Re:Credit Card Debt Collection
by kelnos on Wednesday September 13, 2023 @06:43PM
(#37502671)
> Someone who has little but doesn't spend too much will generally have good credit.
No, that metric has nothing to do with it. The main things that affect your credit score are a) age of oldest credit line, b) on-time payment history, c) amount of available credit, d) credit utilization.
While "not spending too much" can be correlated to (b) and (d), it's not always a particularly strong correlation.
And even if you do all those things right, one bill -- even for $50 -- sent to collections (because your automated bill pay randomly stopped working and you didn't notice for several months -- this happened to me) can knock 50-100 points off your credit rating. Sometimes you can get this fixed, but the biller has no obligation to send a correction to the credit bureaus even if you pay the $50 and explain why you missed the bill. Enjoy waiting 7 years for that negative report to "scroll off" your score calculation. It just did for me a few months ago, and despite the fact that I have otherwise excellent credit, I was surprised how much my score went up after this was off my record.
No, that metric has nothing to do with it. The main things that affect your credit score are a) age of oldest credit line, b) on-time payment history, c) amount of available credit, d) credit utilization.
While "not spending too much" can be correlated to (b) and (d), it's not always a particularly strong correlation.
And even if you do all those things right, one bill -- even for $50 -- sent to collections (because your automated bill pay randomly stopped working and you didn't notice for several months -- this happened to me) can knock 50-100 points off your credit rating. Sometimes you can get this fixed, but the biller has no obligation to send a correction to the credit bureaus even if you pay the $50 and explain why you missed the bill. Enjoy waiting 7 years for that negative report to "scroll off" your score calculation. It just did for me a few months ago, and despite the fact that I have otherwise excellent credit, I was surprised how much my score went up after this was off my record.