Is this true?
Date: Wed, 06/06/2007 - 19:04
dalfire - if this is a prepaid Mastercard debit card, that's not
dalfire - if this is a prepaid Mastercard debit card, that's not something I've heard of, and I have used one for a few years. The prepaid debit cards you can purchase in a store do not build credit, regardless of how they are run when you make a purchase.
However...
Greendot Financial, one of the companies that issues prepaid debit cards (for sale at Walgreens & Rite Aid pharmacies) does have one card they are test-marketing right now that does build credit - it has a very small credit limit, and does report to the credit bureaus.
oops logged out - no this is just a regular get one with your ch
oops logged out - no this is just a regular get one with your checking account debit mastercard - not pre-paid or anything
Ohh, ok - sorry I misunderstood. I truly don't know if that
Ohh, ok - sorry I misunderstood.
I truly don't know if that can happen, then - it doesn't seem possible to me that a debit only card (such as a checking account debit card) would be able to be reported to your credit report merely by running it as credit as opposed to debit - if it's not truly a credit card - only a debit card - then how could they report to a credit bureau? There's no "credit" account set up on the card - it's only attached to a checking account.
Doesn't seem like that could be correct, to me.
I am positive that your friend is incorrect. Your credit report
I am positive that your friend is incorrect. Your credit report reflects your lines of credit, your debts, your inquiries...a card with a visa/mc logo is not the same as a line of credit. At most, I'm thinking your bank would run a credit check prior to issuing your account/card.
Debit v Credit, is like two different directions that get you to the same place. Credit transactions should offer you some protection under FCBA, debit transactions are secured by your pin.
Morningstar is correct. The Debit/Credit option just determines
Morningstar is correct. The Debit/Credit option just determines how your bank routes/handles the transaction. My bank (TCF) actually charges a POS fee if I use it as debit, so I use credit all the time. I think, too, that if you use "credit" then the merchant is charged for the transaction - which is why they always try to get you to use it as debit.
Regardless, banks don't report to the bureaus. So using the credit option on a checking/savings account card will not help on your credit report.
If your son wants to build some credit, his best bet is to apply for a credit card with a small initial limit. Tell him make a few small purchases every month, and then pay the balance off every time they send a statement. The payments and account history will be reported to the bureaus every month. If he can't get a card on his own yet, you might consider co-signing on one with him.
Quote:I think, too, that if you use "credit" then the merchant i
Quote:
I think, too, that if you use "credit" then the merchant is charged for the transaction - which is why they always try to get you to use it as debit. |
That is correct. It is a percentage of the total. It is why I had to go to the bank and withdraw cash to pay for an auto repair > $2k...but for for my trouble, they gave back to me half of the mc transaction fee. A year or two ago, watching Law & Order, some witness remembered a customer by the credit card it was paid with; said something about damn platinum cards...take 4 (maybe it was 5) percent of the sale.
Maybe the confusion comes from retail CCs. I think it's a requisite for a card, but it's been so many years since I worked in a department store.
thanks Debtcruncher and Morningstar for the clarifications - I w
thanks Debtcruncher and Morningstar for the clarifications - I was certain that improving your credit by running a debit card as credit was impossible. Just didn't sound right at all to me.
Also someone once told me, not sure if this is true either but i
Also someone once told me, not sure if this is true either but if u get a credit card and want to build credit, make SURE u pay if off by end of the month. You can even go to a store and purchase a big ticket item then in a couple weeks bring it back and get a credit and supposedly it will show up as payment on ur card.... Not sure this is true either though! My luck i wouldnt' wanna bring it back! lol And i'm at a point in my life that if i can't afford to pay for it with cash i dont' need it! Of course, my house is almost paid for and all vehicles paid for...
Ang
The best thing to do is to get a secured credit card from your b
The best thing to do is to get a secured credit card from your bank. They hold your funds and after a while if you have paid on time all the time they will release the funds and give you credit. Secured cards are reported just like unsecured cards.
that is what I thought too - just wanted to be sure there wasn't
that is what I thought too - just wanted to be sure there wasn't some super secret info that I missed on that. He is looking at a card with only a $300 balance, and he said he he is just going to purchase his train ticket on it each month instead of paying cash, then he will automatically already have the cash to pay it off. Thanks to all for your thoughts!!
