The New Credit Score Rules

[Cat Damiano]

If you only read one article about credit scores this year, read this one.

The average credit score nationwide is 666, according to CreditKarma.com. That's not only an ominous number, but can be a costly one.


Based on CreditKarma.com's data, the trend amongst lenders shows that a 660 credit score is the threshold to be approved for a mortgage, auto loan and unsecured credit card. Digging deeper into consumers' credit health, nearly 40% of consumers have a credit score below 660. That means 4 out of 10 Americans would likely be denied for a mortgage and auto loan, charged sky-high interest rates, and only qualify for a secured credit card.



new-credit-score-rules-forbes: Personal Finance News from Yahoo! Finance

 

[freedomwon]

Hi Cat - You beat me to it. And it's on a sticky no less! Very Nice! Article is definitely a good read. I will say that I recently signed up at Free Credit Score & Credit Report Card. No Credit Card Needed for FREE & found the simulator portion very interesting. For instance I learned that by opening a new card & doing a balance transfer it will increase my credit score by 40 points!

 

[Cat Damiano]

LOL...........

That is really interesting that the score would increase by 40 points that is pretty significant and a good tip, thanks for sharing that.

 

[noonie]

I just wanted to share a thing that happened today. I got a call from Sears (a card I paid down to $0 balance, but DIDN'T close a few months ago), "offering" to send me a free copy of my credit report and pitching a credit monitoring service to "prevent identity theft." I said no thanks, I already have credit monitoring, and he was pushy and asked me to take a look at the materials. I said.. NO, you do NOT have my permission to run/pull a credit report on me, and he promptly hung up. I know good and well that they just want my blessing to run my credit report so they can snoop and use our default/foreclosure as an excuse to close my credit account. I also don't want the FICO drop a credit inquiry causes. In general, how long do I have to charge something small to keep the card/line open before they close it for "lack of activity?"

 

[Cat Damiano]

noonie,


Each card would be different, Sears is a CitiBank card I believe and it may say something regarding this in the updated user agreement that they had recently sent out.

 

[bcabo]

I am really late to the game on this one. I paid off a WF Visa a couple years ago. After a year of not using it, they closed it due to inactivity. From talking to other people, it seems about a year is the norm.

 

[DrDrew]

How is this possible? My house was foreclosed on November 17. We're thinking of moving to a new city, so I decided to check my credit score today to see how it might affect rental options... My scores during the delinquency/foreclosure were running into the low 600s I think... Now I'm at 750-760. I'm not complaining...but Is that possible? Is there some other score I should be looking at rather than Experian/TransUnion/Equifax?

 

[Cat Damiano]

DrDrew,


Those are the three bureaus input that make up the FICO score. The following article explains more about how that number is calculated and what type of history goes into it;

How credit scores work, how a score is calculated (Page 1 of 3)

 

[DrDrew]

It's fascinating... so I've had great credit for over 20 years... I have a good mix of credit... I use my credit cards but not too much... my student loans and auto loans have always been paid... I paid off one other mortgage... the only 'problem' on it was my foreclosure... and I'm only 60 points down from where I was the day before I missed the first payment. What was the worry about? Yeah, I can't buy a house for the next few years, but...

 

[interesting...]

the credit rating agencies are on crack lately... the only negative I have on my record is "no negatives". They actually listed that as bringing down my score. Sorta bizarre if ya asks me.

 

[shayl475]

It's fascinating... so I've had great credit for over 20 years... I have a good mix of credit... I use my credit cards but not too much... my student loans and auto loans have always been paid... I paid off one other mortgage... the only 'problem' on it was my foreclosure... and I'm only 60 points down from where I was the day before I missed the first payment. What was the worry about? Yeah, I can't buy a house for the next few years, but...

Same here, my score only down 54 points from the almost 800 score I had before foreclosure. Sure not enough for all of the sleepless nights I spent. Life is really good now and all I can say is why did we wait so long?

 

[needhelpGA]

Hello all, I am new to this forum. I am so glad to have found this forum.

