Please Explain: Credit

Friday, January 09, 2009

Credit, and its misuse, are major causes of our current economic crisis. On Please Explain, find out about the pros and cons of credit, how it's evolved in recent years, and what role it can now play in an economic recovery. Jeffrey Blyskal is a Senior Editor with Consumer Reports.


Jeffrey Blyskal

Comments [53]

anna from new york

Yes, Leonard, the ancient had a better understanding of societies than Americans. Yes, ancient Jews had sabbaticals (which you mentioned) and jubilees - both mechanisms of preventing excessive polarization of the society. Sadly, the self declared "best and brightest" Americans who believe that the rich are rich because they deserve to be rich are happy with a different model - the one which allows the most ruthless accumulate insane wealth. "No problem," say Americans as long as absolute criminals drop their dirty underwear to their victims for self-satisfaction, self-promotion and tax benefits.
Something rotten in ...

May. 11 2012 01:53 PM
jerry from las vegas from las vegas nev.

what agency private or governmental gave the three credit reporting agencies the right to gather and disseminate information to any insurance or bank that calls up for your info which i believe should only be given with your permission.also there system does not make sense to me.

Feb. 15 2009 03:23 PM
Elaine from Queens

Hi Leonard,

I had a similar problem with Time Warner... It just so happened that I had to go into their office during that period of time to exchange my router for a new I took my problem to them as well, made an issue of it and they not only resolved it but gave me discounted services for a year...Going into their office is time consuming but worth it...Try it!!

Jan. 09 2009 05:18 PM
Lance from Manhattan

Also, don't other organizations use information in your credit report in ways that affect the services you are offered and how you are otherwise treated by them?

Example -- human resources doing background checks when you apply for a job

Do the immigration agents at the airport tap into credit report info?

Jan. 09 2009 01:57 PM
Stuart from Providence RI

I have a credit card balance with Bank of America. I would like to transfer my balance there to a credit card issuer that has more social responsibility such as Working Assets, would this effect my credit score for transferring a balance? please explain. thank you

Jan. 09 2009 01:57 PM
Michael Miernik from Tarrytown, NY

I froze my credit reports after a fraud problem. Can I get my credit reports without paying to unfreeze them just for the report?

Jan. 09 2009 01:56 PM
Sandra from Warwick, NY

When my husband and I were buying our first home, i learned my husband's first wife appeared on my credit report. You see, her first name is the same as mine. Her address and credit were on my report. It took a couple of letters and phone calls, but it was rectified pretty promptly.

Jan. 09 2009 01:55 PM
Lance from Manhattan

I've read that your address actually does affect your credit rating (and insurance rating). Fifth Ave vs. the Bowery. If that's the case, it does make a difference to get inaccurate addresses off your report.

Jan. 09 2009 01:54 PM
Jason from NY

Doesn't getting your credit report NEGATIVELY impact your credit rating?

Jan. 09 2009 01:54 PM
Kerrie from Bronx NY

Does unpaid Healthcare Bills affect your credit? I have heard they do not is this true?

Jan. 09 2009 01:52 PM
Brian Nishii from nyc

My wife and I are in the midst of playing the balance transfer game. We currently have 7 credit cards, and am about to wipe out 3 of them to a $0 balance. We heard that closing an account is not a good idea for your credit score. Is that true?

Jan. 09 2009 01:52 PM
ak from brooklyn

the free credit reports you can get from the 3 major credit agencies do not include the credit scores! is that legal? it says i need to pay in order to get the scores. please clarify this. thanks.

Jan. 09 2009 01:51 PM
Fuva from Harlem, NY


Should I use govt student loan to pay off $6000 in credit card debt?

Jan. 09 2009 01:51 PM
Leonard from New York

I am in the middle of refinancing my mortgage. The lender told me my credit score was above 800. I heard you said dept store credit cards hurt my credit score. Will cancelling my Home Depot card and Sears card help to even lower my final interest rate?

Jan. 09 2009 01:51 PM
chris from manhattan

If your loan payment is $600 and i pay $1000, shouldn't specifying that the extra is going to principle shorten the life of the loan?

Jan. 09 2009 01:50 PM
Michael West from Green Wood Heights, Brooklyn

My wife and I never carry a balance. This should be good for our credit scores, but so much is counerintuitive in this business... Please tell me more!

Jan. 09 2009 01:49 PM
nyc from nyc

How adversely does filing for bankruptcy affect your credit? What about tax payment problems?

