credit score ???'s

edselpdxJanuary 16, 2007

I just did my free annual credit reports via annualcreditreport.com. I paid an extra $8 to Transunion to get my credit score...only to realize later that I got a "VantageScore" and not a FICO score. I'm a bit confused by some of the results. I consider my credit to be very good, and refinanced my mortgage early in 2005 to a very good rate. I did divorce in 2005, but paid my ex out for his equity in cash and refinanced the mortgage into just my name. Several joint accounts (credit and mortgage) were closed as a result. My individual accounts were not. I owe about $4K on a car loan for a car that I paid mostly cash (75%) for in 2005 and am paying ahead; it will be paid in about 12 months. The reasons given for my "B" score were:

1. "Available credit on open revolving accts is too low"

I have about $30K in available credit and currently owe only about $2K. Salary is approx $80K/yr. That number is up after some unexpected expenses and Xmas... it will be paid off in 2. "The amount paid on your open real estate accounts is too low."

I refinanced my primary and HE loans into a single 30 yr fixed at an excellent rate in 2005. I pay about 10% extra each month towards principal. I have about $160K in untapped equity (no HELOC or anything), in what remains

3. "Your average credit amount on open real estate accounts is too low." See #2

4. The balances on your open accounts are too high in comparison to their credit limits". Come ON! See #1.

I currently am not looking to get any credit, but am concerned about my credit scores, and am concerned about a "B". No one can predict the future and I can't know if I might need/want some credit in the coming year or two.

Any recommendations on what I can do to make this look better? It seems counterintuitive to open new credit accounts to increase my revolving debt available, but ??? is that part of the key? If so, any recommendations? Should I get a HELOC and not use it to evidence the equity available to me? These seem like silly things to do to manipulate a number. Having more credit will NOT make me spend more. (I was $25K in CC debt once about 12 years ago and climbed out without help, so I am well aware of living within your means.)

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kudzu9

First, I'm not sure why you paid anything for your free credit report, but I'd use this as a lever to call them up and have a rep explain this further to you. The Vantage Score is something that was recently developed by the three credit agencies, but it is not very commmonly used. You should have been provided a FICO score for free. I've included a link that has a lot of useful info on FICO and Vantage scores and the relationship between the two.

Second, you should get reports from the other two (Experian and Equifax) for comparison.

Third, you didn't mention what your score was. I have very good credit, but my reports (I belong to Equifax credit monitoring service) always find several things I could improve, but they don't seem to have had any serious, negative consequences.

Good luck. Report back if you find out anything of interest.

Here is a link that might be useful: FICO/Vantage scores

    Bookmark   January 16, 2007 at 4:55PM
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western_pa_luann

What implications does the 'B' in a VantageScore have? Does anyone use it or care about it?

Most place use the FICO score and that is the one I'd worry about... not a B elsewhere.

Seriously, if it is not widely used (and I do not know that one way or the other), I would not worry about it!

    Bookmark   January 16, 2007 at 5:03PM
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alphacat

kudzu9 says that you should have been provided a FICO score for free. I have to say that I haven't seen such opportunities lately. I believe that the credit agencies have woken up to the fact that although they have to report any factual information they might have about you, they don't have to tell you how they evaluate that information.

    Bookmark   January 16, 2007 at 5:37PM
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kudzu9

alphacat-
You're half right, and half wrong.

Where you are right is that the credit agencies aren't required to give you details about evaluating info (I was simply suggesting that the OP could ask for an explanation of what seemed to me confusing info after she paid TransUnion).

Where you are wrong is doubting you could get a free credit score. The three major credit agencies are each required by the Federal Government to provide you with a free credit report annually. Below is the link site established by the Feds for that purpose. Be aware that this is the only web site you should use for this purpose because there are other sites that look very similar, but they are going to try to sell you something. As I recall, even using the official site, there are still some pitches to get credit stuff that will cost you, but you can ignore this and proceed on to get your annual free reports. Now don't say that Uncle Sam never did anything for you!

Here is a link that might be useful: Annual Credit Report

    Bookmark   January 16, 2007 at 5:55PM
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kudzu9

alphacat-
My apologies. For some reason I didn't pick up on the distinction you were making about the FICO score. I was just looking at the web site I referenced and, while it's true that the three agencies are required to give you a free credit report, that apparently does not include the FICO score, which you have to pay for. I've been snowbound and spent too much time in front of the computer. I think it's time for me to take a walk and clear my head!

    Bookmark   January 16, 2007 at 6:05PM
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edselpdx

Yes... credit reports are free once annually, but I figured that it was not a bad idea to get a credit score this year for under $10 (I didn't in the last couple of years, and figured I was good). The "VantageScore is 880, which you cannot compare directly to a FICO score apparently; an 880 is a "B" in their eyes.

I, too, am snowbound and therefore doing this today.

Any recommendations?

    Bookmark   January 16, 2007 at 7:23PM
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davidandkasie

free credit report-YES

free credit SCORE--NO NO NO

they only are required to give the report that shows what is in your file. but FICO scoring is not included in that.

the only way a consumer can see a true FICO report is to go to myfico.com and pull scores there. unless you see a site that proudly proclaims it is giving you a FICO score, it is what is called a FAKO score and is absolutely worthless when making credit decisions.

checkout creditboards.com. the newbies section there will give you all the info on this you require.

    Bookmark   January 17, 2007 at 12:20PM
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housenewbie

I know nothing about the 'vantage score' but I ran into the same thing when I pulled my fico score before applying for a mortgage. I had both too many credit accounts and too few. Huh??

