Author Topic: Lack of established credit references . . .  (Read 524 times)

GuitarStv

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Lack of established credit references . . .
« on: June 09, 2021, 03:59:13 PM »
I recently applied for a credit card because Amazon promised me 30$ of free money if I did . . . but have been rejected for the card.  This is pretty odd for me.  I've never been rejected for a credit card before in my life, and figured that my credit was pretty good.  The reason given in the application was 'lack of established revolving credit references'.  Is this something I should be worried about.

Things have been going pretty well in my life, and I'm at a point where I'm debt free.  Paid off my mortgage, have no car loan, no debt at all.  I do have bills that I pay regularly (tax, utilities, etc.).  My wife and I both share our bank and a credit card, and our credit card is used often and paid off in full at the end of each month.  It has been years since I last applied for any kind of credit.

Now, I don't really care about the credit card and can live without the free 30$ from Amazon.  I don't really see any serious need in the future for credit.  But should I be worried about this credit rejection?  And what should I do to improve my credit score?

seemsright

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Re: Lack of established credit references . . .
« Reply #1 on: June 09, 2021, 10:29:52 PM »
The Amazon card can be hard to get from what I have read, you need a credit score of 640 to get it from a quick google.

I suggest you find at least one account that helps your credit score. This could be a credit card that you pay for something on every month. This could be groceries, or you put one of your bills on it.

We all think being debt free is a great thing and it is. But it takes a amazing about of work to still play with societies rules. We put gas on the credit card and I have to admit I buy way two much crap from Amazon because I do not need to leave my house, drive in traffic, deal with people, and find the said object at 5 different stores in a hide and seek format.

We use credit cards, and invest all of the cash back. We make about a $1,000 a year doing so. We just pay them off every month.

Keep up your credit score...you may need it some day. I view keeping my credit score up as a investment in the future. I may never need it but if it is high if I ever do need it, the money I barrow will be cheaper.

GuitarStv

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Re: Lack of established credit references . . .
« Reply #2 on: June 10, 2021, 07:05:31 AM »
The Amazon card can be hard to get from what I have read, you need a credit score of 640 to get it from a quick google.

I suggest you find at least one account that helps your credit score. This could be a credit card that you pay for something on every month. This could be groceries, or you put one of your bills on it.

We all think being debt free is a great thing and it is. But it takes a amazing about of work to still play with societies rules. We put gas on the credit card and I have to admit I buy way two much crap from Amazon because I do not need to leave my house, drive in traffic, deal with people, and find the said object at 5 different stores in a hide and seek format.

We use credit cards, and invest all of the cash back. We make about a $1,000 a year doing so. We just pay them off every month.

Keep up your credit score...you may need it some day. I view keeping my credit score up as a investment in the future. I may never need it but if it is high if I ever do need it, the money I barrow will be cheaper.

640?  640 is a shit credit rating.  I've never missed paying a bill or credit card balance in my life.  I've had and used a credit card continuously since I was 18, and typically use the credit card to make all my purchases (groceries, gas, most orders in stores).  The last time that I got my credit checked was when I was applying for my mortgage, and it was in the 800s.

I'm trying to understand why my credit score would have dropped so much.  Does paying off your mortgage and not having any loans significantly negatively impact your rating?  That seems weird.

cool7hand

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Re: Lack of established credit references . . .
« Reply #3 on: June 10, 2021, 07:10:12 AM »
posting to follow

ender

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Re: Lack of established credit references . . .
« Reply #4 on: June 10, 2021, 07:14:35 AM »
I've learned not to trust companies in this regard or their reasons. Amex rejected me a while back and gave these reasons:

Quote
The total balance on your credit card accounts, which in our estimation you do not pay majority of the balance, is too high (Experian)

Too few credit card accounts on which, in our estimation, you have paid a majority of the balance in recent months. (Experian)

The length of time is too short since the first account on your credit report was opened. (Experian)


I only ever paid credit card interest once and that was 10+ years ago when I accidentally set an autopay to be minimum vs statement balance (the interest was like $2). And I've had a credit account for almost 15 years.


seemsright

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Re: Lack of established credit references . . .
« Reply #5 on: June 10, 2021, 07:19:20 AM »
The Amazon card can be hard to get from what I have read, you need a credit score of 640 to get it from a quick google.

I suggest you find at least one account that helps your credit score. This could be a credit card that you pay for something on every month. This could be groceries, or you put one of your bills on it.

We all think being debt free is a great thing and it is. But it takes a amazing about of work to still play with societies rules. We put gas on the credit card and I have to admit I buy way two much crap from Amazon because I do not need to leave my house, drive in traffic, deal with people, and find the said object at 5 different stores in a hide and seek format.

We use credit cards, and invest all of the cash back. We make about a $1,000 a year doing so. We just pay them off every month.

