Beware JD Credit

SnowRidge · Jul 13, 2003

( Your credit score is affected by the amount of inquiries whether credit is granted or not. )

Folks, this is absolutely true.

Some years back, I bought a place in Florida. Shortly after I moved in, I was swamped with credit card offers in the mail. It so happened I was less than enthused about one of my then current credit card companies business practices, so I accepted one of the offers that had come in the mail, just so that I could carry a different card.

To my utter astonishment, it was denied because of "too many inquiries." Now, I have what a loan officer called a 'gold plated credit rating,' so I was stunned to be turned down. I pulled my credit report and it contained dozens of inquiries, many from credit card companies. Obviously, the bank that made my loan, or the nefarious jackals they sold the loan to had sold my personal information to somebody supplying leads to prospects for the credit card industry, among others.

MDog is rightly concerned about JD Credit's open ended demand to use his personal information as they see fit.

SnowRidge

Dahammer · Jul 16, 2003

I pulled my credit report and it contained dozens of inquiries, many from credit card companies. Obviously, the bank that made my loan, or the nefarious jackals they sold the loan to had sold my personal information to somebody supplying leads to prospects for the credit card industry, among others. 

Interesting, but it had no effect at all on your credit score. The only inquiries that will negatively impact your score are ones that you personally applied for. Do you understand what that means? This is how it works: Citibank sweeps your credit report at least every 90 days (all revolving creditors do this) "Oh, I see Mr. SnowRidge as gotten himself a new John Deere Tractor" They know this because it is on your report that they just pulled. Right away Citibank knows two things: One, that you are a man of impeccable taste when it comes to tractors and two, that the $435.00 dollar per month payment raises your debt to income ratio. What do they do? They send you a letter stating that your APR is going to change starting Sept. 1 2003 from its current 9.9% to 22.9%.

This also works in the reverse. Remember from my previous post that anyone can get your credit report as long as they One, have the 20 bucks to pay for it and Two, have a bonfide reason to look at it. Well MBNA just lost 48 million dollars and is on the prowl for some A number 1 customers to extend credit to. Looking for the creme de la cream FICOs of 780 and higher. Well guess what? They start doing credit inquiries, those with the high scores get an invitation in the mail, those with low scored get nadda, zip. Both however, now have an inquiry on their report. This inquiry is the one that will NEVER have a negative impact on your score. Why? because it was generated by a creditor, not you.

I get copies of my report about every ninety days. At any given time there are at least 20 or 30 inquiries. I will tell you my credit scores are in the top 5% in the country (according to Fair Issac and Company). Your credit report will separate those that were generated by you and those from creditors seeking your score to extend you credit. How can a bank *sell* your personal information to anyone? Who in their right mind would pay for it? It is already there for the asking. A credit card company doesn't pay your bank so that it can peek at your address and see where you work and what you do for a living...everbody already know that. You told the world when you FILLED OUT THE CREDIT APPLICATION...that information was entered into three different credit reporting databases.

There are no secrets anymore. It makes no difference whether you like it or not. So Madog can either A: learn the rules and play the game, maybe even to his advantage, depending on what his goals are /forums/images/graemlins/wink.gif or B: take his ball and go home. He decided to take his ball and go home, but did stop at ACE hardware for a really big shovel and really big rake and a really big wheelbarrow /forums/images/graemlins/grin.gif

SteveM · Jul 16, 2003

I am a bank marketing exec, and do a lot of promotional lending. First, big pete is right - this language in the JD contract is a result of the privacy laws, wherein you need to disclose the possiblity - whether realized or potential - of sharing customer information for any purpose other than govt reporting. Here at my bank, we chose NOT to share - so there is no opt out. I dont think it is good biz to give someone a loan, and then sell that file of information for profit. Frankly - I want to keep that customer's business, not allow some other lending company to take it away. But JD finance is an important money maker for the ailing company, and they do sell to list companies. I recently paid off my JD loan, and I have gotten several credit offers from JD to buy a new tractor, trade up etc. I guess they figure I paid off the one I have, why not rack up some more debt! /forums/images/graemlins/blush.gif

I think the only way to avoi this situation is to finance your tractor through a local bank or credit union, albeit at higher rates. You get what you pay for....

