If you’ve got a less-than-perfect credit score and are stressed out about it, relax.
First of all, you’re in good company. Millions of Americans have lowered credit scores due to instances that just about everyone is guilty of: forgotten payments, late payments, accidental balance overages, and other perfectly understandable mistakes.
Like many people who receive a disappointing credit score, you’ve probably internalized it and see it as a negative reflection of your character. Please. Your integrity as a human being has nothing do with some anonymous bank drone’s opinion of you, and at the end of the day the credit card companies are lucky to have your business.
Nonetheless, improving your credit score is a worthy goal, and you may think that a responsible payment record and timely payments will achieve it. That’s partially true, but unfortunately, the credit card companies analyze what you actually do with your card, and draw conclusions that affect your score. Nice to know that Big Credit Card Brother is judging you 24/7, isn’t it?
Credit card analysis of your transaction patterns even has a name: behavioral scoring. If, for example, you use your credit card at an establishment whose patrons have a poor record of debt repayment, you may be lumped in with their credit profile, regardless of your own. Similarly, Big Credit Card Brother is watching what you purchase, and if what you purchase is deemed to be indicative of a credit risk, then you may wake up one day to find that your credit limit has been reduced or even canceled.
As intrusive and arguably offensive as behavioral scoring may sound, let’s face it, credit card companies are going to do what they need to do to protect themselves, and they’re the ones who get to set the terms. So, if you’re trying to improve your credit score through slow, steady, and quantifiable responsibility, bear in mind that that’s definitely critical to your goal, but it’s not the whole battle. Awareness of behavioral scoring is definitely needed as well.