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credit score

4K views 33 replies 29 participants last post by  Jc762 
#1 · (Edited)
For the first time ever I checked my credit score. Am I missing something here? My guess is if there is no record of you paying a mortage then they assume you rent. I see nothing about whether you own your home outright.

I have what is only considered a fair credit score. And that is only based on the balance of the one credit card I have & car payment. Utilities I always pay on the first of the month. Credit card & car payment are with the same credit union so I called & ask them about my credit score & was told they don't set the credit score only report balances & monthly payments. Credit union thinks more of me then the credit score companies. Last March when I decided it was time to get another vehicle I called & ask for a check good for up to $8,000 for a used vehicle but they said they would make it for $12,000 to give me more leway in shopping & interest rate would be 2.99%. And that doesn't jive with my credit score.

But I do know that no matter what, I will only deal with the credit union for any type of loan.

Reason I even checked my credit score was the thinking of maybe getting a used RV come about June.
 
#2 ·
Yes it's a game. I refinanced my 30 year mortgage to a 15 year mortgage 3 years ago. I shaved 10+ years off my mortgage, I didn't take any equity, and I have 70K in equity in my house. MY credit score went down, because my new 15 year mortgage was not paid down at all, instead of the 5 years off my 30 year mortgage, I made a better financial decision to pay my house off sooner, still have the same equity in the house, but they don't see that. They assume you take the mortgage for the whole value of the house, and now have no equity.

It's a racket.
 
#3 ·
Racket indeed, to generate a high credit score requires some number (3-4) revolving credits accounts and no late payments. Also keeping the balance of these accounts under %40 used will also assist with this. Gotta spend money so they give you more money.

A good idea with all the fraud these days it to check your credit for free, they won't give you a score with the free credit check but you can see if there are any open accounts that you don't recognize or addresses that don't belong to you.
 
#21 ·
Problem is, the credit score is used for more than credit. Insurance companies often use it when determining your rate. Employers often use it to determine whether to hire you or not. Who knows what else it is used for. I don't know how true it is, but I heard that a high number of inquiries about your credit score will lower it.
 
#5 ·
All a credit score is, is a score on how well you borrow and repay money. If you were a millionaire that had never borrowed money your credit score would be 0. It is essentially a dumbed down method to lend money without having to do a diligent job of looking as someone's assets and liabilities.
 
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#8 ·
TMCFALLS is right.

Another tip - don't close accounts, as it drops your open credit to loan ratio making you look appear to have a higher debt ratio than you are (if I recall correctly). Doesn't make much sense, does it? Google search it.

Do what you can to bring it up. The $hitty part is insurance agencies look at your score and raise your premiums thinking you're more of a risk with a worse score, costing you more money in the long run. Brilliant, right? And of course some employers require a credit report depending upon what position you'll be fulfilling with them.

As for paying off your mortgage, the loan papers should note that you own your property with no mortgage payment and no retn. They should be taking that into account as to your ability to repay a loan, along with the report. But the stupid score drops you into a bucket regardless. Also bitch to the loan manager if they want your money that badly. You can always walk away.
 
#11 ·
The problem with a credit union (mine is wings) IF and only if you want to call it a problem, is that every member (Union remember) is the same....So, mortgage rates are especially awful through a credit union

Yes, the credit union auto loan is 3%, BUT they will never give you 0% if you find a car you MUST have at a dealer.

FWIW, my 2005 was bought USED the day before Christmas in - 2005, and yes I used my credit union, because of it's used car rate

BTW: I use my Discover card for everything possible and then pay it off in entirety every month. I then get the cash back rewards which I upgrade to a "partner" restaurant gift card = more money on that card than just my traded in value.
 
#12 ·
More info

I work in retail big ticket with finance . credit is 80 % of consumer base 20 % cash . credit is based on ability to repay but credit score on multi points of information .... loan to balance fresh new loans have a high to balance ratio so lower score till average brings it up. to offset this one could not put $ down finance 100% then with first payment send bank large lump sum to lower balance to limit but not needed for most people . high revolving credit balance to limit will hurt score more than new mortgage with high balance to limit. paying minimum on revolving will keep score same vs. paying large $ even if balance is ok will build points. length of accounts good vs. new accounts bad. score range bad 350 to 540 poor 540 to 620 average/good 620 to 720 great 720 to 800 excellent 800 + not all scores are real so be warned fico is a standard score and well reguarded , but most companies will try to sell you the "advantage" score read the fine print it is not what banks or lenders use and is not worth the 7$ to get it . credit bureaus score people with all three loan types ( revolving / cards , installment short term / auto , installment long / mortgage ) best with length of same accounts long ,balance to limit lower than 30% on revolving , older same mortgage acct. score is only the start some young people have a high # score with 1 account and short history but can not get a loan because there profile has no depth .disclaimer I am not a credit counselor and only talking in general terms .
 
#13 ·
Believe it or not, that makes sense to me. My credit score is 695 & was told if I bring my credit card balance down by $1,000 it would get me to about 720.
But then too, I have dealt with the same credit union for 30 years.
 
#15 ·
I read there is something about a Credit to debt ratio is somewhere factored in too. I have one Credit Card that has like a 30k limit that I use for everything and pay it off at the end of the month and it's worked for me so far, 809 when we bought our house in Sept.
 
