Buying Green Could be Ruining Your Credit
Photo via CDN
So you make eco-conscious, informed decisions about what you buy: maybe you, say, shop at thrift stores to limit consumption, maybe you get your tires retreaded instead of opting for new ones, and maybe you buy organic produce at Whole Foods. But it turns out, if you're charging any of those purchases to your MasterCard, you could be ruining your credit.It might seem crazy, but some of your greener buying decisions may raise red flags at credit monitoring agencies--because they think you're growing broke.
The Concord Monitor recently ran a piece listing some buying habits that credit companies watch for as signs that you're becoming a less reliable person to lend money to. Many make sense--if someone charges a bail bond to their credit card, for instance, that doesn't bode well as an indicator of your financial stability.
But many of the so-called 'red flags' are more dubious. Credit companies take note, for instance, if you charge services like tire retreading and shoe repair to your card. Or if you're shopping at thrift stores like the Salvation Army. The reasoning being, ostensibly, that you can't afford new tires or new clothes, and therefore won't be able to pay your credit card bill. So they lower your credit rating.
Using your credit card at any grocery store is also evidently a sign of your financial ruin, and is noted by the agencies.
First of all, it's distressing (and has been for a long time) that these agencies have so much access to information about our daily lives, and that they're peering in so closely. But the fact that they're making generalized assumptions about our buying habits that can impact our ability to take out a home loan is especially egregious. And it's actually a pretty definitive referendum on good ol' American consumer culture. It boils down to a simple, deeply-ingrained axiom: if you're not buying new stuff, something's wrong with you. You're less reliable. And your credit could suffer for it.
Even though Obama has signed a bill that will cut into credit companies' ability to watch your every move and make such seemingly arbitrary adjustments to your credit rating, it won't go into full effect until 2011. So at least until then, keep buying green. But pay with cash.