SnowRidge · Jul 16, 2003

( Interesting, but it had no effect at all on your credit score. The only inquiries that will negatively impact your score are ones that you personally applied for. Do you understand what that means? )

Not to quibble, but you are missing the point of my post. MDog stated that a lot of credit inquiries can result in a lowering of an individual's credit score. In other words, being denied by a potential lender when that lender applies their own internal scoring system to the application, even though the applicant may have an excellent credit rating (FICO score).

I was agreeing with him and using my own experience as an example of that very thing happening.

Restated, it boils down to this: Excessive credit inquiries may not effect an individual's credit rating, but they can affect an individual's ability to obtain credit.

SnowRidge

Bob_In_MN · Jul 16, 2003

Dahammer,

"There are no secrets anymore".

You could not be more correct. Just yesterday I was out at a company giving them a pitch for my services. This particular company compiles a giant database of info on everyone and certain companies (credit grantors) can get this info when making decisions on providing products and services to you.

You would not believe the sources this company has for info. There are companies out there who do nothing but compile data on people. They even go as far as buying phone numbers from pizza delivery places as they have unlisted phone numbers that are not shown in typical directories. I was amazed at what this company could get.

Now--they are very highly regulated and the info cannot not be obtained by the average business (again--unless they are a credit grantor). But--you'd be surprised as to who is considered a credit grantor. Some examples are hospitals, clinics and labs. They are considered credit grantors because most of the time they are providing services prior to seeing any payment.

Your info's out there--whether you signed off on it or not.

Bob

Dahammer · Jul 16, 2003

Not to quibble, but you are missing the point of my post Well, I have done that before /forums/images/graemlins/grin.gif Let me try this again.

 MDog stated that a lot of credit inquiries can result in a lowering of an individual's credit score. 
Absolutely

 In other words, being denied by a potential lender when that lender applies their own internal scoring system to the application, even though the applicant may have an excellent credit rating (FICO score). 

Ok, now I am confused. You do understand that all lenders apply their own internal weight to the scores that are on your report? It works like this: Lender A pulls your report, it shows great credit but you do have a 60 day late on a student loan. Your FICO score that Fair Issac calculated on your report is 680 and it is noted on your report. Lender B pulls your report also, sees the 60 day late on your student loan and of course sees the FICO of 680. Lender A was going to give you a super rate on a Tractor Loan, but the 60 day late has scared them off. You are denied. (this is just an example with a 680 you would certainly get the loan). Lender B sees the 60 day late and could care less, it gives you the tractor loan, but at a higher APR than Lender A was going to do it for. Your score in each case was the same, 680. But each lender looked at it differently.

In the preceeding example, if you shopped only two lenders your score will not change, it will still be at 680. If you shopped 5 lenders your score will have dropped. It makes no difference it you got the credit you were looking for or not.

 Restated, it boils down to this: Excessive credit inquiries may not effect an individual's credit rating, but they can affect an individual's ability to obtain credit. 

Well, again not exactly. You kinda contradict yourself here. If because of excessive credit inquiries a creditor denies me credit, then those inquiries DID have an effect on my credit rating. It lowered it enough so that I couldn't get credit. Otherwise I would have recieved the credit I was requesting! /forums/images/graemlins/shocked.gif

If you come to me for a loan, and say to you "Well Mr. Snowridge, I would have given you the loan, but I'm not because of all the credit inquiries you have" Under those circumstances the inquiries did have a negative impact on your credit score.

I think if you restate it more like this: Too many inquiries can effect your credit score IF THEY ARE GENERATED BY YOURSELF and it makes no difference if you actually received the credit or if it was denied by the creditor. Any and ALL other inquiries from creditors looking to "sell me something" (John Deere, GMAC, Capital One, MBNA, Kubota, Honda America etc,.) have no impact whatsoever on my ability to obtain credit .

Remember that credit companies did not create the credit scoring system. They ALL use it but they do not 'assign" you a score like years ago. "Oh, he owns his house, lets give him 10 points." "Oh, look ! he has a paid off car loan, lets give him another 12 points". FICO scores are owned by Fair Issac and Company. How they score is rather involved BUT it can be VERY accurate predicting if you will repay on time or not. That is why every lender now uses it, and I mean EVERY lender.

