Credit Score question

Discussion in 'General Discussion' started by Bryan, Jan 27, 2009.

  1. Bryan

    Bryan ΜΟΛΩΝ ΛΑΒΕ

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    So I just graduated and I'm trying to settle my finances in anticipation of returning to that whole "working" thing. Part of that was checking my credit scores, and they're pretty shitty. My Vantage score is 697 according to TransUnion and my FICO is 627 per EquiFax.

    I know a big mark against me is that I was carrying too much credit card debt due to school, but that's completely paid off now and all the accounts are closed. Now my only debt is mortgages and student loans. And I've only ever had two late payments, one car and one credit card, both less than 30 days.

    I feel like I'm rock-solid financially, but I know the credit score plays a huge role in how lenders perceive you, and I want to make sure that my "image" is good. While I don't intend to be looking for loans or anything in the immediate future, I'm planning on purchasing some property in a year or so, and I'd like to improve my score in the meantime to make financing easier. Are there tricks to doing this?
     
  2. Razerwire

    Razerwire 99 Problems... Super Mod

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    One way may be to get more credit cards but don't use them so that you can lower your debt to usage ratio. But make sure you sign up for credit cards that have no fees and such.

    The other way would be simply to never ever make a late payment ever again. Can't stress the "ever."
    And of course pay everything else diligently.

    It takes a couple of months but it should help.
     
  3. Chaos Muffin

    Chaos Muffin Misadventure Veteran

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    < Would also like to know. (edit- thanks RW) I just make sure I pay all debts off asap.
    I've also stayed away from all credit cards , only use what's in the bank.
    It's for my own good , I know how I can get carried away

    I have outstanding credit, but nothing wrong with wanting it perfect.
     
  4. Aaron

    Aaron Master of Crystalocution Moderator Content Contributor

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    The best things that I have heard for a bump is mostly what RW said. Open up a couple of no frills credit cards, then shred the plastic demons that they send. Having credit and not using it is a big plus.

    HOWEVER

    Any late payments are going to stick on your record (water and electric bills can also be included in this) for up to 5 years. Now if you get in the door some place, and explain to them that you were a student and this and that then they might take that into account, but the person you talk to still has to sell everything to an underwriter type person that's likely chained to a desk in the basement and thusly is very cranky.
     
  5. Jeremy.B

    Jeremy.B Formerly Leader Blackout TFW2005 Supporter

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    I had some credit issues when I was younger - young, dumb and stupid - and had to take care of that a few years back. My credit score is up over 700 (per trans union), wish it was a bit higher. Although I think new house payments and paying off my truck next year will help.

    By late bills do you mean late as in deliquent, or late as in 5 days past the due date?
     
  6. Razerwire

    Razerwire 99 Problems... Super Mod

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    I thought it was up to 7 years that the late payments would stick around on the record.

    But yeah, like Aaron said, explaining to them in person would be a good bet. If the two late payments were a long time ago and everything since then has been in tip top shape with no late payments then you'd have yourself a convincing argument.
     
  7. Tfgraveyard

    Tfgraveyard Not a Fan of the Fans

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    Actually, having credit cards, and not using them, can sometimes be a bad thing. I can't explain it, but my wife was a lending officer, and that was one of the main things they looked at. Something about the "potential" to bury themselves. Could just be a local thing too, WI has some pretty strict credit laws etc.
     
  8. Razerwire

    Razerwire 99 Problems... Super Mod

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    It certainly can be viewed as a bad thing like you said. Which is why doing it in moderation is imperative.

    I'd say have one credit card that you use all the time and then maybe one or two more on top of that that you don't use at all.

    Also, how much each credit card as far as limits go can be a factor too.
     
  9. mineraljane

    mineraljane Gravity Hugger

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    You probably know this already, but you can pull all three of your credit reports once per year. Pull them all at once so you can compare them. You'd be surprised how many (major or minor) errors are contained within the reports. You'll want to do all three at once so you can make absolutely certain that they are in line with each other. (Some lenders prefer one bureau over another, but some pull randomly between the three. After all, they're making money on your information, so make sure they have everything absolutely correct.

