Girl Claims She Can't Buy A House After Getting A Home Depot Credit Card

[White 6]

Opening a new credit account can certainly hit your credit score. By how much? I dunno'.

The story is a bit confusing, though. I get the impression that she was buying some paint, and may have used a Home Depot card to do it. That's how it reads to me, anyway. If that's the case, she would've received a bill. If she neglected to pay that bill, I've no sympathy for her...

Yep. Sounds like she just forgot to pay here credit card bill. If you cannot or do not manage your credit, you do not deserve to have credit.

 

[westwall]

Welllll, I had some big ticket items that I used my airline CC instead of my debit card to get the mileage, and it took 15 points
off of my FICO score. I paid it off the next month and the score went back up. I have and always had excellent credit, I'm in the
800+ range. So it does have impact from the balances.

Yes, I am 820 normally (pisses my wife off ) and have, quite literally, never missed a payment. I find it annoying that if I make a purchase my rating goes down for even a minute!

 

[woodwork201]

So, you should be punished for something that might happen.

And you are good with this? Really?

You're not punished at all. Your credit score represents a mathematical risk assessment of your history, your behaviors, your standing. Lenders choose to pay the risk experts for their opinion on how much risk it is to extend credit to you. If you're higher risk, the credit costs more.

If you take the return required on money to be profitable, let's just say, as a hypothetical example, that they have to make 100,000 on 1000000 dollars loaned. One group of borrowers have an average score of 750 and another group of borrowers have an average score of 650. Considering that, hypothetically, 10 per cent of the 750 borrowers will default, they have to pay an average interest rate of 6%. If 40% of the 650 borrowers will default (that's probably a low estimate of defaulters; you have to be pretty much a deadbeat to have a 650 credit score) then they might have a 24% interest rate.

Using your credit definitely increases risk. The more you use your credit, your debt load goes up exponentially since you have to pay more interest. High debt load has been a proven factor in spiraling out of control and leading to default or bankruptcy.

 

[woodwork201]

We had to get one a year ago at a car dealership even though we pay cash for our cars.

Really? Did you say no credit check; I'm walking? I've had to walk a few times to get what I want from a car dealer. I had one that refused to drop their stupid, rip-off, paperwork fee, another that wouldn't close the deal until I heard the extended warranty crap. On the first one, I was half- way across town to the other dealer before the sales manager called me back. On the latter, I didn't make it out the door but I was well on the way in that direction, before they understood that I meant what I said.

 

[B. Kidd]

You can't buy a new house in Vegas right now for under 400k!
A Home Depot credit card may qualify you for a cardboard box in a wash, with the latest appliances!!

 

[Harpy Eagle]

You're not punished at all. Your credit score represents a mathematical risk assessment of your history, your behaviors, your standing. Lenders choose to pay the risk experts for their opinion on how much risk it is to extend credit to you. If you're higher risk, the credit costs more.

If you take the return required on money to be profitable, let's just say, as a hypothetical example, that they have to make 100,000 on 1000000 dollars loaned. One group of borrowers have an average score of 750 and another group of borrowers have an average score of 650. Considering that, hypothetically, 10 per cent of the 750 borrowers will default, they have to pay an average interest rate of 6%. If 40% of the 650 borrowers will default (that's probably a low estimate of defaulters; you have to be pretty much a deadbeat to have a 650 credit score) then they might have a 24% interest rate.

Using your credit definitely increases risk. The more you use your credit, your debt load goes up exponentially since you have to pay more interest. High debt load has been a proven factor in spiraling out of control and leading to default or bankruptcy.

As I pointed out in a different post, I disagree, I think it is being punished.

My credit load changed by less than 1% and my score went down by more than 3 times that amount, meaning if I had needed to use more credit I would have been charged a higher interest rate.

All this by companies that are beyond our reach, that we have no real recourse against and who know more about us than the government.

 

[woodwork201]

Yep. Sounds like she just forgot to pay here credit card bill. If you cannot or do not manage your credit, you do not deserve to have credit.

I had a close call on a credit card several years ago. I have all my bills on auto-pay so I don't worry too much as long as I don't get an email about a late payment or something. I had a store card that I went to use one time and it was rejected. I said, "What the hell?" The clerk was pretty snobby because she probably hears fake surprise a lot. I made her get the company on the phone. It turns out that the company's auto payments only last for 6 months at a time. Though I hadn't used the card in over a year, I thought the last time I used it had been paid and they never once contacted me.

