Banking question: Credit Scoring

[stepthirteen]

The whole point of a credit card is to show you are trust worthy.

Actually, the whole point of credit cards is to make the credit card companies money. They make money when you carry a balance, and pay ridiculous interest rates on the balance.

I have a fantastic FICO score; I do not have a credit card other than my bank debit card, and my American Express card, which I have to pay off every month.

In terms of your FICO score, it is really is establishing a pattern of living up to your obligations, whether they be paying credit card payments on time (whether in full or not every month), paying your loan payments on time, etc, etc.

Further reading:

http://en.wikipedia.org/wiki/Credit_score_...he_credit_score

http://credit.about.com/od/creditreportsco...score-hurts.htm

Paying off your credit card balance completely each month does not hurt your credit rating.

It does not hurt your score, but it does not help it either. The FICO scoring model factors in balances as a part of the equation and if you never have any balances it does not have any way to factor them as a part of the score. No doubt paying off each month is the most repsonsible, but it is not going to give any lender an idea of your ability to manage payments and establish a history. I have a great score too, but my score is not completely based on balances or lack of, in fact the age of my oldest account is the most heavily factored part of the FICO equation.

I could go on and on with all this credit crap the bottom line is do not get credit for credit sake, but get it because it is required in this day and age at somepoint.

Jim