    As an example, on one of my last pulls, Equifax had a credit card listed as having no credit limit. The limit in place, for scoring purposes, was actually the balance on the card which gave the impression of 100% utilization. I had just paid a tuition bill of $2,000, so instead of being at roughly 20% it appeared as though I was at the limit. This, obviously, severely aversely affected my score.

    That said, if anything is wrong, dispute it. Keep records and keep disputing until they correct their errors. (If they don't correct, in certain cases you're entitled to compensation for their error, but that's another story altogether.) I'll mention this as well, but some may find it ethically murky at best: you don't necessarily have to dispute only things which are completely incorrect. For example, one could dispute a single late payment as being "never late" and it is entirely possible that it will be removed from your report within 30 days.

    Check out a site like creditboards.com. Those folks are as obsessed with all-things credit like we are with Transformers here. Have a question, they'll know the answer.

    Also, one more thing: never go by any of the proprietary score generators used by the three credit bureaus. They only devised those in order to "fool" folks into believing that they're getting an accurate representation of their credit scores. No lenders use them so don't bother paying for it as it's useless as a real tool and most likely will vary widely from your true FICO score. In other words, only pay attention to your FICO score.

    Oh, and one more trick: if you do happen to be paying for a monthly credit monitoring service, pull your report every single day. Transunion and Experian use a database they can apparently only hold so much information. By pulling your report every day, you generate a "soft" pull only viewable by you. However, these pulls go into the same pool with the "hard" variety when you apply for an account. At a certain point, the "soft" pulls overwhelm the "hard" and force them out of the pool and off your credit report well before their intended two year lifespan. (This used to work, but I don't have any inquiries any longer so I'm not positive.)
     
  10. bigkid24

    bigkid24 Well-Known Member

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    I would time the credit reports 1 every 4 months because then you are constantly monitoring yourself instead of blowing it all at once. A lot can happen in a year as you wait to pull all three again.

    You don't want too much credit because then lenders see that you might be able to pull all of that credit at once and have too much debt which will bury you.

    On the high side you don't want more than 50% utilization of any credit line. Probably 20%-30% would be optimal.

    Making your payments on time is a good way to raise your credit score.

    Oh and to give yourself a ballpark on what your FICO score is from your VantageScore multiply your VS by .86. It's not exact but you'll have an idea.
     
  11. Tfgraveyard

    Tfgraveyard Not a Fan of the Fans

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    I gotta agree with mineraljane. Pull your credit reports at least once a year. I do it every year, and it's amazing the errors that show up.
     
  12. Bryan

    Bryan ΜΟΛΩΝ ΛΑΒΕ

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    Definitely. I only pulled two today, and there were a couple of minor errors on both. I filed disputes for all of them and will follow up each one.

    Far as the daily thing...man, that's probably a great idea, but I honestly can't be bothered with that. Well, says the guy who's on a Transformers website damn near every day. :lol 

    The credit card thing is so unclear to me. I did leave one open with the bank I check and save (and invest and insure) with, and I figured I'd use it for large purchases or on the internet just to keep a pattern of incurring and repaying debt going.
    No, just the 5+ days late thing, never anything delinquent. Literally, only two times in the last eight years, and both times it was just being a dummy and not doing an e-pay on time 'cause I was on vaction or sumthin'.
     
  13. Aaron

    Aaron Master of Crystalocution Moderator Content Contributor

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    That's all iffy as memory serves. Some places report late and deliquent as the same thing, and others report it differently.

    It could be 7, I just pulled that number from hazy memory of my home buying experience a couple of years ago, and I saw that it didn't go all the way to the beginning of my college times. Maybe it was the bank that only looked at the last 5.

    And from what I remember of talking with bank reps, the hard part can be just getting in the door to talk to a real person with sway. But once you find them they'll listen to you. They want to find responsible people to lend money to because that's how a bank makes it's money.

    See, this is something that I saw the last time I got a full report. The reasons for points against me were both, too high amount of potential credit, and too much credit usage. I'd have to believe that it's just another case where the worker will look at the raw data that their bank is concerned with, and sod all the rest.
     

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