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FICO credit score


mp170.6

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Mine was better than I expected. 

 

The most important factor in one's credit score is on-time payments. If you don't ever miss a payment, the odds are your score will be very good.

 

If you miss even one payment, it can clobber your score.

 

Mine was 7 points higher than the last time I checked in 2009. 

 

It's really pretty easy to have high credit scores if you live within your means and pay the entire balance monthly. 

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The most important factor in one's credit score is on-time payments. If you don't ever miss a payment, the odds are your score will be very good.

 

That is one way to keep your score high, but not necessarily the most important. 

 

Keeping the balances on your credit cards between 20% and 30% of the maximum limit will net you the best score on your credit report, considering of course, all your payments have been made on time.

 

If you have a balance of 60%-70% of the maximum limit and always pay on time, your credit score will suffer because even though your payments are made on time, the balance the credit companies are seeing is higher than they'd prefer. 

 

Could also get into the 2 biggest credit analyzers and how their scores are scaled differently, meaning just because you see a 800+ score doesn't necessarily mean that's the one they'd use to qualify you for a loan etc., but that really opens up a floodgate of information not really relevant to the conversation. Just more or less something to keep in mind when they're giving you this "free" information.

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That is one way to keep your score high, but not necessarily the most important. 

 

Keeping the balances on your credit cards between 20% and 30% of the maximum limit will net you the best score on your credit report, considering of course, all your payments have been made on time.

 

If you have a balance of 60%-70% of the maximum limit and always pay on time, your credit score will suffer because even though your payments are made on time, the balance the credit companies are seeing is higher than they'd prefer. 

 

I've always paid the full balance on the due date.  Never once kept a balance and my score is 822. 

 

Not saying you're wrong, but there must be more to this?

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When we moved into our house we financed a bunch of stuff - furniture, flooring, backyard fence, blinds. Free Financing! May as well. My score dropped from 810 to 680. lolz

 

Ha. Awesome.

That's probably just due to running it a bunch in a short time frame.

Besides who cares - you use the 810 for the most important thing : the mortgage.

Doesn't matter what it is now! Take that banksters!

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If you're that high in the 800s, then you have more going on for you than just perfect payment history on credit cards.  You would have to have a nice average age of accounts, and a variety of credit sources (cards, car loans, home loans, student loans, etc) that also have excellent payment history.

 

That's just it.  I've never taken out a loan from any bank or financial institution. 

 

I was very fortunate to inherit some cash and property when relatives passed away many years ago.  Living frugal and investing that money has allowed me to get by without any loans (for now).  I only have three credit cards, a VISA that I haven't used in several years, a Discover card that I've had for a long time, and an American Express card that I got a few years back.  The credit limits on each card are not terribly high, maybe $5000-7000 each?

 

I sometimes wonder if the high score is a mistake because it goes against all conventional wisdom about FICO scores. 

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Credit scores aren't derived from simply paying bills on time. There is a whole matrix they use...maturity, history, but mainly debt to income (I use this mortgage term for the simple use of explaining).

 

The lower your debt, the higher your score or the lower your debt in conjunction with your ability to pay, the lower your score.

 

I know people that have foreclosures and within a year have a score in the 700's simply by having no debt.

 

Derogs, credit jargon for derogatory or negative marks, aren't killers like people think....30 day lates, collections, etc. They do hit your credit, mainly collections which can affect purchases like a house, but as an overall look at how your score is derived it's having open or available credit lines......the guy that has a couple credit cards or open trade lines with minimal to no balances is always going to have the highest score.

 

Credit scores are simply risk management tools for lenders, if you have little to no debt you are a great canidate to take on credit/debt.

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That's just it.  I've never taken out a loan from any bank or financial institution. 

 

I was very fortunate to inherit some cash and property when relatives passed away many years ago.  Living frugal and investing that money has allowed me to get by without any loans (for now).  I only have three credit cards, a VISA that I haven't used in several years, a Discover card that I've had for a long time, and an American Express card that I got a few years back.  The credit limits on each card are not terribly high, maybe $5000-7000 each?

 

I sometimes wonder if the high score is a mistake because it goes against all conventional wisdom about FICO scores. 

 

No, you just explained why your score and others that have high scores are just that.

 

Convential wisdom is the guy standing behind you in line telling someone they need to have x amount of debt or credit or only pay x amount to keep a balance at y.

 

Credit scores aren't indications of how well someone pays debt.

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I'm not sure if any do or don't. 

 

Most just use one bureau of either Experian, Trans Union, or Equifax. But all three differ. You might be 30 points off from one to the other.

 

Are you talking about FICO scores reported by the other companies, or their own version of a credit score? 

 

I don't know much about this stuff but I got a score from Experian(?) once that was calculated a different way; in other words, not a FICO. 