I never did figure out what it meant; since we were buying a house we were too busy to go chasing around trying to find someone who could interpret the gobbledygook.

Next time, I'd go direct to fico and get their score; the credit bureaus are trying to reclaim some lost revenue by making up a fake 'credit score' that no one uses but that they can sell to unsuspecting consumers.

    Bookmark   January 17, 2007 at 12:37PM
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myfask

my experience I have found trans union to usually have a lower score than the other 2 and are not as updated.

the 2 credit inquires that will not affect your score are those done for solicitations and those you pull yourself.
If you haven't in the past year I would get the other 2 and see what they say I would pay the small amount for the scores so you have a baseline.
you may not of been paying the new mortgage long enough which could be why you got that strange response. After taking on a new mortgage it takes a few months for your credit to "settle down"

If you have $30k in available credit with only $2k in balances there is no need to open any new accounts.
pull the other 2 and see how they compare.
Should they have the same odd statements then I would call the credit agencies.

    Bookmark   January 17, 2007 at 3:18PM
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kudzu9

h_laugs-
Too many inquiries into your credit report by credit granting organizations can lower your score because it could indicate you are trying to open up too many accounts in a short period. But checking your credit report falls into a special category, and is treated differently by the credit agencies and their computers. It should not trigger any adverse effects, even if you do it a number of times.

    Bookmark   January 17, 2007 at 3:32PM
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edselpdx

Thanks myfask. I already checked all three's credit reports, but only got the score from the one company, just to get an idea. I'll think about it and decide whether to check the other scores or just not worry about it at this point, since I don't need more credit. It's just confusing the way things are worded and the implication that I have both too much and too little CC debt. I appreciate everyone's input.

Kudzu's right... You are allowed an annual self-check of your credit REPORT for free, which is why I've done it for the past several years...just looking for accuracy. One of them lists my ex as my spouse still, so I made sure to send out a letter to them to correct that. I really don't want his credit mixed with mine anymore (mine's better.)

    Bookmark   January 17, 2007 at 8:21PM
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sewist2000

OK what is a Beacon score? When I went to get a mortgage they went by a beacon score. Whatever that is. Diana in FL

    Bookmark   January 22, 2007 at 5:35PM
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Chemocurl zn5b/6a Indiana

Here is my 'guess' and it is just that...a guess.

Concerning 2 and 3.
refinanced my mortgage early in 2005 to a very good rate.
This now shows as a 'new' loan, and it has not been paid down much in one year, by their way of thinking.

I have about $160K in untapped equity (no HELOC or anything), in what remains
If I understand you correctly, you have equity in your home, but have not applied for a HELOC on it. Right? They don't have any idea really then that you have that equity...right?

Now this is just a 'thought' but you might want to pay off the car loan with some of that equity in your home, and then concentrate all your efforts toward paying off the HELOC. I imagine there will be some who will say 'NO' to doing that though.

I applied and was approved for a HELOC a few years ago, but have never tapped into it. I 'thought' I might want/need it to get the driveway paved, but found another way that was interest free for a year and that was all I needed. I might add that I have no loans 'open' at this time and no revolving credit 'owed', as CC are paid off each month.

My guess is that once the car loan is paid, that your score will improve significantly.

In the meantime your score is a high B, which is still miles above the norm.

Sue

    Bookmark   January 23, 2007 at 11:04AM
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bushleague

Banks are still using Fico's according to a mortgage buddy.
Fico's don't care how much paper you're carrying or what your house is worth. Fico knows that a 30 year is a waste of money.
There is a fine balance between balances/available credit/credit limits and excessive available credit. If you can figure this out, you have a Fico of 800+. No mystery, pay everything on time, even the light bill. Stay away from the "carrot" interest rates that are once again appearing since this how people got buried in the early 90's.

    Bookmark   January 26, 2007 at 8:42PM
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hrajotte

In my experience, credit scores mean little unless you are applying for instant credit, such as a store credit card for a current purchase, where the decision is made by a computer, based on your score.
Other lenders will look at your credit history much closer. For example, I received a prime mortgage rate in 1999, just 2 years after a Chapter 7 discharge. (I am not proud of that, but did learn a lot!) Now, 10 years later, with an impeccable use of credit since, paying all CC bills in full each month, my FICO score is only 663. It doesn't bother me much however, because several mortgage refinances and auto loans since have always been at a prime rate.

    Bookmark   January 31, 2007 at 8:47AM
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edselpdx

A follow-up from the OP... After some investigating, I did decide to go with a small HE loan (not HELOC), with a *fixed* 5.875 rate to refi the auto loan and do a few home improvements; no prepayment penalty. As a result of this, I was able to get my FICO score from the new lender (excellent). Interesting that my FICO was spectacular (as I expected) and the fake "credit score" they sold me was full of it. I plan to throw everything against the HE loan for the next year or two and pay off quickly. Even with some pretty minimal closing costs on the loan, I calculate that I am coming out ahead with the tax deduction I will earn.

    Bookmark   April 9, 2007 at 6:45PM
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sparksals

edselpdx.. where did you get an HE loan for 5.875%? We're paying prime -1 on our HELOC and it's 7.25. I was going to lock in a lower rate, but USAA isn't offering that low of a rate. Can you tell me where you got it so I can have some ammo for a lower rate?

    Bookmark   April 16, 2007 at 2:46AM
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edselpdx

Countrywide, of all places... they hold my primary loan as well (it's been sold multiple times in the last 2 years.)

    Bookmark   April 17, 2007 at 12:07PM
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