Next time you see an advertizement on TV for zero percent financing on a new car, read the fine print or rather (since it will go by too fast) look for this number somewhere: 720. That is the magic FICO score number that allows you to get the super low rate financing. Not everyone will qualify. They (the dealer) are so sure that they can get you financed with a score that high that if you buy a car on Sunday, they will let you drive it off the lot. When the banks open Monday the dealer KNOWS they will be fighting for your loan.

SnowRidge, I hope I got what you were trying to say and that this whole credit maze is a little more understandable.......It can be and is deliberately confusing......they (and you know who THEY are) don't want us to know ALL the rules of the game. /forums/images/graemlins/confused.gif /forums/images/graemlins/confused.gif

In summary: The only inquiries that have a negative impact on your report are the ones you generated by filling out an application or sending in an "invitation" you got in the mail. All others have no impact whatsoever. Not filling out a John Deere Installment contract has no impact whatsoever on your privacy....However if one finds the 21st century a little too Orwellian, then as a symbolic gesture not signing the contract should be commended. But..... you better have a really big shovel, a really big wheelbarrow, a really big rake and a really strong back..

Whew!!.........I think I need a vacation /forums/images/graemlins/grin.gif

SnowRidge · Jul 16, 2003

( Restated, it boils down to this: Excessive credit inquiries may not effect an individual's credit rating, but they can affect an individual's ability to obtain credit.

Well, again not exactly. You kinda contradict yourself here. If because of excessive credit inquiries a creditor denies me credit, then those inquiries DID have an effect on my credit rating. It lowered it enough so that I couldn't get credit. Otherwise I would have recieved the credit I was requesting!

Large snip...

Too many inquiries can effect your credit score IF THEY ARE GENERATED BY YOURSELF and it makes no difference if you actually received the credit or if it was denied by the creditor. Any and ALL other inquiries from creditors looking to "sell me something" (John Deere, GMAC, Capital One, MBNA, Kubota, Honda America etc,.) have no impact whatsoever on my ability to obtain credit . ) 

You are incorrect. Please read my original post again. I was denied credit because of inquiries generated by companies following sales leads (my info sold to them). I DID NOT generate ANY of those inquiries, and they did NOT effect my Credit Bureau rating (FICO score), but they caused a prospective credit card issuer to turn me down, and that was MDog's point--and he is correct.

SnowRidge

Dahammer · Jul 16, 2003

You are incorrect Wouldn't be the first time, but in this case I think you may have jumped the gun /forums/images/graemlins/blush.gif

 Please read my original post again 
OK, will do.

 I was denied credit because of inquiries generated by companies following sales leads (my info sold to them) 
I assume you received a letter of denial from the credit card company and this is what it said, right? I mean, did it say: "to many inquiries" or did it say: "to many inquiries generated by companies following sales leads" They mean two different things..

 I DID NOT generate ANY of those inquiries, and they did NOT effect my Credit Bureau rating (FICO score) 
Agreed, since they were not generated by you, your credit score (FICO) would not be in any way effected. THAT was one of my points all along.....thank you for concurring.

 but they caused a prospective credit card issuer to turn me down 
Well, I'm going to come on strong now, but bear with me...What you just proposed is flat out IMPOSSIBLE /forums/images/graemlins/blush.gif /forums/images/graemlins/blush.gif /forums/images/graemlins/blush.gif
Wait till the end and I'll tell you why.

 that was MDog's point--and he is correct.

No, the reason MDog is incorrect, and the reason your credit denial had NOTHING to do with those inquiries that you didn't generate is because.......because... Potential Creditors Don't Even See Them !!!!!!! Boy oh boy, those inquiries are For Your Eyes Only...They do NOT show up a credit report pulled by ANYONE except you !!!!!!!!

From EXPERIAN: You may not have initiated the following requests for your credit history, so you may not recognize each source. We offer credit information about you to those
with a permissible cause. We report these credit inquiries only (experians bold type, not mine) to you as a record of activity, and we do not include any (again, experian bold type, not mine) of these requests on credit reports to others... /forums/images/graemlins/grin.gif

*cue the Perry Mason theme here*
*Dahammer removes his glasses, looks sternly at the jury*

"So you see your honor, it would be IMPOSSIBLE for the defendant to be denied credit because of too many inquiries, since the credit card company had NO KNOWLEDGE of any of them...........*pause* THEY WEREN'T ON THE REPORT THE CREDIT CARD COMPANY RECEIVED !"