Jan. 09 2009 01:49 PM
Kate from Tuckahoe, NY

Couldn't the previous caller (with the $40,000 loan) tell her current bank that she will transfer the loan to another bank if they don't lower her interest rate? She should say that she has found a bank that will get her a better rate, can they match it?

Jan. 09 2009 01:48 PM
Wendy from Brooklyn

Why is it that there is nothing that makes credit rating agencies accountable for getting the information right. Credit reports are notorious for having errors, and yet these errors can have huge consequences for the individual, even precluding them from purchasing a home. The only way to contact these agencies is by mail (you cannot contact them by phone), and clearing up these errors can be very difficult. I was applying for a HELOC and there was an old hospital bill (a large one), which had long ago been cleared, still on my credit report. I couldn't reach the agency. I called the hospital and they said it had been settled and I'd have to deal with the agency. Luckily, my score was good enough to still get the credit line, but I could have been blocked because of this. How can they have so much influence on our lives without having to have responsible reporting?

Jan. 09 2009 01:48 PM
Meghan from inwood

I heard you guys mention library books. My partner did get 50 points taken off of his credit score because he didn't return two books before we moved back to NYC from MD. I don't know if all libraries report it, but ours in Frederick definitely had.

Jan. 09 2009 01:48 PM

Leonard: "Houses are cheaper than ever.." Where? Not in NYC? They are still overpriced. I am hoping that prices soften to a sane level.

Jan. 09 2009 01:47 PM
Luis Damian Guell from Fairview NJ

Hi Leonard, I have 3 credit cards with "0" balance which I have not cancelled because I have heard that closing a credit card account can hurt my FICO (822 as we speak) is this true?
Thanking you in advance Luis Damian Guell

Jan. 09 2009 01:45 PM

If I have credit cards with department stores but never use them is that still bad? Should I close the accounts?

Jan. 09 2009 01:44 PM
Edward from NJ

It seems like more store credit cards are actually issued by banks rather than finance companies. Just two examples I've noticed recently: Sears credit is run by Citibank. Pier 1 credit is run by Chase.

Jan. 09 2009 01:43 PM
PJBeee from Ridgewood NJ

Why is the fact that paying your bills absolutely on-time makes you more "credit-worthy" in the first place? That's just arbitrary and bogus.

And why do people accept wildly usurious late fees? I hope the usury laws are changed to at get rid of these fees, or at least reduce them dramatically.

I try to always pay my bills on time, and in full, and if I call the company, I can usually get the late fees rescinded on the rare occasion that I miss a payment.

Jan. 09 2009 01:43 PM
Stephanie Longo from Colorado

When I get information about my credit score they always say my score would be higher if I carried revolving debt. I have two credit cards that I use every month, but I pay the balance in full every month.

Jan. 09 2009 01:43 PM

Can you block companies/banks from accessing your credit without your permission?

I get a lot of requests for credit cards, and an worried that these requests might lower my credit score.

Jan. 09 2009 01:43 PM
Lisa Mangano from Park Slope

I requested my three free credit reports in September 08 to discover that Experian had the name, social security number and credit information of another person in my file. It took weeks to sort out.

I would highly recommend that everyone take advantage of their right to receive their three free credit reports each year and take the time to review each for discrepancies.

Jan. 09 2009 01:43 PM
jude from brooklyn

does canceling cards after you pay them off hurt your credit?

Jan. 09 2009 01:43 PM
Christine from NewJersey

Two questions:

1. If your accounts are cancelled for non-use, does this lower your score?

2. If you have accounts that you would like to cancel because you do not use them, will this lower your score?

I apologize if this has already been addressed. Thanks.

Jan. 09 2009 01:40 PM
Mark Dorfman from New York, NY

Does it hurt your credit score to close credit cards that you no longer use?

Jan. 09 2009 01:40 PM
Tony from DUMBO, BKLYN

I do not have any credit cards at the moment. I owed an amount which i paid off last year but i am looking into rebuilding my credit and buy a place in the future should i go about rebuilding it? any Advice what to apply for to start credit again?

Jan. 09 2009 01:40 PM
David Rockwell from Montana

I found the credit report does not include a credit score. I only described my credit history. On the websites, it said I had to pay $8 to get my score. Did I pay $8 that I didn't have to?

Jan. 09 2009 01:40 PM
Moiz (like boys with an 'M') from NJ


Can you ask your guest if it is bad to constantly sign up for cards and cancel them? Does it have any adverse effect on your credit score, or how your credit might be interpreted?

Jan. 09 2009 01:39 PM
margaret from morristown

Love these pls explain segments.

NOTE you can get free credit reports but you have to pay for your credit scores. They are not included in the report.