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Hmmm, I'm not even sure how to explain it in a simple manner. FICO is essentially the software or method in which creating credit scores, or the guidelines. The three agencies I mentioned, and the one you used, are the three major credit reporting agencies....these companies use FICO guidelines to state your FICO score, but each have mildly different parameters which is why your score with one of the three likely differs from the other two.

 

What you received is your FICO score, just not a conclusive FICO score because it is only from one reporting agency and not all three.

 

I'm not sure with car purchases, but for instance buying a home they will run your credit, but run it from each of the three agencies. Like I said, they all differ so what bank underwriters use is your mid score, the middle score of all three to determine your credit risk.

 

They all generally are pretty close, but every now and then you'll have two agencies be close and one way off because of some error or discrepancy...which is why mortgage banking uses three scores together. 

 

Most of these free credit reporting websites or things like credit cards giving you a free copy only use one of the agencies instead of all three because of cost. As long as they are from one ofthe three I mentioned they are reputable.

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My credit score has been about 780-790 for a long time, and nothing I do increases it. I pay my mortgage, student loans, and car payments on time, every month. I have no credit card debt. All family debt is in my name, so presumably I get the "credit" for paying it off/down, yet my wife has the better score.

I think a score of 760 is the magic number for loans, so my score is fine, but I would love to get it into the low 800s.

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Even lower. The magic number used to be 680, but depending on the bank it adjusted when the market crashed......it was a mix between stricter then easing with the fact so many people had to foreclose.

 

Without knowing anything about your credit my inclination is it is stagnant because you have a high debt ratio as you're taking on the family debt. Even though you're paying it on time it's still an open debt. Anything over 700 is superb. It seems to be the varying factors between 700 and 800+ is simply the amount of overall debt or open trade lines. Student loans are the best kind of debt and really help your credit, ironically.

 

On a side note, you all can look at your credit report and see how or why your credit score is what it is. Under each trade line there are key words that indicate good or bad trade lines, maturity, etc.

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I just purchased a new home.  Lived in it for six weeks now and it was a BITCH trying to get the loan.  I had to jump through all kinds of hoops. 

 

My now ex-wife and I ran into loan default issues (like many) and she was still in "our" home.  The unfortunate part is that she wasn't paying the line of credit loan.  These of course showed up on my credit and SEVERELY affected my creditworthiness.  My credit scores from the three reporting agencies were all over the place and collectively they were too low for a conventional loan.  So I had to go the FHA route with lifetime PMI. 

The mortgage company is now working on helping me get my credit fixed and they say within six months, if the credit looks good, I can refinance to get out of the PMI.

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No.

 

Credit score and debt to income (mainly income), pay stubs and length in specific industry dictate what a bank will approve for a purchase.

 

More importantly, before you buy a home simply be steady and current from pay stubs to even having your drivers license non-expired. Changing jobs isn't too big of an issue as long as it's in the same industry, but so many people prolong the process by buying a boat or some large expense or depositing a huge amount into their bank account. It just raises red flags for the underwriter and they have to redo the percentages/ratios and likely have you write a letter of explanation for the significant money jumps....if there is one blow back to the market collapsing aside from 20% down on purchases is underwriters requiring letters for so much shit, from where money is spent and why to even things like a title change at your place of employment.

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No.

 

Credit score and debt to income (mainly income), pay stubs and length in specific industry dictate what a bank will approve for a purchase.

 

More importantly, before you buy a home simply be steady and current from pay stubs to even having your drivers license non-expired. Changing jobs isn't too big of an issue as long as it's in the same industry, but so many people prolong the process by buying a boat or some large expense or depositing a huge amount into their bank account. It just raises red flags for the underwriter and they have to redo the percentages/ratios and likely have you write a letter of explanation for the significant money jumps....if there is one blow back to the market collapsing aside from 20% down on purchases is underwriters requiring letters for so much shit, from where money is spent and why to even things like a title change at your place of employment.

this is absolutely true.  I deposited some cash in my accounts while the lender was working on the loan and they got a little peeved at me and said that I would have to explain where the money came from.  They said the underwriter is very particular and that I would have to have a letter for EVERY deposit and/or withdrawals that seemed out of the ordinary.  My lender also wanted to make sure that I refrained from using my credit for almost everything.  Any use of credit that was deemed too large would have an effect. 

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More importantly, before you buy a home simply be steady and current from pay stubs to even having your drivers license non-expired. Changing jobs isn't too big of an issue as long as it's in the same industry, but so many people prolong the process by buying a boat or some large expense or depositing a huge amount into their bank account. It just raises red flags for the underwriter and they have to redo the percentages/ratios and likely have you write a letter of explanation for the significant money jumps....if there is one blow back to the market collapsing aside from 20% down on purchases is underwriters requiring letters for so much shit, from where money is spent and why to even things like a title change at your place of employment.

 

Would it be accurate to assume it's more difficult the more money you need? 

 

I presume they are much more strict if you're buying a $1 million house, as opposed to a $150,000 house with a $75,000 down payment. 

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