Tuesday, December 11, 2007

Credit score: How to bite it in one stroke

My credit score was rising steadily. It inched into the 700s and was looking good. Then I got a call. I had not paid a credit card for over 90 days. It was a card that I thought was paid off and for which I did not receive paper bills. Apparently I had signed up for online bills only but I forgot that and did not even know I had registered that account. It did not show up when I went to that bank site and logged on.

The reason it did not show up is that it is a business account and my other account was personal and the two automatically are on different pages. But I did not know that.

The upshot is that I was not paying this card, which had a low balance, because I didn't know I owed anything. As soon as I learned that I was behind I got caught up. Nothing overdue. But the damage was done. My credit score plunged about 300 points!

There was one other contributor: my high debt level. But that wasn't particularly new. The overdue bill was the biggie. So now my credit grade is "HR" - high risk!

Here's what's irritating about that: If you look at my credit history you will see nothing but green for miles. Bills paid on time, usually ahead, and more than the minimum, for many many months. Then this one bill is overdue. One out of fifteen cards. Anyone looking at that might ask me what happened and I have a reasonable explanation. But what happens is that the lenders look only at the score and they have no idea why it is so low. They think I must be a high risk. But I am not.

It's a dirty business, to be sure. Ugly. Fortunately, I don't need any more credit right now.

Getting into Prosper

I am in a Prosper "webinar" right now. These seminars are conducted through gotomeeting.com, and I just discovered that you have to call in to get the audio. I hate that so I'm not calling, just watching the stuff I can see. And what I see is basic. These seminars appear to be for beginners. Yes, I am a beginner, but I have figured most of this out already. It is helpful, though, to see the choices available to me on Prosper, as a lender. It's also possible to ask questions using a separate chat-type box, so I did that. Then I answered my own question.