Jan. 09 2009 01:39 PM
Jon P. from Hewitt, NJ

2 credit cards that I never use just canceled on me because I don’t use them. Will this hurt my credit score?

Jan. 09 2009 01:39 PM
Jay from Norwalk, CT

Consumers are allowed access to free yearly credit reports but not the score. Isn't the score just as important? Why isn't this free, why don't consumers have free access to something that finance companies do.

Jan. 09 2009 01:39 PM
Douglas from Midtown

Wondering if your credit score takes into account - for credit cards - the amount of total available credit aggainst total balance for each card. Is my score worse for having large balances, but up on payments, against a card with low balance?

Jan. 09 2009 01:38 PM
Debt-free dude

I opted out of the consumer credit system in my early 20s because I find the entire system corrupt and usurious. (As borne out by recent events.) Now, after 20 years of living on cash only, I'm considering taking a mortgage to mortgage a home. Should I expect that my FICO score is low, because I simply do not exist to the credit card/consumer debt system?

Jan. 09 2009 01:38 PM
Howard Jaffe from Manhattan

I've heard that the amount of your credit card line of credit is considered outstanding credit in calculating FICO scores. If that's true, will credit card companies willingly reduce your line of credit?

Jan. 09 2009 01:38 PM

How do contested medicals bills affect credit scores? It seems to have become common for medical providers to make mistakes, bill patients when they were supposed to bill insurance companies, etc. It can take time to straighten this stuff out. Any suggestions on dealing with this sort of thing?

Jan. 09 2009 01:37 PM
suki shackelford from williamsburg

You can get your autom credit score here:

The only problem is that it goes on your credit score as a hard inquiry. Is this bad?

Also - does American Express NOT use the major credit reporters?

Jan. 09 2009 01:37 PM
Steve from Baltmore

I'm a medical researcher and I encounter privacy issues with our patients everyday. We have very strict legal regulations around what information we have access to (and for good reason). How is it possible that credit agencies have so much more access to individuals information than do health researchers?

Jan. 09 2009 01:37 PM

Your guest just commented on something that happened to me. I applied for auto financing last year and was surprised by the credit scores that the finance advisor had pulled for me. They were much lower than what I knew they were since I regularly monitor my and my husbands scores and reports. When I checked my own credit scores the very same day, I was shocked to see the scores were as much as 200 points different for one bureau and about 100 points different for another. It's shocking and really frustrating that we try to stay ontop of information, but we don't have all the information.

Jan. 09 2009 01:36 PM
Jay from Norwalk, CT

We are allowed free yearly credit reports but not free credit scores..Isn't the score just as important? Why isn't this free?

Jan. 09 2009 01:36 PM
joan witek from lower manhattan

I take it that Bank Cards are not included in these credit checks.
If you have never borrowed money and do not have a credit do they rate you?

Jan. 09 2009 01:35 PM
Sheila from Brooklyn

what is the most secure way to get my credit report?

Jan. 09 2009 01:34 PM
john from manhattan

I also wanted to know how to get one's credit(fico) score for free, without going through hoops to receive it?

Also, can closing an account in good standing hurt one's current score?

Thank You

Jan. 09 2009 01:31 PM
Melissa from Sunset Park

I'm about to look for a new apartment and a lot of the advertisements I see say that there will be a credit check along with the application. Are they looking for a credit score or a credit report? If I put in applications for multiple apartments and therefore my credit gets checked multiple times, will that hurt my score? Would you suggest that I get my own free credit report and give out copies?

Jan. 09 2009 01:29 PM
Stephen from Brooklyn

Credit card companies ahve been cancelling my cards, despite excellent credit because I haven't been using them.

Please explain...

Jan. 09 2009 01:26 PM
steve dutton from UWS

I read years ago, your FICO score is influenced not only by paying your bills, but when you pay them. For example, someone who pays their mortgage 1 day early from the due date gets a better score than someone who exploits the grace period by paying 10 days late (on a 15 day grace period). Is this true? I always pay my bills a day or 2 early, hoping it improves my rating.

Jan. 09 2009 01:10 PM
antonio from park slope

A mortgage broker told me when they check your fico score to check your worthiness, they will always take the middle score (out of the three). When I asked why, he didn't really have a good answer.
Can you explain why the credit industry is fraught with this kind of willy nilly nonsense?!

Jan. 09 2009 12:58 PM
mc from Brooklyn

I got my credit report for free once; apparently you can ask each of the three agencies one a year. I got the report but creditors always want to know your score. Is there any way to get your score for free without subjecting yourself to endless spam?

Jan. 09 2009 12:33 PM

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