Ang- purchasing an item, and later returning it, just might work
Ang- purchasing an item, and later returning it, just might work. The credit you receive for returning an item doesn't count as payment, but it will still show activity on the card. I wonder if too many people did that, and that's why they started charging a 15% restocking fee ...
The best way I have seen to report usage of a credit card is to
The best way I have seen to report usage of a credit card is to pay your normal expenses with it & pay the bill in full each month.Since I work out in the of nowhere away from my home on my drilling rig,I place my weekly gas & groceries on one of my cards.This takes discipline to do because you must pay in full every month to avoid their interest charges.
But if you don't do that and pay more than the minimum due, won'
But if you don't do that and pay more than the minimum due, won't that also help your credit improve?
You can keep a balance if you want.I prefer not to because I alm
You can keep a balance if you want.I prefer not to because I almost got myself in trouble in the past.Fico scores utilization per account and according to them you would want to keep balance less than 30% of credit line per card.If your card does not report a credit limit,it is damaging your Fico and you should dump them quickly.If I remember correctly Fico scores util at 30% of total score so maxing out a card will bury your score.Payment history is another 30% so a late payment will also bury you.
Quote:FICO Scores are calculated from a lot of different credit
Quote:
FICO Scores are calculated from a lot of different credit data in your credit report. This data can be grouped into five categories as outlined below. The percentages in the chart reflect how important each of the categories is in determining your score. Payment history: 35%, Amounts owed: 30%, Length of credit history: 15%, New credit: 10%, Types of credit used: 10% These percentages are based on the importance of the five categories for the general population. For particular groups - for example, people who have not been using credit long - the importance of these categories may be somewhat different. Payment History * Account payment information on specific types of accounts (credit cards, retail accounts, installment loans, finance company accounts, mortgage, etc.) * Presence of adverse public records (bankruptcy, judgements, suits, liens, wage attachments, etc.), collection items, and/or delinquency (past due items) * Severity of delinquency (how long past due) * Amount past due on delinquent accounts or collection items * Time since (recency of) past due items (delinquency), adverse public records (if any), or collection items (if any) * Number of past due items on file * Number of accounts paid as agreed Amounts Owed * Amount owing on accounts * Amount owing on specific types of accounts * Lack of a specific type of balance, in some cases * Number of accounts with balances * Proportion of credit lines used (proportion of balances to total credit limits on certain types of revolving accounts) * Proportion of installment loan amounts still owing (proportion of balance to original loan amount on certain types of installment loans) Length of Credit History * Time since accounts opened * Time since accounts opened, by specific type of account * Time since account activity New Credit * Number of recently opened accounts, and proportion of accounts that are recently opened, by type of account * Number of recent credit inquiries * Time since recent account opening(s), by type of account * Time since credit inquiry(s) * Re-establishment of positive credit history following past payment problems Types of Credit Used * Number of (presence, prevalence, and recent information on) various types of accounts (credit cards, retail accounts, installment loans, mortgage, consumer finance accounts, etc.) Please note that: * A score takes into consideration all these categories of information, not just one or two. No one piece of information or factor alone will determine your score. * The importance of any factor depends on the overall information in your credit report. For some people, a given factor may be more important than for someone else with a different credit history. In addition, as the information in your credit report changes, so does the importance of any factor in determining your score. Thus, it's impossible to say exactly how important any single factor is in determining your score - even the levels of importance shown here are for the general population, and will be different for different credit profiles. What's important is the mix of information, which varies from person to person, and for any one person over time. * Your FICO score only looks at information in your credit report. However, lenders look at many things when making a credit decision including your income, how long you have worked at your present job and the kind of credit you are requesting. * Your score considers both positive and negative information in your credit report. Late payments will lower your score, but establishing or re-establishing a good track record of making payments on time will raise your score. |
Courtesy of myfico.com
Since we were discussing scores I copied the score model info from the Fico website.
I believe that if you kee a small amount of revolving credit, ei
I believe that if you kee a small amount of revolving credit, either charge small charges frequently or let a little roll to the next month that i will up your credit.
That is how I got my credit going. I moved otu when I was 18 and needed something. I got a Montgomery Wards card and bought a printer which I paid off in 3 or 4 months. Then I had offers flying in the mail.