What You Buy and Where You Buy Affects Your Credit?

According to this story, credit card companies are starting to use purchasing data to “weed out who may or may not be good credit risks.”

From the story –

Have you used your credit card at merchants specializing in secondhand clothing, retread tires, bail bond services, massages, casino gambling or betting? Your credit card issuer may be taking note -- and making decisions about your creditworthiness based on your purchasing behavior. The reason: Buying used clothing or retread tires may be an indication of financial distress and a preamble to missed credit card payments or defaults.

Now, Congress and federal regulators will be probing the extent to which credit card issuers have used information about where a person shops or what they buy as reasons to lower credit limits or increase interest rates. When credit limits are lowered, it can adversely affect utilization ratios, a measure of how much of cardholders' credit limits are used. Lowering the credit limit increases the utilization ratio and can lead to a lower credit score.

Call me crazy, but the only thing that should determine ones credit score or their “creditworthiness” is whether or not you pay your bill and not what you buy. That’s just a bit too draconian for my taste.