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Credit Score Hell!

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guiness56
Epic Contributor

Re: Credit Score Hell!


@apriestl wrote:

What is "rebucketing" anyway?  I had no idea that consolidating student loans would be so bad or refinancing for that matter.  I had read that student loan consolidation could actually help not hurt credit.  Apparently that advice wasn't accurate!  I thought installment accounts were treated differently when calculating the AAoA? 

 

Rebucketing is a scorecard.  You move from one scorecard to another as different things on your CR change.  Different length of history, no collections et.  Not sure exactly how many there are but you are in the same bucket as others with similar credit reports.

 

I didn't think judgments could be vacated after they are satisfied.  I thought this was true if you challenged it during the first year after the judgment was docketed.  At least in my state (WI) you have to request to vacate within the first 12 months.  The judgment I have is 1 year and 5 months old.  It was a crappy situation and had I known I could challenge it earlier I would have.  I'm certain the CA didn't have any proof of the debt since I had never heard from them before the judgment.  Not only that they sent it to the wrong address in my maiden name (I hadn't had the name in 7 years!)  so I wasn't served papers at all.  One day my mail man happened to knock on my door asking if the mail was mine we had recently moved down the street.  The court date had happened almost a month prior!  Most states allow for the one year to start from when you became aware of it.  But, yes, some do allow for satisfied judgments to be vacated.  If you don't know about it, you can't really challenge it.

 

I talked to an attorney recently.  He said the CA's send to inaccurate addresses and names on purpose to get default judgments.  Then they hope you don't challenge in time because they can't prove you owe the debt.  I also found out you can basically claim anyone owes you money and sue them!!  This is terrible Smiley Sad  If they don't come to court then whoever made the claim wins.  There is something really wrong with that system.  That is a whole other issue!  This is all very true and sad.

 

What is the best thing I can do to help my score right now?  I already pay all my cards on time and have 0% UTI reporting.  All open accounts are paid on time as agreed.  Had I known my student loans would hit me this hard I never would have done it!  I'm pretty much terrified of doing anything now since it seems much easier to hurt rather than help your score.  Don't let all your cards report a 0 balance.  FICO likes to see you make responsible use of your credit.  Let all but one CC report a 0 balance and the other at 9% or below for optimal FICO scoring.

 

I'm kind of starting to think that the credit scoring system is a little bit broken Smiley Sad  Many, many think this.

 


 

Message 11 of 22
apriestl
Established Member

Re: Credit Score Hell!

Thanks for all the answers!  I do occassionally let a card report a very low balance like twenty bucks.  I just got SO discouraged.  I keep trying to do the right things, but they seem to make the situation worse not better.

 

I thought about the Open Sky secured credit card.  They don't do a credit check.  I thought maybe one more positve account would help.  Is that true or would it just make it worse?  I really wanted to be at 700 by this time next year, so I could qualify for an FHA mortgage that my family desperately needs before the housing market completely rebounds!  Now I feel like it is totally out of reach considering there isn't much else I can do to increase my score.  I had raised my score 40 points in the last few months by disputing very old info on my credit report and by fixing errors on it, having good revolving accounts, etc.  It just seems like all was lost when my student loans were consolidated.

 

It is funny how being responsible can make it worse.  I thought consolidation would look good.  Making ten different payments, into one seemed like a responsible move.  It also makes it much easier to never miss a payment!

EQ 544 6/20/13, TU 588 6/20/13, EX?
EQ 619 9/24/13, TU 635 9/24/13 EX?
Goal: 700 across
Message 12 of 22
bahbahd
Established Contributor

Re: Credit Score Hell!

Score card is a little misleading as it carries a slight connotation of uniformity, like everyone is playing the same game and trying to get the best score. There is quite a variety in credit profiles. People's profiles are grouped together based on shared characteristics in to categories which are commonly called a buckets. 

 

To summarize a score watch quote: you may have transitioned from the category "consumers with a new credit history" to the category "consumers with a two- to five-year credit history"

 

You FICO score represents your credit worthiness against peers in your category. This explains why some people new to credit with less than a year or two of history can have a few good, relatively low-limit ,positive accounts and have scores well into the 700s.

 

There are several threads here I am sure. Here is one: http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Credit-Bucket-to-Bucket/td-p/83670

 

You did nothing wrong by consolidating your student loans or refinancing your auto loan if you ended up with new loan terms that benefit you. 

Message 13 of 22
guiness56
Epic Contributor

Re: Credit Score Hell!


@bahbahd wrote:

Score card is a little misleading as it carries a slight connotation of uniformity, like everyone is playing the same game and trying to get the best score. There is quite a variety in credit profiles. People's profiles are grouped together based on shared characteristics in to categories which are commonly called a buckets. 