I got the lady on the credit end to review my history with them and my overall credit. Never once had I ever been late on a payment. I was surprised but glad, she actually took the credit hit off my credit record, restored the account, and I paid the late part but used the card to pay for what I was buying that day. Now, even with autopay, I check to make sure my cards are always paid on time. If I don't get the confirmation email before the due date I would log in but it's never happened since, on that or any card.

Point is, things do go wrong. I'm sorry for the lady in the story; learning to manage your credit is sometimes hard and painful. She should work with an attorney or, if there is such a thing, a credible credit repair company, to get the blackmark off of her record. Or she waits 7 years, pays all of her bills on time, and comes out of it with a higher credit score than she would have had otherwise.

 

[woodwork201]

I do view it as being punished.

My wife had a CC in her name alone that she got when she started working full time to help build up her credit score. It was the only thing in only one name and early this year she got an upgrade offer that was pretty awesome and while doing the online process she also added me to the card so I could legally use it. The card has a limit of more than 8 grand and less than 1 grand on it when she did it. My score dropped 35 points due to this. Had I needed to use my credit till it went back up I would have been charged a higher interest rate for no reason at all.

Do you assume credit is a right? Access to use other people's money a right? Do you also have a right to borrow my chain saw and if I don't trust you and ask you to leave a deposit to reduce my risk, am I punishing you?

 

[Harpy Eagle]

Do you assume credit is a right? Access to use other people's money a right? Do you also have a right to borrow my chain saw and if I don't trust you and ask you to leave a deposit to reduce my risk, am I punishing you?

I assume that private companies should not have as much power over our lives as they do.

you are cool with it, I am not.

not sure what more there is

 

[woodwork201]

Also, if an insurance company did that I have the power to find a new insurance company. Credit rating companies are beyond that, there is no choice, we have no say in waht they do or how they do it. People whine about how much information FB or Google has about us, but they never care about the power and the amount of information a credit rating service has.

Insurance companies try to compete to get you the lowest rate possible. That means managing their risk very closely. If you go to a company that doesn't check your credit, you'll probably pay more. Of course, alternatively but on the same topic as using your credit score to reduce your rates, you can let them put an OBD-II tracker in your car and you can reduce your rates by obstructing traffic and causing accidents all around you that don't actually touch you.

 

[JOSweetHeart]

There are several potential reasons why her score went down.

If a person has a lot of accounts open and then open another one, that will decrease a credit score.

If a person has balances on a lot of credit cards, that will cause the score to decrease.

Yet if you had read farther down the article, she used the card to buy some paint and forgot to pay the bill.

When a person is delinquent on a credit bill their score goes down.

When you state "if the card has not been used" that tells me you only read the title of the article but not the whole article.

The article clearly states she used the card. It also clearly states she forgot about the card.

Please, read the whole article before you post it.

Home Depot and their card didn't cause her credit score to decrease thus deny her the ability to buy a house.

She did.

Thank you for writing back and that goes everyone else here who has too.

For the record, the entire story was read before it was shared. If one nine dollar purchase is the only thing that went on the card that changed everything for her, that right there is what makes the whole thing as awful as it is because it was just that little bit of money and not as if she did nothing but run up her credit card bill completely.

God bless all of you here and the girl always!!!

Holly

P.S. What I have learned from her experience as well as so many other peoples' experience is don't have so many cards in the first place and don't use the ones that you do have so often to where you don't have the ability to stay caught up on their bills. I only have one card and this girl's experience only makes me even more convinced that it may be the only one that I will ever need, especially with it being the kind of card that it is.

 

[woodwork201]

I assume that private companies should not have as much power over our lives as they do.

you are cool with it, I am not.

not sure what more there is

No private company has any control over you that you don't give them. If you don't want credit reporting agencies to affect your life, then don't use credit. If you don't want Facebook or Twitter, or other companies that people think have control over their lives, then don't use those either.

It sounds like you want all of the benefits those private companies might bring to your life, such as reduced credit and insurance costs, but not to pay the price to get those benefits. Next time you need a new car, pay cash. Or go to we-tote-the-note-auto-store and pay 33% interest.

 

[Harpy Eagle]

No private company has any control over you that you don't give them. If you don't want credit reporting agencies to affect your life, then don't use credit.

It is not that easy, employers look at credit ratings when hiring, eclectic companies look at them when you apply for power, auto insurance companies set their rates in part on credit ratings. You cannot get away from it.

If you don't want Facebook or Twitter, or other companies that people think have control over their lives, then don't use those either.

People are not using a FB rating when deciding on who to hire

It sounds like you want all of the benefits those private companies might bring to your life, such as reduced credit and insurance costs, but not to pay the price to get those benefits.

No, what I want is some sort of control over those companies.

