07-07-2011 07:32 AM - last edited on 07-07-2011 07:34 AM by llecs
OK-I'm a newbie but have been pouring through these forums since I decided to take control of my credit. Back in 9/2010 after selling my first house, I got a mortgage with a credit score of 689 (not sure which CRA). In May 2011, we (DH and myself) applied for a HELOC thru our credit union and got approved but didnt have enough equity in the house yet. At that time, I got a a letter from the credit union indicating a credit score of 641 for me (again not sure from which CRA). I'n not sure why my score went down--maybe because of the change in my debt -to-income ratio with the new larger mortgage?? My only other current debt is student loans which have been current for years. I have one late payment in Feb 2009 from a paid off auto loan and one collection from 2007 for medical expenses for $760 that I have been advised not to bother paying off (old-damage already done). I've had other installment loans that were always current and have been paid off.
My issue is that I do not have any revolving credit--i've always been a little leary of credit cards and CC debt. I would like to apply for a cash-back rewards CC to use only for groceries and gas and pay it in full every month. Then, I would like to get another CC with a low APR that I can carry a balance on for home improvements.
The other issue is too many credit inquiries in the past year--I believe this is from mortgage shopping over a period of several months. But that is an issue for another board!
1) What is the best product to get my current credit scores? Yesterday, I got the annual free reports from annualcreditreports and everything seems to be accurate. But, now, i need to know my current credt scores to see if I would qualify for a cash-back CC (I'm not really interested in getting a dept store card as it would lead to unneccessary spending!).
2) Which credit product should I purchase to monitor my scores and track changes to my reports as I get and use revolving credit accounts? How often should I monitor the scores and reports if I'm just interested in tracking the effects of opening revolving credit accounts.
3) Which product has a simulator to predict changes as I consider opening revolving credit accounts and pursuing a HELOC possibly next spring as I continue to pay extra on the mortgage principle?
My apologies if this is not the correct location for this posting. Mods--if this is the incorrect location, please feel free to relocate : )
07-07-2011 07:35 AM
Welcome to the forums!
OP, I split your post to form a new one here. I have a hunch there might be follow up questions unrelated to CMSs and wanted to get as much exposure to your post as possible. I had to edit the title, but changed nothing else. If you'd like to change the title, click "Options" and then "Edit Message".
07-07-2011 08:07 AM
Usually when you apply for a mortgage-related product, you'll often get all 3 scores as opposed to one. Quite frequently, the lender will cite the lower of your two mid scores (DH and yourself) when they recite the score back to you. They should have given you some docs showing your CR and the 3 scores associated with each, for both of you back in May (assuming they did pull all 3). It might be worth going back to see which version of FICO score they used for each.
A lot can happen between last October and now. A change could be due to added accounts, dropped accounts, changes in CC utilization, and so on. You'd have to compare reports side by side betweeen then and now to see the differences.
FICO doesn't take your income into consideration and thus DTI isn't a part of FICO scoring. However, lenders do consider DTI on their own and that could always be a possibility for the denial. Other reasons could be the lack of equity since it is a newer mortgage in a down economy. Score could be an issue too. The lender would tell you the reasons.
How bad is the late? If a 30-day, don't bother with a GW letter. THe negative impact is probably all gone by now.
The CA hurts. There are steps you can take to get it removed via a payment. Whoever told you not to pay, due to the damage, is right. Whether paid or unpaid, the damage to your FICO score is the same. However, you can get it off via one of two methods: the HIPAA process or via sending a DV letter followed up with a PFD if they verify and you agree with the debt. You might want to ask in Rebuilding YOur Credit for more info on that.
CCs and revolving credit are a very important part of FICO scoring. If lacking CCs now, you'd see a very modest gain just by opening one. Many associate CCs with debt, or credit = debt. Definitely not true. You can open a CC, help your mix of credit, and pay in full monthly to avoid interest and remain CC debt free. In fact, you don't even have to use it monthly; just use it every 3-4 months to keep it active. And when you use it, just buy a cup of coffee or pack of gum and pay it in full after the charge posts online. If lacking any CCs, I recommend starting a secured CC first to avoid denials (due to not having CCs) and to limit inquiries.
