Credit Scores (1 Viewer)

[staphory]

Why are there so many types of credit scores? I went on the Experian site to get my FICO score. They had a warning stating that they give you your FICO 8 score and any potential lender may not use that. They might use a different FICO number that you the consumer may not have access to. How is this a thing?

 

[Optimus Prime]

Because there is no such thing as THE credit bureau

When people say the credit bureau they are really talking about the big 3 which is Experian, Equifax and Transunion

Your score may be different for all three because not everything is reported to all three

 

[nolaspe]

Credit? We don't need no stinkin' credit (at Frankie and Johnny's that is)...

 

[Sailorsaint]

I've been trying to get my score back up to 700 after it dropped to 630 when I paid off a lot of debt...go figure....anyway, it would go up about 1 point every few days until......I used a credit card, put $100 dollars on it. Yep, you read that right, $100. My score dropped from 664 to 632 the next day. It's all a scam and you will never win because you have to be deep in debt to have a decent score. I guess what I'll have to do is get an open loan at the bank, never use it, and make payments on it for a few years, maybe then I'll reach 700 again.

 

[Optimus Prime]

I've been trying to get my score back up to 700 after it dropped to 630 when I paid off a lot of debt...go figure....anyway, it would go up about 1 point every few days until......I used a credit card, put $100 dollars on it. Yep, you read that right, $100. My score dropped from 664 to 632 the next day. It's all a scam and you will never win because you have to be deep in debt to have a decent score. I guess what I'll have to do is get an open loan at the bank, never use it, and make payments on it for a few years, maybe then I'll reach 700 again.

Whatever equation they use to calculate the score is complicated to say the least

 

[Goatman Saint]

Because there is no such thing as THE credit bureau

When people say the credit bureau they are really talking about the big 3 which is Experian, Equifax and Transunion

Your score may be different for all three because not everything is reported to all three

And things are weighted differently between the three. Also, when you go to apply for an auto loan they may use a different model where it puts emphasis on previous car loans. There are so many variables it’s hard to really compare.

Biggest things I’ve noticed are having a huge availability in your card lines is good (I have about 100k in available credit) and a very low usage ratio. <10% although if you want the magic of an 850 it has to be under 1%

Add that to length of credit history (27 years for me) and of course paying payments on time and having a variety of debt. (Credit cards, car, house). I find my daughters credit is far more volatile than mine due to her shorter credit history.

 

[Optimus Prime]

Big change coming July 1st paid medical debt will no longer appear on credit report

So a lot of people will be getting a score bump over the summer

 

[Icon]

because you have to be deep in debt to have a decent score.

This is completely inaccurate and I hope anyone reading that post takes it with a grain of salt.

My credit score has been over 800 for the better part of the last 10 years, and was in the high 700s prior to that. In that time, I never missed a payment......and can probably count on one hand (with fingers left to spare) the number of times I had to pay interest as a result of not having the full amount paid by the due date of the credit card. Point being, I've rarely had "revolving debt"......and there are lengthy stretches where my CC goes unused, since it's typically used to make online purchases, hotel bookings, etc. Once the charge hits, it gets paid.

I hate that you had to deal with some annoying stuff pertaining to your credit score, but telling people that they "have to be deep in debt to have a decent credit score" is nonsense.

 

[Sailorsaint]

This is completely inaccurate and I hope anyone reading that post takes it with a grain of salt.

My credit score has been over 800 for the better part of the last 10 years, and was in the high 700s prior to that. In that time, I never missed a payment......and can probably count on one hand (with fingers left to spare) the number of times I had to pay interest as a result of not having the full amount paid by the due date of the credit card. Point being, I've rarely had "revolving debt"......and there are lengthy stretches where my CC goes unused, since it's typically used to make online purchases, hotel bookings, etc. Once the charge hits, it gets paid.

I hate that you had to deal with some annoying stuff pertaining to your credit score, but telling people that they "have to be deep in debt to have a decent credit score" is nonsense.

