credit report.

May. 11 2012 01:55 PM
Chris Hill from Manhattan

If closing a credit card account would lower my credit score, is there any way to get rid of a card that I don't use, whose annual fee I don't want to pay, and which leaves me open to identity theft if the account information falls into the wrong hands?

May. 11 2012 01:54 PM
george schorr from jersey city

how does someone get a loan in my name without my knowing about it?

May. 11 2012 01:52 PM
jackie

WhAT ABOUT "CHURNING" CC'S FOR FREQUENT FLYER AIR MILES?

May. 11 2012 01:51 PM
Corrinne from Manhattan

Are Credit agencies exempt from lawsuits. Can consumers sue if the agency has erroneous information that negatively affects us.

May. 11 2012 01:51 PM
Amy from Manhattan

Could the show post links to the legitimate sites, like the opt-out site Mr. Blyskal just mentioned? Does the URL have hyphens, or is it all 1 word?

May. 11 2012 01:49 PM
Antonio from bayside

Why don't free report bureaus supply scores if they are the holy grail?

Another fantastic show!

May. 11 2012 01:49 PM
LL from UWS

Please clarify:
For whose benefit do Credit Rating Firms exist?

Is there any conflict of interest or 'follow the money' aspect that consumers should be aware of?

Does the system need reform?

Thanks.

May. 11 2012 01:49 PM

Between this and the current news out of Khase®, do we really need any additional data to prove the Korruption™ in our banks??

What a BUNCH of unmitigated CRAP!

May. 11 2012 01:48 PM
Kerstin Costa from NY NY

My husband, who is a French citizen and recent immigrant to the US, cannot get a credit card for lack of a credit history IN THE US. He is employed in the US and earns 6 figures, he has a checking account with a major US bank, and a perfect credit history in France, with a bank account and credit card in France with a major French bank. It seems ridiculous that the only way he can begin to develop his credit history here is to buy higher-priced items, such as televisions and mattresses (or other items that we don't need), on "credit" to build his credit history in the US. There must be a better way for him to build his credit history - ?

May. 11 2012 01:48 PM
SL

I have never had debt, paid attention to my credit score, was a good citizen. Last year I was diagnosed and treated for cancer. The fraudulent insurance company, Assurant (google them) denied my claims under the guise of "pre-existing condition." I fought within the system, all while being treated with chemo and radiation. They reversed the decision, but by then the hospitals, doctors groups had put the bills into collection. That is when I gave up, have opted out of the system. It is corrupt to the core. Why are we so compliant and enslaved by these brutish scores? Isn't there a better way? Can we just say no?!

May. 11 2012 01:47 PM
Ramaswamy from New Jersey

Leonard, Re. your question about "Pre-Approval", I believe they get away with it because it is a play on the word. Pre-Approved can be construed to mean that you have gone through the pre-approval (initial screening) process successfully.

Ramaswamy

May. 11 2012 01:44 PM
Mary Martin from Weehawken, NJ

Bank of America closed three dormant accounts (no balances due) - but it reads very negatively on my credit report. The bank will not acknowledge that they were dormant accounts. Also, can he recommend a service to do the leg work to clean up a not so great report? I don't mind paying if they correct all the mistakes because I should have a near perfect score.
Thanks,
Mary

May. 11 2012 01:44 PM
Mike from Queens NY

How about those pre-printed checks I keep getting from my credit card companies? how much of a risk do they pose if someone gets their hands on them? Do I HAVE to buy a shredder?

May. 11 2012 01:43 PM
Melissa

If you short-sell your house resulting in a bad credit score, what is the best and/or fastest way to build it back up?

May. 11 2012 01:40 PM
Listener from NYC

This is ridiculous. Credit cards fees and interest rates are designed to gouge consumers who can easily make mistakes and incur penalties - this is how lenders and banks make their money. So basically, someone (like me) who refuses to play the credit card game risks having his or her financial health imperiled, which impinges on his or her ability to move forward in many aspects of life.