 

To summarize a score watch quote: you may have transitioned from the category "consumers with a new credit history" to the category "consumers with a two- to five-year credit history"

 

You FICO score represents your credit worthiness against peers in your category. This explains why some people new to credit with less than a year or two of history can have a few good, relatively low-limit ,positive accounts and have scores well into the 700s.

 

There are several threads here I am sure. Here is one: http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Credit-Bucket-to-Bucket/td-p/83670

 

You did nothing wrong by consolidating your student loans or refinancing your auto loan if you ended up with new loan terms that benefit you. 


A scorecard and bucket are the same thing.  http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/FICO-Scoring-Buckets-or-quot-Scorecards-q...

 

That is the whole purpose of scorecards or buckets, if you perfer, is uniformity in credit profiles.

Message 14 of 22
apriestl
Established Member

Re: Credit Score Hell!

The links were very helpful bahbahd Smiley Happy 

EQ 544 6/20/13, TU 588 6/20/13, EX?
EQ 619 9/24/13, TU 635 9/24/13 EX?
Goal: 700 across
Message 15 of 22
goosedog
Regular Contributor

Re: Credit Score Hell!


@bahbahd wrote:

Two real issues to consider are:

  1. Loan consolidation and refinancing can lower your AAoA.
  2. Adding additional accounts to your CR could cause you to be rebucketed. 

 


Isn't that what i said in my post, the AAOA was taking a hit by consolidating and refinancing?

Message 16 of 22
CashOnDelivery
Established Contributor

Re: Credit Score Hell!


@goosedog wrote:

@bahbahd wrote:

Two real issues to consider are:

  1. Loan consolidation and refinancing can lower your AAoA.
  2. Adding additional accounts to your CR could cause you to be rebucketed. 

 


Isn't that what i said in my post, the AAOA was taking a hit by consolidating and refinancing?


You did. Poster disagreed on what you said about AAOA taking a hit, reworded it differently and was what you originaly mentioned. Regardless, the OP is getting some useful info on the topic.


2010: 475 EQ 2011: 503 EQ 2012: 600 EQ2013:632 EQ
Starting Score: 634 EQ-3/13/13
Current Score: 706 EQ-8/29/13 703 EX-7/12/13 705 TU-8/9/13
Goal Score: 700

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Message 17 of 22
bahbahd
Established Contributor

Re: Credit Score Hell!

My issue was with the wording of "It killed the longest installment loan date you had."  and "Sometimes you gotta pay the higher interest rates to keep that tradeline open." I my eyes, both of those statements make it sound like consolidation or refinancing is a bad because old, closed loan accounts are invalidated and frame it as if only open active accounts are included in FICO scoring.

 

I don't know why the poster experienced "when i consolidated my loans (my score) went from 625 to 597" but everyone's report is quite different and some will experience a much less significant points drop for adding an installment loan. Plus the consolidation itself can not be directly linked to that particular score drop. Adding any new account could have caused an AAoA change, rebucketing, or anything else that appeared as increased risk in that posters file. Some of my student loans have been transferred and opened up all new tradelines twice in the past three years. I saw score increases with all the closed and new accounts. 

 

To my point, it is not necessarily good advice to tell someone they should not refinance a high interest auto loan or consolidate student loans into a loan with better terms because of the reasons quoted above.

Message 18 of 22
apriestl
Established Member

Re: Credit Score Hell!

Does anyone know how AAoA is actually calculated?  Are different kinds of credit...revolving, installment, etc treated differently when calculating AAoA?

EQ 544 6/20/13, TU 588 6/20/13, EX?
EQ 619 9/24/13, TU 635 9/24/13 EX?
Goal: 700 across
Message 19 of 22
goosedog
Regular Contributor

Re: Credit Score Hell!


@bahbahd wrote:

My issue was with the wording of "It killed the longest installment loan date you had."  and "Sometimes you gotta pay the higher interest rates to keep that tradeline open." I my eyes, both of those statements make it sound like consolidation or refinancing is a bad because old, closed loan accounts are invalidated and frame it as if only open active accounts are included in FICO scoring.

 

I don't know why the poster experienced "when i consolidated my loans (my score) went from 625 to 597" but everyone's report is quite different and some will experience a much less significant points drop for adding an installment loan. Plus the consolidation itself can not be directly linked to that particular score drop. Adding any new account could have caused an AAoA change, rebucketing, or anything else that appeared as increased risk in that posters file. Some of my student loans have been transferred and opened up all new tradelines twice in the past three years. I saw score increases with all the closed and new accounts. 

 

To my point, it is not necessarily good advice to tell someone they should not refinance a high interest auto loan or consolidate student loans into a loan with better terms because of the reasons quoted above.


The question was in terms of someone who was building credit, not in terms of someone who already had other accounts established. I was commenting on the standpoint of this OP who is rebuilding credit. Refinancing and consolidating is not a bad thing unless you are in the first 2 years of credit repair in rebuilding.

Message 20 of 22
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