Racking Up Points On Your Credit Score

Wall Street Journal ^ | 22 April 2008 | ELEANOR LAISE

[shrinkermd]

As Lenders Tighten Standards, Potential Borrowers Focus On Ways to Raise Their Ratings; Joining the '700 Club'

...So when Mr. Sheldon was shopping for an auto loan last fall, he first compared rates online. Then, he allowed only two lenders to pull his credit report because he knew that lots of inquiries could drag down his score. Now, he's making extra payments so he can pay off the five-year auto loan in 3½ or four years. He figures the lower debt level will boost his score, which already is near the upper end of the 300-to-850 range of the FICO score, the widely used measure of consumer creditworthiness.

"It's a game you have to play," Mr. Sheldon says. Once every few months, he charges something on one of his lesser-used credit cards because he fears that issuers will close inactive accounts, reducing his total available credit and damaging his score.

The behavior of credit-score strivers can appear bizarre to the uninitiated. Many rejoice over joining the "700 club," feverishly apply for new credit cards they don't need, keep drawers full of old credit cards they barely use and fight for the removal of the smallest blemish on their credit reports.

Even consumers with good credit, like Mr. Sheldon, are pushing to improve their FICO scores -- and with good reason. Whereas just a year or so ago a score of roughly 680 to 720 would qualify for the best rates from many lenders, that bar has now been raised to 720 to 750, credit experts say.

Many lenders are demanding higher scores because they've been burned by rising delinquency rates. In the fourth quarter, consumer credit delinquencies hit their highest level since 1992, according to the American Bankers Association.

"The rules have definitely changed," says John Ulzheimer, president

[CSM]

“Like the ad shows, a swipe of the card is faster than counting out change ...”

Not true at all. When I make a cash purchase I am the fastest transaction in line at the store and I usually get the look of appreciation from the clerk. I will admit that I only use the bills and never count out coins.

In addition, I have the added bonus of being very tight with that cash and it ends up with me spending less than most credit users.

[College Repub]

You can rent in *most* places without a credit card. You may need to put down a rather large cash deposit and prove your SSN # or agree to a large hold on a debit card.

Basically, the main reason they want a credit card is it’s a bit of a schmuck strainer. Many of the people they truly don’t want to rent their car are unable to obtain an unsecured credit card.