May. 11 2012 01:39 PM
Rudy from queens

Most people know you're entitled to your credit report free from each of the three major agencies once a year. Most people DON'T realize those reports do NOT include your FICO score. Any way to get that free? Also, I hear a person's score actually varies, even within one agency, depending on situation or request or something. Details on that?

May. 11 2012 01:37 PM
Glen Brydon from Wyckoff NJ

From Wikipedia:
A pioneer credit score company, FICO was founded in 1956 as Fair, Isaac and Company by engineer Bill Fair and mathematician Earl Isaac.[2] FICO was first headquartered in San Rafael, CA, United States.[3]

Selling its first credit scoring system two years after the company's creation,[2] sales of similar systems soon followed. In 1987 FICO went public.[2] That year also saw the introduction of the first general-purpose FICO score when BEACON debuted at Equifax.[2]

Originally called Fair, Isaac and Company, it was renamed Fair Isaac Corporation in 2003.[2] The company rebranded again in 2009, changing its name and ticker symbol to FICO.[4]

May. 11 2012 01:33 PM
Amy from Manhattan

Is community-supported agriculture, in which community members pay up front to buy shares in a farm to help the farmers buy seed & have money to live on during the planting season & then get food deliveries from the farm over the growing season, a form of credit? Or is it a sort of reverse credit?

May. 11 2012 01:31 PM
Glen Brydon from Wyckoff NJ

Credit scoring and business consulting firm founded in 1956 by Bill Fair and Earl Isaac as "Fair, Isaac and Company." Merged with HNC Software Inc. in 2002

May. 11 2012 01:29 PM
LL from UWS

Correction to what guest said about debt and capitalism:
LUCK rather than character is what mostly determined whether debts could be repaid in the beginnings of modern capitalism.
Whether you ship sinks, not whether you're a cheater.

I hope this segment can be repeated with a woman guest to explain credit ratings for the average housewife, as it were.

May. 11 2012 01:28 PM
Fiona from Bronx

So much for protecting my identity...I was fortunate enough to pay off my mortgage early, and have been inundated with emails from credit-rating orgs, companies offering to loan money, telling me my credit status has changed...we're talking dozens of emails daily since the day I paid off my loan. Did the bank (Chase) share my information or do the credit bureaus see that I've paid, and have me targeted?
Thanks!

May. 11 2012 01:24 PM
nick from nyc

If i negotiate a discounted rate with a medical provider BEFORE ghe bill is sent to a collection agency, will it affect my credit ratjng??
How bad is it to cancel a credit card??

May. 11 2012 01:24 PM
LL from UWS

Leonard was referring to THE JUBILEE YEAR in the Bible....Debts are forgiven, slaves are freed.....
See Wikipedia.

SNIPPET: "he year of Jubilee in both the Jewish and Christian traditions is a time of joy, the year of remission or universal pardon. In Mosaic law, each fiftieth year was to be celebrated as a jubilee year, and that at this season every household should recover its absent members, the land return to its former owners, the Hebrew slaves be set free, and debts be remitted (see Jubilee (Biblical)).

The same conception, spiritualized, forms the fundamental idea of the Christian Jubilee, though it is difficult to judge how far any sort of continuity can have existed between the two. It is commonly stated that Pope Boniface VIII instituted the first Christian Jubilee in the year 1300"

May. 11 2012 01:23 PM
crez from NJ

It is really sad how we have been bamboozled into thinking our "credit score" is one of the most important elements of our lives. We don't mean more credit scoring, we need to be scored on what we can for for WITH CASH!! I'm no Occupy guy, but the emphasis on these scores is disgusting!
The $ in your wallet and bank account don't lie; only our lenders do!

May. 11 2012 01:19 PM
Rudresh Mahanthappa from Brooklyn

Who uses Vantage? Who uses FICO? Does it matter? I never hear anyone talk about their Vantage Score.

May. 11 2012 10:37 AM

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