*Stunned silence in the courtroom*
*Perry Mason theme gets louder....fade to black*

 ************** THE END *************

bigpete · Jul 17, 2003

Just to repeat, I have six words:

 OPT OUT, OPT OUT, OPT OUT! 

July is the month you start to see privacy notices in your statements. As I mentioned earlier, credit grantors must send you a copy of their privacy policy once each year. The law took effect in July 2001, so most credit grantors send you their policy around this time of year (even though they can choose another month if they want to).

Included in the privacy policy (again, by law)is all of the language describing how your personal information is gathered, used, and shared. Also included is a description of what you can do to control how your information is shared and any methods for opting out.

There are really two instructive topics and related laws for this overly-long thread: 1) Privacy of personal information gathered by credit grantors; and 2) Fair credit reporting. Two separate laws apply here, respectively: 1) The Financial Services Modernization Act (also known as the Gramm-Leach-Bliley Act or GLB) and 2) The federal Fair Credit Reporting Act (FCRA).

As has been eloquently illuminated and dramatically discussed, these issues are what they are, your rights are what they are, and your role in controlling what can be controlled is yours alone. The old addage of "light the candle, curse the glare" applies here because we all need the "credit grantor" institutions that are regulated by these laws. Know your rights, do your part, and sleep well knowing you've used the system for its purposes and done all you can to affect the negative component.

This is the free enterprise system at work. All these "businesses" are doing is simply acting in a way to market their products effectively, minimize risk, and provide profits to shareholders. I kinda' like an open, competitive economy and democracy over the alternatives.

Here's the link again: Privacy Rights Clearinghouse

Go...become smarter than they are! /forums/images/graemlins/wink.gif

SnowRidge · Jul 17, 2003

( I assume you received a letter of denial from the credit card company and this is what it said, right? I mean, did it say: "to many inquiries" )

It said, "Too many inquiries."

By your theories, that would have been a single inquiry since I only applied to a single mortgage lender, and had not applied for new or expanded credit in any other form for several years prior.

The only way it could have been "too many inquiries" was for the prospective credit card issuer to have had access to the raw credit bureau data and considered all inquiries--or--you and/or the credit bureaus are engaging in a game of semantics.

Semantics it is.

When the credit bureaus say that don't report promotional inquiries, they are not refering to specific inquiries about an individual. Instead, they are really talking about supplying the name, address, and other data of individuals who meet a certain set of criteria. No credit report is supplied or asked for.

The credit bureaus probably term these scans of their databases as promotional inquiries because they find it a more palatable term to hand out than the truth. In other words, they would rather not admit they sell people's names.

What I am talking about, on the other hand, is specific requests for my credit information by firms given my name by the mortage issuer. That is a completely different thing.

All of these inquiries are listed in the inquiry section of an individual's credit report, whether or not they impact the FICO score--and most definately whether or not the individual initiated the inquiries. The only criteria seems to be that someone asked for an individuals report by name.

From the TransUnion Credit Bureau:

Inquiries

A credit report's inquiries section includes a listing of all parties who have requested a copy of your credit report. Your rights to privacy are protected by the Fair Credit Reporting Act (FCRA), and therefore only inquiries from those entities with a permissible purpose are granted access to your report.

Inquiries that do not appear on the business version of your credit report are promotional inquiries or account management inquiries. Both promotional and account management inquiries are not counted as official inquiries.

Promotional Inquiries

Vendors query our database based on a set of parameters and receive mailing address information for individuals matching their criteria. These vendors are not viewing your report. They just want to give people who meet their parameters a firm offer of credit or insurance.

Account Management Inquiries

Credit grantors who have permission to review the credit reports of their accountholders may do so on a periodic basis. These are not counted as official inquiries.

I stand by what I said. I was denied credit by a prospective lender because a number businesses inquired about my credit, and they got my name from the mortgage issuer.

SnowRidge