Inquiry damage is overrated. Don't worry about it. Also, FICO gathers all of your mortgage inquiries on each report and ignores all of them but one if you applied for the mortgage within a given time frame (14-45 days depending on the report and the FICO version used). So, if you applied 100x in a 2-week period, then FICO ignores 99 of those inquiries.
1) Read the first post of the CMS thread. Your choices for a FICO score are very limited. You can only get your EQ FICO from myFICO, your lender, or from www.equifax.com/myfico-products. You can only get your TU FICO from your lender or buy it from myFICO.com. Finally, as of 2 years ago EX blocked consumer access to their FICO score. You can no longer buy it from anywhere but you can get it from your lender if they pulled it. BTW, there are other places you can get your FICO score. It is listed at the bottom of the first post in the CMS thread. Other places offer scores, but they are not FICO scores.
2) There are only 2 products out there in the universe that monitor both your FICO score and your credit report. One is Score Watch®. SW monitors EQ only and will alert you to major changes to your report like increased (not decreased) balances, added accounts, new inquiries, and the like. It also will monitor your EQ FICO score every 7-10 days for changes and will alert you to that. You also get 2 reports w/ FICO score per year with one being used when you subscribe. MyFICO offers this as well as Equifax.com. The other product is FICO® Quarterly Monitoring. This monitors TU only and doesn't alert you to increased balances, new accts, etc. like SW. However, this acts like a pre-paid plan to get your TU FICO report and score on a quarterly basis at a discount. It does also have an ID-theft related monitoring attachment to it that monitors your name for changes, changes in your SSN, new addresses, etc., though nothing credit related. There are no other products out there anywhere that monitor the CRAs and FICO scores together.
3) IIRC, the only FICO simulators out there are available via here and it seems that bankrate.com also has one. These are free. If you order a fICO report from here, it'll have a simulator attached to it and will give you score estimates based on your last score pull.
Side note: if report monitoring is important as well as FICO scores, then consider two different products instead of one. Because you can only buy your FICO score from a couple of places, treat scores apart from reports. You can get your reports most anywhere. If interested in pulling your reports daily (which come in handy during repair), then your choices are limited. If interested in just once/month, then you have quite a few choices. If quarterly, there are products out there too. See the CMS Guide for more info. Virtually all of them monitor your credit daily too. And nearly all of them offer scores. Just ignore the scores because they aren't FICO scores. As you see changes to your report, then consider a second service to see your FICO score change. FICO® Standard is what I use after seeing report changes so I can see the FICO impact.
07-07-2011 10:55 AM
OK-I will get to work on the old CA. I hate that it's there. I assume that trying to get a DV letter and a PFD will take some time, so I'm not sure if daily report monitoring is necesary right now. Maybe, I pull my two credit scores from the Myfico Standard and apply for a CC now. Pursue the DV and PFD for the old CA. Submit those. Then, purchase a 3-in-1 like CCT to monitor changes on each report (I believe CCT is a monthly update??). And purchase Myfico Standard as I see changes in the reports to track any subsequent changes in my credit scores. Does that make sense? Or is there a cheaper method?
Also, is a secured CC the only way to go? I didn't think I needed to do that after getting a 350K mortgage, no lates in over 2 yrs, and a 22% debt-to-income ratio. P.S. the mortgage is only in my name. DH carries the benefits, I make the money .
Thanks again, for your information
07-07-2011 12:37 PM
You are on the right track.
CCT is daily (though they have threatened to change the frequency recently, but never followed though). If wanting daily, CCT is resold by USAA (anyone can have access to this product). The price is at least half the price.
That's what I do. As I see changes, I come back here. This is the cheaper alternative. However, if you find yourself pulling 3-4 times per month for a FICO score, then subscribe to ScoreWatch. You get all future EQ FICO reports for 30% off. Or Quarterly Monitoring (TUQM) offers 20% off both TU and/or EQ. In the CMS Guide, there are alternative places to get your FICO for cheaper or free, but they lack the reports. Worth checking out though (scroll to bottom of first post).
I say secured because getting approved for the first CC can be challenging due to a lack of revolving history. IMO, inquiry damage is overrated so I personally wouldn't mind getting denied for the chance at an unsecured.