I am currently going through a very difficult credit reporting error by Wells Fargo Home Mortgage (WFHM). Here is what happened to me. I had a foreclosure in 12/2010. WFHM did not file for or receive delinquency judgment within 30 days or for that matter just did not file any deficiency. A year later in 10/2011 I got bad advice from an attorney to file chapter 7 in case the bank came after me. So I filed for chapter 7 even though I should not have. Soon after that I got my job back and my credit score is right at 703 (FICO). The bank said I can qualify for a FHA mortgage now because it has been 3 years from foreclosure and 2 years from bankruptcy. So we pulled the credit report and to my surprise WFHM had put date of delinquency as 10/2011. This ruined my chance of getting a house this year. My question is, if there was no deficiency, how come there is delinquency, even if WFHM was included on Schedule F of Chapter 7 bankruptcy? I called WFHM and they did not know why I would be delinquent since the property was sold back to the bank and in Georgia (OCGA 44-14-161) there cannot be any deficiency if it was not granted by the court. So I wrote a letter to WFHM and they said they will review it and get back to me. It's been two months now. How long do I have to wait for their answer? I just mailed letters to three Credit Bureaus to correct the mistake, since WFHM did not bother to correct it. How long do I have to wait for the correction? Will it be corrected or am I wrong? Any answer will be greatly appreciated. Thanks.

 

[TomEason]

needhelpGA

Welcome to the community.

Unfortunately your experience with WFHM isn't at all unusual.

You might download the FCRA (the act that governs credit reporting). That act is enforced by the FCC.

 

[hooligan]

Hi Cat - You beat me to it. And it's on a sticky no less! Very Nice! Article is definitely a good read. I will say that I recently signed up at Free Credit Score & Credit Report Card. No Credit Card Needed for FREE & found the simulator portion very interesting. For instance I learned that by opening a new card & doing a balance transfer it will increase my credit score by 40 points!

Yes, as we were getting ready to close on our new house last Oct - our mortgage broker informed us that the magic number for CC balance vs credit limit is 50%. My wife opened a new CC, transfered part of the balance from an existing card which resulted in both accounts falling below the 50% balance vs credit limit and her credit score went up by nearly 50 points.

 

[freedomwon]

Hooligan - that is very good news. Just that one little move created nearly a 50 point increase in your credit score. Good Job!!!

It's been a while since I've logged in & noticed my hampster wheel isn't turning anymore! LOL

 

[MarkSimms]

One thing to do to improve your credit score is negotiate with the credit card companies. If you paid your bills on time but due to unemployment, you could no longer pay, contact the credit card company by writing a letter. Ask the creditors if they could erase the debt or the account that went to collection. You could also write a letter offering to pay the remaining balance if the creditor will then report the account as “paid as agreed” or maybe even remove it altogether. Although, be sure that the creditor agrees to this in writing before you make any payment. The creditor could make a good-will adjustment since you were a good paying customer in the past.

 

[Elsker-meg]

If you only read one article about credit scores this year, read this one.

The average credit score nationwide is 666, according to CreditKarma.com. That's not only an ominous number, but can be a costly one.


Based on CreditKarma.com's data, the trend amongst lenders shows that a 660 credit score is the threshold to be approved for a mortgage, auto loan and unsecured credit card. Digging deeper into consumers' credit health, nearly 40% of consumers have a credit score below 660. That means 4 out of 10 Americans would likely be denied for a mortgage and auto loan, charged sky-high interest rates, and only qualify for a secured credit card.



new-credit-score-rules-forbes: Personal Finance News from Yahoo! Finance

 

[Elsker-meg]

Hi all, OK I am confused as usual... I've check with credit karma and both transunion and equifax are the same score but experian is lower by 102 points ... I have been told that most lenders ONLY look at Experian would this be a true fact? And if that is so, then I wouldn't be able to get ANY type would that be correct???

 

[Free Wheelin]

The bottom line is that loan officers and lenders will ALWAYS use the lowest score they can obtain on you just to push you into a higher APR on your loans. This also benefits the salesman or the person writing the loan i.e. higher commision (or points) on the loan due to a lower credit score.

You can count on a lender always obtaining and using a LOWER SCORE than you could obtain on your own doing a FICO credit score check through all three of the major credit monitoring agencies. This always amazed me and is still the standard practice in use today.

I walked to my bank in with my credit report and credit scores in hand the last time I applied for a bill consolidation loan and was amazed that I was denied due to a "credit score" of much less than was printed on my report (which I had to pay for). When he showed me the score that the bank was using, it was about 80 points less than my lowest score from all three agencies. When I inquired why the score they got was so far off from my actual score he replied that the scores that we can obtain on our own are actually different than the scores lenders get and use.

Go figure!!

 

[Gniot_group]

Hello Every One i am new here.

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