can some one explain the credit rule for me?

Question

I have always wondered just what it is they use to determine some one credit worthiness today. I am one of those guys who as never been able to get a loan. I applied to one of these offer I got in the mail "bank of America" 10.000 8.99% after a half hour on the phone they offer me 500 dollars I laugh and hang up! Here's what they no, I'm a union employee 15 years, avg. yearly inc. 60.000, more true 8000 net a month cause as a union worker I rarely work more than 7 mo's. one credit card I owe 7.500, no mortgage, no bills, no bankruptcy, no late payments I make 32 dollars hour. My credit score is 720 I own my house I have had several always paid cash never ad a mortgage, never ad a car loan, never had a loan. I always have had credit cards always paid them on time. wife kids utilities phone car insurance only bills I have make plenty of money me and my family are basically dept free we travel every where yet I could not get a loan to save my live some explain this to me?

Answer 1

This is one of the frustrating things about credit.

Scores are made up of the following factors;

1. Payment history 35%
2. Time in bureau 15%
3. Types of credit 10%
4. New credit 10%
5. Debt to credit ratio 30%

But score is not the only thing that is important, you must also have a good credit profile which is the mix of credit types and payment history's that you are lacking.

Never having any installment credit is killing your profile.

Go to your local bank and borrow say $5,000.00 for 12-months and pay it off as agreed, this will give you some installment history which is what you need.Just make sure that they report to the credit bureaus.

Answer 2

You sound like a good credit risk to me.
You'll probably be better off applying locally where they know you, or see if you have a credit union that you can join through work. Try applying at the bank you have your saving and checking with.
Unsecured loans are harder to get than secured loans. What bank of america was thinking, was this guy has no credit but all of a sudden wants 10000 on a card. So they probably want to start small to get you going then increase from there. But I always recommend your local places first because they are more willing to work with you.

Answer 3

Paying cash, means no credit. Your credit score is good, but you have very little history. No history, no offers of credit. If you refuse to take what little you are offered, then you will never get started. You have a great financial situation, but if you want credit, you need to get started now.

This website below has good information on credit. You'll see that 35% of your score has to do with repaying on credit cards. How do you expect credit card companies to think that you can handle credit if you never had a card to pay on?

Start now.

The other site is for beginners on credit cards.

Answer 4

I would say that part of the reason why you are having problems getting credit is because it seems that you actually have very little credit history. It looks like you only have 1 credit card as you whole credit file. By paying cash for everything - home and car, you are not showing enough evidence that you will pay your debts.

Answer 5

First, get your free copy of your credit bureau report to make sure that there isn't a mistake out there.

Second, accept the little $500 line of credit on the card. It looks like you have too little credit history for lenders to be comfortable. Also, if you owe 7500 on one card and that's close to the limit, it can make lenders uncomfortable.

Answer 6

Makes no sense to me. Have you reviewed your credit yourself? There may be something on there that you have no clue about that is holding you back. I deal with people and their credit everyday and I can tell you with a beacon score like that, you should be able to get a loan with no problem AT ALL. Maybe you should try a local bank. One where you can go in and see them face to face while they review your credit. That's what I would do. Good Luck!

Answer 7

I can't explain it, but have you pulled all three of your credit reports and examined them for any errors? Not just the FICO scores but the actual information.

Answer 8

Put up some security and credit will find you.