#16 ·
Absolutely it is! They take all the credit limits you have on all your cards and weight that against how much of it you have borrow. For example if your have 10k total in all your credit limits, you should never be over %40 of that amount, or don't owe more than $4k at any point in time. This will have a severe negative affect on your credit.
 
#17 ·
Credit score also degrades over time if one does not accrue more credit debts. I was once over 800 in score (circa 2000 A.D.) and over the last 13 years I didn't purchase anything save for a house (which doesn't count). I was surprised to find my credit score had dropped to mid-700's upon my purchase of a new vehicle.
 
#19 ·
Even with a high credit score (mine was in the high 700s at the time) there's no guarantee of being able to secure a mortgage/loan. I had to burn a LOT of shoe leather to be able to get a loan with good terms to buy my current home.
 
#22 ·
When I deployed my credit score was around 720, with about $9k in debt between credit cards and my motorcycle.

I paid off everything except the motorcycle in my first 3 months, and by the time I got home my score was around 650. Also found out I had a a collection...of $1.14 from the used car loan I had paid off 3yrs prior.

Apparently, after a certain amount of time it does more damage to pay a collection off then to ignore it. Because paying it brings it to your recent history and negatively inpacts your rating.

Now we're around $14k in the hole between car payment, credit cards, wife's studen loans, and an invalid local tax collection (not liable for local taxes as I'm on AD outside of PA, but they've still been taxing me since 2009, including while deployed) I'm at 630 and wife is at 550.

This summer we will be paying everything off except her student loans, and all of the cards are going in the safe. Property we're buying with cash in the next 2yrs, and planning on building with no mortgage over the next 4-5yrs.

Screw credit scores. If you get your score too high (by showing you can pay all debt) it hurts just as bad as having a score in the 300s with all sorts of debt.
 
#23 ·
one of the perks

The greatest feeling on earth is reaching that point in life when you can see your way clear to OWE nothing to anybody ! I am EXTREMELY fortunate that life allowed me to reach that point at 58 yrs. Now at 72 I am the "bank" for my family...they think I am rich (which is not true, but I am totally comfortable). It sort'a snowballs...first got the cars paid for, then used that extra money (per month) to double up or triple up on other stuff. Got everything done but the mortgage that way and saved until able to pay off house. That freed up enough to start investing...real estate (very small stuff at first) and savings and some Stocks.
Tore up all credit cards and mailed back to them...at that point I started receiving more offers (mail/phone) than I ever had before. When you don't need their help is when they "volunteer" to help with loans or new credit cards...
Point of all of this is that I now offer to loan them money when they call(at the same rate they offer me!),

My credit score has fallen...and fallen!

and they can kiss my royal .....DI2

The key is to not "want" stuff you can't pay for with cash.
 
#24 ·
If you want a high score, the most effective method is to get three credit cards and set up each of them with autopay for a re-occurring bill.

Example:

Card 1: Electric Bill
Card 2: Gas Bill
Card 3: Water/Sewer Bill

They don't have to be those three. You can use your internet account, your cell phone bill, whatever.

You set those bills up for autopay, write down the card numbers and other info (including contacts), put that note in a safe place and shred the cards.

Then you just pay your bills every month, only instead of paying them directly, you pay the credit card companies.

Some folks believe that it wise to also carry a small balance from time to time. Like you get a $100 electric bill, send the CC company $75 and then at about 40-45 days pay the other $25.

I can't say for sure. I would need to see the algorithm the scoring agencies use to answer that, but it does seem plausible.


Oh yeah...
Then you have to wait. Because it takes time to affect your score.
 
#25 ·
I didn't read all of the replies above, so I may have missed this, but identity theft could be the cause of it too.

Two years ago, right after I got Comcast internet services, I suddenly started receiving dunning calls from collection agencies. They were saying that I owed Comcast close to $3000 in past services and equipment. This was in Chicago, IL.

No offense to anyone here from IL, but I have never, nor will I ever go to IL, primarily because of their gun laws.

At any rate, after getting a police report on the issue, and contacting all of the credit reporting agencies and forwarding a copy of the same, and hiring LifeLock to guard my credit and bank accounts from further intrusion, I found out this week that yet another collection agency still has an outstanding collection order on me from Comcast for the same thing. I called them today and they cleared it pending receipt of the police report.

Longer story somewhat shorter, the only way that I knew this was when I purchased a used vehicle week before last with a loan from my credit union, Navy Federal. Their FICO on me was 693, which is pretty bad considering my Equifax etc, scores are in the low 800's. Turns out that the outstanding collection, of which I was happily ignorant prior to the loan, was still on my report and dragging it down.

You might want to check your FICO history and see if someone has stolen your ID at some point and contributed to your score in a negative fashion.

BTW, for those that think a credit score is BS-which it really is-any employer will run one on you when they consider hiring you, and a bad one may hurt your prospects. I realize that it sucks, but that's how they do things nowadays. Just sayin'.
 
#27 ·
If you have a charge card that doesn't have a limit, then the agencies use the highest balance in the last 18 months as the limit. This means if you don't use the card often and keep a zero or low balance, that account reports as carrying 100% balance. Right now we're stuck with the fact that we've had an Amex for a very long time, so does it do more harm than good to cancel?
 
#28 ·
If you have a bad score, check who it is. Then dispute it. The credit score will go up and hardly any of them will go to the trouble to recheck and/or validate the debt.
 
#29 ·
and the number of the beast is…… a three digit number-just sayin'…

GI3
 
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