This is part of a column authored by Matt Towery. I had heard of this before. It is instructive of the intrusiveness of not just government, but even private industry into our lives that affects us in so many ways.

Freedom from "Big Brother" intrusion by government -- and much else -- has always been the basic operational tenet of the philosophical political and social ideal that stems from the impulse to be left alone to live one's life as one sees fit, as long as no one else is harmed.

But today's world offers many contradictory instances in which technological advances in information and other industries and services too often compromise the most passionate laissez-faire philosophical views.

For a moment, rather than beat up on the potential intrusions by government, a topic which often unites fierce liberals and passionate right-wingers, let's instead look at instances when private institutions decide to hold court over all of us, as individuals or as a nation.

These lofty actors range from the credit lords who rate your individual worth as that of your credit worthiness, to the august The New York Times, and many others. There are plenty of private institutions that consider themselves the arbiters and enforcers of their own self-styled system of justice.

I'll start with a simple fact that most people don't know. Consider those of us who have looked in the mirror and seen someone who is taking on too much debt, has the means to pay it off, and therefore decides to eliminate the opportunity to fall into such debt again.

Sounds like good personal fiscal responsibility, right? Think again. According to leading consumer experts like bestselling author Clark Howard, it's fine to pay a credit card off. But if you close the account, the "Big Three" companies that score your credit will count that against you and lower your credit score!

If that shocks you, you're in big company. Surveys show that most Americans are unaware of this. So let's comprehend the unbelievable by repeating it: These private companies have decided that if you choose to eliminate one of your credit cards, then you've done a bad thing.

That makes plenty of sense -- if you're an issuer of credit. Obviously it's in the best interest of the huge credit-card companies and their affiliates to "encourage" you to hold on to that tempting apple of easy credit. They know you're more liable to do so if you know you'll be punished for tossing it out.

Moreover, the credit company's condemnation has wide ramifications. Credit scores are used to decide everything from whether an insurance company will insure you and at what premium levels, to -- potentially -- the government's evaluation of you as a threat to national security.

Since I'm Catholic, I can get away with that old saying, "Who died and left them pope?"

PB
This is true, too. As an example while my husband and I have been diligently been paying bills on time, paid off bills we didn't even know we had until we went to buy our home and then paid whoever off immediately etc. etc...
Well we decided to get a loan. Not so much that we needed it but to help establish a better credit score by paying it off with just a few bucks over the limit so that it went to the principal and not the interest. (A little in this case was anywhere from 800.00-1,000 extra each month..it was a substantial loan..well, 5,000.00 that we guiltily used for our first and only family vacation to the Bahamas last year. Now we could have paid it off recently in full, but was advised and KNEW that that was not the way to go. In order to establish "good" credit you need to pay the monthly premiums and okay it doesn't hurt to pay extra. In our case, we paid alot extra. so while our credit score has gone up significantly (doing other "responsible" things, too) It will not behoove us to pay this loan off completely, even though we can. I mean we are months ahead. Even being months ahead, though, if we were to hit a "tight spot" and miss the actual monthly premium all would be for not, as that, too would affect the rating in the red. Strange, but true.
I do think most folks do know this, but it's like a catch 22. You want to have good credit history, yet don't really like the dang thing hanging over your head. (I hate owing!!) So now we just play that game and keep paying the monthly and a little extra..no longer as much as a few months ago, due to financial changes since then.
but, yeah, alot of people don't realize this and it's a good thing to point out. In my "younger" days---1776? I would have just paid the darn thing off and felt good about it, but then say I wanted to purchase a car on loan and if they see how fast we paid off the other loan they would snub their noses at us. It just seems a bit backwards to me.
Nice article though to bring it up
B2

Interesting PB.
Our CPA recommended that we have no more than five(four being ideal) credit cards and to keep our balance at 40%- instead of paying them off in full monthly. She said it shows activity, which is better than having a card with no activity. Payment history plays a big factor in your combined score, yada, yada, yada..

Absolutely!!! Almost redundant, but hey that's Big Brother for ya In other words pay your bills on time, buy always owe
B2

B2
A couple years ago, I was considering buying a bmw. The salesman told us that getting a loan from bmw increases your credit score. I thought it was a pitch. I later found out he was telling the truth. I can't recall the specifics now. Just thought that was very interesting.

quote:

Originally posted by 5465:
Absolutely!!! Almost redundant, but hey that's Big Brother for ya In other words pay your bills on time, buy always owe
B2

Thats the American way isn't it.

And the BMW is not only an "elite" (not trying to make you feel uppity or anything..I love BMW's especially the older ones) but just seeing that kind of purchase I will only assume makes some eyes pop out. Maybe not so much these days..but there was a time.
B2
Yeah, Ironic again...the American way...BMW, duh?