So, I have this Washington Mutual card that is shortly going to be taken over by Chase since Wamu passed –
(moment of silence) Ahem
– and one of the benefits of this Wamu card was that it updated me monthly on my current FICO credit score. This benefit will also be going away in March when Chase officially takes over and I will stop using the card out of principal and begin paying it off in earnest along with that piece of shit Amazon.com Chase card with the way-high interest rate.
Anyway, I logged into the Wamu account this morning and between December and January my FICO score went from ???-something to friggin’ ???. Not that the ???-something was a great credit score, but let me tell you, that due to some girlfriend issues in my 20’s I have built that credit score out of massive amounts of debt that to this day still haunt me.
So I am thinking to myself what in the hell? I try to recall if I did something – a major purchase? went up to the limit on something? – exactly what I did to cause this massive decline – when in actuality it was nothing I did, rather its something that GE Credit did.
You see, back in mid 2007 I walked into HH Gregg and bought a big-ass, LCD flat-screen and I applied for and received an HH Gregg card which is serviced by GE Credit so I could get zero interest for a year. The tv was about $1800 but the credit limit they assigned me was a whopping $4000. I didn’t ask for that, but they gave it anyway, generous souls.
I paid the tv off by January 2008 and in fact bought two more that month, cheaper models, about $1500 for the two of them. I paid those off too just this past November. You would think this would be a good thing, but -aha!- now I recall that back in November I received a letter from GE Credit which said that they were, for no particular reason, or rather for no reason other than to preserve their own asses, decreasing my credit limit from $4000 to $900.
I have researched since then and found out this is called “chasing the balance” – pretty much decreasing the credit limit as the the balance is paid so they’re not on the hook for some deadbeat in the tanking economy. (Although deadbeat is a strong word, it would be the word they would choose even as they laid off thousands of people who want to pay they’re bills, but honestly, just don’t have the money. But that is another topic.)
Anyway, I really didn’t care or think much of the decrease at the time since I’m pretty much done with major purchases from HH Gregg for the time being, but now I know that FICO cared – a lot! Which really sorta isn’t fair but its happening all over the place. Here’s a very interesting Good Morning America report about American Express doing the same thing to a guy named, Keven Johnson, in Atlanta, and although they don’t say it outright, the racist implications of American Express’ policies in this particular case are a major subtext of the report. Not to mention the fact that they repeat more than once how American Express has taken bail-out tax dollars, money paid by the Kevin Johnson’s of the world, and instead of extending credit, are hording the money. (On a completely unrelated sidenote, since GE Credit is such a large lender and GE owns NBC, it’d be interesting to know if NBC is running such seething, button-pushing reports about consumer credit.)
Watch the report here
A major determinant of the FICO score is how much available credit you have at your disposal. When GE Credit took away nearly 75% of my credit with them, FICO duly noted it and applied it to my score. I doubt it would happen but it would be nice if FICO, even temporarily during these times, reconfigured its algorithm for this portion of the score so that the score would reflect that, in fact, the individual did nothing wrong and that it was the lender that withdrew the credit as a cautionary measure.
But that’s neither here nor there, is it?
And, Britney, well she’s on top of the situation as usual with her new single.