Avoid credit reductions and increase your credit score by being a "freeloader"
When Kevin asked me to write a guest post, I wanted to write about things you can do to counteract the new credit card industry practice focused on higher interest rates and lowering credit card limits.
One thing you can do is to become a "freeloader". This is credit card companies call someone who uses their cards but never carries a balance. Now, some folks are out there saying that this behavior can hurt your credit score. Non-sense. I have not carried a balance in as long as I can remember and my score has been above 760 for over 4 years and probably longer. The statement “paying off the entire balance in full each month, the credit bureaus don’t see you as really borrowing any money at all” is flawed. Paying off balances before they are due DOES show something about your credit behavior and IS a good prediction of risk.
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Greetings! I’m Kevin D. Johnson, a small business owner who has recently assumed the role of consumer advocate and internet activist. Atlanta, Georgia is my home.
Upon returning from my wonderful honeymoon in Jamaica last October, I received what I thought was an ordinary American Express bill, but to my surprise it was a disappointing letter informing me that my credit line was reduced by about 65% for a highly suspicious and discriminatory reason. Considering my excellent credit score and pristine payment history, it just didn’t make sense. However, what does make sense are the unfair and insidious policies that I have uncovered when asking why. It is time to change them.
I created this web site to document and share my challenging journey to change what is wrong, unfair, and unjust in the credit card industry. The ultimate goal of this web site is to inform consumers of ways to stand up for themselves against treacherous business practices and to educate consumers about how to improve their credit. Finally, I hope to encourage a more open dialogue with credit card companies about their policies–good and bad.
