Posted On: August 28, 2008, 9:28 am CDT

Posted By: caveat emptor

It isn't just identity theft. I worked for a credit reporting bureau. Here's a little bit of their "scoring model" to chew on.
Let's say you have 2 credit cards, each with a 10k limit and you have one with 5000 on it because has a low interest rate and the other empty because you don't feel like paying the 30% they're asking for. Take that SAME 5000 in debt and put 2500 on EACH card and your credit score goes up by a MINIMUM of 100 points. Now how does this make any sense? Basically, the credit score rewards you for making a bad fiscal decision (paying more interest) because some random bean counter decided 50% card useage is a bad thing, no matter what. Ummm...here's a tip genius using 50% of ALL your cards is bad...using 50% of ONE card is not an indicator of your credit risk in any way (maybe you only want to make 1 payment, maybe that card has a pretty picture on it, who knows why a consumer prefers to use that card - certainly not the guy making up the credit score). I could give you dozens more examples of the faulty, circular logic built into credit scores but I have to get to work.