 

[22lcidw]

The whole thing is one of the biggest scams going. How did we the people ever agree to give so much power to private, for profit, entities over our lives?

An offshoot of the Fiat Currency. Which is negative money. It depends on interest to exist. At least for the peons.

 

[Resnic]

This sounds to me like a case of, there is a whole lot more to the story that we don't know.

 

[Dana7360]

Thank you for writing back and that goes everyone else here who has too.

For the record, the entire story was read before it was shared. If one nine dollar purchase is the only thing that went on the card that changed everything for her, that right there is what makes the whole thing as awful as it is because it was just that little bit of money and not as if she did nothing but run up her credit card bill completely.

God bless all of you here and the girl always!!!

Holly

P.S. What I have learned from her experience as well as so many other peoples' experience is don't have so many cards in the first place and don't use the ones that you do have so often to where you don't have the ability to stay caught up on their bills. I only have one card and this girl's experience only makes me even more convinced that it may be the only one that I will ever need, especially with it being the kind of card that it is.

She didn't pay the bill.

It wasn't the charge.

It was the fact that she didn't pay the bill.

She said she forgot.

If you had read the whole article before you posted it, you wouldn't have said "if the card had never been used once."

If you had read the whole article you would have known it was used and thus logically would never have posted "if the card had never been used once."

The logical part is that she had used it, it was disclosed and it not being used once isn't even part of the situation.

 

[struth]

Go here for the story. Forgive me for my lack of experience, which could very well be a good thing maybe, but what is it about these department store credit cards? If her new card was never once used, what gave it the ability to make her credit score take such a hit?

God bless you and the girl always!!!

Holly

having open credit, even if not used can impact your credit score

 

[ClaireH]

I bought furniture one time on credit when I was 19. Since that time the closet thing I have to a credit card is a debit card. As a past listener of Dave Ramsey, I never bought into the credit card racket, legit or otherwise. Legit means paying it off monthly. If a credit card company lowers your score when you pay it off monthly, as another poster indicated? Forget that deal! Surely most banks aren’t doing that or they wouldn’t have customers, right?

 

[JOSweetHeart]

She didn't pay the bill.

It wasn't the charge.

It was the fact that she didn't pay the bill.

She said she forgot.

If you had read the whole article before you posted it, you wouldn't have said "if the card had never been used once."

If you had read the whole article you would have known it was used and thus logically would never have posted "if the card had never been used once."

The logical part is that she had used it, it was disclosed and it not being used once isn't even part of the situation.

I read the write up and one thing that I don't remember seeing is whether or not proper bills were sent to her in the mail or online like they are supposed to be if the payments are wanted badly enough. If nothing like that was ever once done, she didn't get into this mess alone. She had help and to me, if someone did not do whatever their part was supposed to be, may they be who the girl does her landing on.

God bless you and the girl always!!!

Holly

P.S. I recently paid a doctor bill that did not include a due date. It was for $5.08. A few days after I paid it, another bill came in the mail from the same doctor and it was for $8.08 meaning I had been hit with a three dollar late charge. Over the phone after getting the new bill, I was told that I didn't owe anything more because of my paying the bill already before the new bill containing the three dollar increase even got to me. To me, the moral of that story is that every bill should include a due date if the money is wanted badly enough or is hitting people with a late fee the only intention that certain other people get in other people's way to have?

 

[woodwork201]

I bought furniture one time on credit when I was 19. Since that time the closet thing I have to a credit card is a debit card. As a past listener of Dave Ramsey, I never bought into the credit card racket, legit or otherwise. Legit means paying it off monthly. If a credit card company lowers your score when you pay it off monthly, as another poster indicated? Forget that deal! Surely most banks aren’t doing that or they wouldn’t have customers, right?

You don't understand how it works. Neither the credit card company nor the banks lower your score. The risk algorithms at the credit bureaus lower your score based on input from the credit card companies and banks. None of the above lower your score for paying your debt off each month. That's one of the best practices for increasing your score.

Assuming you pay your debts on time and maintain a reasonable percentage load of your credit limits, less than 40%, you'll have good credit. What gets people in trouble that they might not expect to do so is closing accounts. Cancelling a card reduces available credit, and increases the percentage of used credit. It also, potentially, has the effect of reducing the age of your accounts. Long-held accounts increase your score while new account reduce your score. If you were to cancel a long-held account, even if you get a new account to maintain your credit limits, your score will drop.

There probably are quality-of-lender pieces to the equation. An account at a finance company probably doesn't do the same good for your credit score as a credit card. A credit card probably doesn't do as much good as a bank loan, just considering the relative lending conservativeness of the three. But this is just guessing/assumption on my part.