Keep up your credit score...you may need it some day. I view keeping my credit score up as a investment in the future. I may never need it but if it is high if I ever do need it, the money I barrow will be cheaper.

640?  640 is a shit credit rating.  I've never missed paying a bill or credit card balance in my life.  I've had and used a credit card continuously since I was 18, and typically use the credit card to make all my purchases (groceries, gas, most orders in stores).  The last time that I got my credit checked was when I was applying for my mortgage, and it was in the 800s.

I'm trying to understand why my credit score would have dropped so much.  Does paying off your mortgage and not having any loans significantly negatively impact your rating?  That seems weird.

I suggest running your credit score. I bet you will be shocked on how far it has dropped.

Yes not having any loans dramatically impacts your score once they fall off your report.

I do not fully understand the clown math that these FICO people use...and no it does not make since. 

sonofsven

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Re: Lack of established credit references . . .
« Reply #6 on: June 10, 2021, 11:06:31 AM »
Ironically, your prudent use of debt is having a negative effect on your score, especially only having the one credit card I bet.
Since you're using the c card for purchases (and paying it off every cycle) try either not using it for a cycle or pay it off before the end of the cycle instead of waiting for the bill and paying it.
When I was getting ready for a re-fi I did that and it boosted the score. When I was done with the re-fi I cancelled one long held card and it dropped about forty points.
I agree it makes little sense...

yachi

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Re: Lack of established credit references . . .
« Reply #7 on: June 10, 2021, 12:30:30 PM »
Revolving credit is usually (exclusively?) credit card accounts.  I use CreditKarma to check up on what shows up in my credit report.  They say 6 to 10 total accounts is a negative, and 11 to 20 is a positive.  They also say the number of accounts has a low impact on your credit score.  Closed accounts help, but eventually they age off your credit report.  Payment History and Credit Card use have the highest impact.  Late payments affect your credit history.  They like credit card use to be under 30% of the limit (under 10% is better), and usage per card matters too.

GuitarStv

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Re: Lack of established credit references . . .
« Reply #8 on: June 10, 2021, 12:37:11 PM »
Revolving credit is usually (exclusively?) credit card accounts.  I use CreditKarma to check up on what shows up in my credit report.  They say 6 to 10 total accounts is a negative, and 11 to 20 is a positive.  They also say the number of accounts has a low impact on your credit score.  Closed accounts help, but eventually they age off your credit report.  Payment History and Credit Card use have the highest impact.  Late payments affect your credit history.  They like credit card use to be under 30% of the limit (under 10% is better), and usage per card matters too.



What???  I need to keep 11 - 20 credit cards?  And use them all a little bit?

This 30$ Amazon gift card is sounding less and less like it's worth it.

yachi

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Re: Lack of established credit references . . .
« Reply #9 on: June 10, 2021, 01:08:55 PM »
Revolving credit is usually (exclusively?) credit card accounts.  I use CreditKarma to check up on what shows up in my credit report.  They say 6 to 10 total accounts is a negative, and 11 to 20 is a positive.  They also say the number of accounts has a low impact on your credit score.  Closed accounts help, but eventually they age off your credit report.  Payment History and Credit Card use have the highest impact.  Late payments affect your credit history.  They like credit card use to be under 30% of the limit (under 10% is better), and usage per card matters too.



What???  I need to keep 11 - 20 credit cards?  And use them all a little bit?

This 30$ Amazon gift card is sounding less and less like it's worth it.

That's all accounts: student loans, mortgages, credit cards, car loans - they're all counted in the 11-20 (and actually 21+)

mlipps

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Re: Lack of established credit references . . .
« Reply #10 on: June 10, 2021, 03:09:37 PM »
Hang on, GuitarStv is in Canada, the system is similar but I doubt it's identical. For one thing, they give you more than $30 if you sign up for an Amazon card in the US!

Shinplaster

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Re: Lack of established credit references . . .
« Reply #11 on: June 10, 2021, 04:25:26 PM »
I've never heard the term revolving credit referenced in our credit scores.   In this case does it mean that you have a good limit on your credit cards, and consistently stay below it?  Or are they referencing something similar to a line of credit, but not quite the same?

I'm Canadian too, with a credit score of 840.   I have ONE credit card right now, no mortgage for the past 16 years, and never pay interest on anything.   Mr. SP also has one credit card.  His score is 830 (we have no idea why it's lower).   We do have pretty high limits on our cards, but rarely use anywhere near those limits.    What we spend on our cards sounds pretty similar to what you do.   We are much older than you, but our credit scores have been this high for decades, so it can't just be the age thing.

I think most Canadian banks now let you run a credit score for free - it's usually somewhere on their home page or sign-in page.   RBC does, anyway.   Maybe you can run one and see if anything weird shows up.