Well, It's funny that while I was deep in debt, so deep that I wasn't able to accumulate more until I paid off the current debt, my score was like 705 or so. I never missed any payments either. But when I finished paying everything off, my score went down about 70 points overnight. It was because I didn't have any open debt. I got rid of a CC, kept one. I have no debt right now, only monthly bills. My score climbs slowly. The minute I used my CC, within two days max, it drops another 30 points. Doesn't matter that I'll pay it off by the due date because my score won't jump 30 points overnite, it will slowly climb back to where it was over months. What am I supposed to think? They don't want to help your score, but they sure as hell don't mind hurting it.

 

[Tapxe]

I got rid of a CC

Could be the reason for the drop. A long held card with 0 balance is a boost to your score. You want a large line of credit. You also want very low % balance which dropping a card will impact significantly.

 

[Sailorsaint]

Could be the reason for the drop. A long held card with 0 balance is a boost to your score. You want a large line of credit. You also want very low % balance which dropping a card will impact significantly.

Yeh, that's why I said I needed to take out a bank loan, never use it, and just make payments on it for a few years.

 

[zatsnzapps]

I got rid of a CC

Like @Tapxe mentioned above, this is most likely the reason for the drop, assuming it was a credit card and not a charge card (meaning, it had a credit limit like a Visa or MC and not monthly full payoff but no set credit limit like the traditional AMEX cards).

The biggest component of your credit score is credit utilization. It's a simple calculation of your outstanding credit balance against your available credit. So, if you had two cards, each with a $1,000 credit limit and your outstanding balance was $500, your utilization with both cards open would be 25%, which is good because it's below the magic 30% number, but with one closed, you're now looking at 50%, which is bad because it's above the 30% threshold and you get whacked really hard when the utilization is above 30%.

 

[Tapxe]

Yeh, that's why I said I needed to take out a bank loan, never use it, and just make payments on it for a few years.

Don't see how that will help. You take a loan and you are increasing debt. You'd prob do better to open a new card every year or so up to 5-8 of them. Just get no annual membership on them, use them sparingly, and pay off immediately. Credit increases while debt does not.

Something like Credit Karma can show you the impacts etc if you are setup with them already. Sorted me out from mid 700's with no CC's to close to max in 4-5 years. I pay nothing in interest on most purchases and actually save money from cash back.

 

[zatsnzapps]

Yeh, that's why I said I needed to take out a bank loan, never use it, and just make payments on it for a few years.

I did this when I was first rebuilding my credit several years ago.

I took out the smallest loan I could from a bank (it might have even been a secured loan) for a 12 month term and just stuck the money in a figurative shoe box. I think I made 6 of the payments and then paid it off in full. I then took out another loan for a bit more and did the same thing.

It helped to build a good foundation. I should add - this was when I didn't have much of a history and what I had was crap. It was a good way to get a different type of credit on my profile.

 

[Icon]

Well, It's funny that while I was deep in debt, so deep that I wasn't able to accumulate more until I paid off the current debt, my score was like 705 or so. I never missed any payments either. But when I finished paying everything off, my score went down about 70 points overnight. It was because I didn't have any open debt. I got rid of a CC, kept one. I have no debt right now, only monthly bills. My score climbs slowly. The minute I used my CC, within two days max, it drops another 30 points. Doesn't matter that I'll pay it off by the due date because my score won't jump 30 points overnite, it will slowly climb back to where it was over months. What am I supposed to think? They don't want to help your score, but they sure as hell don't mind hurting it.

I don't have an explanation for why all this happened......but using your CC isn't gonna drop your score 30 points "within 2 days, max".

Quite honestly, I don't even believe the CC companies report anything beyond once a month.....so that just doesn't sound realistic. And sometimes it takes over 2 days just for the credit card charge to hit the account.

I feel like we're missing part of the story here (not saying you're doing that intentionally, just saying info is likely missing).