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New Member
nataneh55
Posts: 1
Registered: ‎05-17-2011

Re: Credit Scoring 101 - START HERE!

This is the first time I logged on to this site. I was looking for info and lo and behold I FOUND it right here.

Thank you so much for all this info. You have answered my questions without me even asking. AWESOME.

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Community Leader
Epic Contributor
haulingthescoreup
Posts: 28,114
Registered: ‎04-01-2007

Re: Credit Scoring 101 - START HERE!

I moved patrickscott's post to form its own thread titled: patrickscott: Need to raise score to qualify for mortgage

New Member
rgoodwin80
Posts: 3
Registered: ‎05-16-2012

Re: Credit Scoring 101 - START HERE!

Thanks very useful info!

Valued Member
OptimalFICO
Posts: 203
Registered: ‎07-05-2009

Re: Credit Scoring 101 - START HERE!

Shouldn't the guidance be changed regarding scores between 720 and 750 being suitable? I have recently read several credible sources that assert that a desirable FICO score is now anything above 760, and should be the goal of every consumer.

Since the credit crisis, many banks, insurers, etc. have raised their minimum credit score requirements. To obtain the best rates on a conventional mortgage these days, the minimum qualifying score is often 760. Thanks.
Established Member
Kwao
Posts: 21
Registered: ‎08-25-2012

Re: Credit Scoring 101 - START HERE!

When your credit score changes with one company, does it change with the other 2 as well?

Moderator Emeritus
llecs
Posts: 32,880
Registered: ‎08-04-2007

Re: Credit Scoring 101 - START HERE!

Not necessarily. As you know there are FICO scores for each of the 3 CRAs (e.g. TransUnion, etc). Each formula is different. So, the FICO formula for TU on here differs from the EQ FICO on here. The differences are slight, but if both credit reports are EXACTLY alike, and one score changed, it doesn't necessarily mean the other would change in the same direction, or even at all. And of course both credit reports (or comparing all 3) aren't exactly alike. You might have different inquiries, different accounts, different dates, and so on which would impact that score change had one occurred. Also, credit reports don't change at the same time when creditors update. Experian tends to be the fastest to update with TU being the slowest.

New Visitor
JSizzle
Posts: 1
Registered: ‎02-19-2013

Re: Credit Scoring 101 - START HERE!

Is it more effective in increasing your score to charging things to your credit card an paying the total amount off monthly or to charge under 10% of the card limit, carrying the balance and paying it over a few month period?

 

Thanks for your help! :smileyhappy:

New Visitor
marc76
Posts: 1
Registered: ‎02-19-2013

Re: Credit Scoring 101 - START HERE!

So I am new to the myFICO site and I have more questions now than ever. First thing is that each time I have gone for a loan they have always done a three bureau check and not a FICO, including the mortgage company. Secondly ALL three of my bureau scores are higher than my FICO, by a reasonable amount. Lastly I have paid off many of the things that are still seeming to be counted on my FICO that the bureau's are showing as paid. So now I am wondering why, would my FICO be so far off from the rest of my credit reporting? If anyone were to pull a FICO they would get a crappy report that pulling the independent reports would show much better. Doesn't FICO base it's information on the reports of the three? When I pulled the three from my free report the lowest score was a solid 100 point higher than the FICO I just got from here. Can anyone explain what's going on and why this may be? Also can you explain why I am reading that FICO is all that counts yet the lenders keep pulling full reports?

 

 Thank you

Moderator Emeritus
llecs
Posts: 32,880
Registered: ‎08-04-2007

Re: Credit Scoring 101 - START HERE!

[ Edited ]

JSizzle wrote:

Is it more effective in increasing your score to charging things to your credit card an paying the total amount off monthly or to charge under 10% of the card limit, carrying the balance and paying it over a few month period?

 

Thanks for your help! :smileyhappy:


FICO will only score what is on your CR at the time the score is generated. Credit cards generally report only once per month and they'll report the balance you had on the statement date. So, it doesn't matter if you don't use the card and it remains at 0% or if you max it out and pay in full before the statement generates your CC will still report $0. Likewise, it doesn't matter if you pay in full monthly or pay it over time, your score will remain the same once you get it to report $0 months from now vs. paying it in full monthly and comparing it then if that makes sense. In other words, there's no FICO benefit by paying the balance over time vs. paying it in full. ETA...again, it doesn't matter how much you charge; it matters what reports. I've charged up to 100% of my CL monthly but also have paid it off monthly so it reports $0.

 

For max points, get all CCs but one to report $0 and get the remaining to report a balance of under 9% of the CL. If you leave balances on your cards thinking that it will help your FICO in the long run it won't. FICO will ding you for the higher utilization and that ding will fade over time when you pay it down/off. Lenders also frown on carrying balances over long periods of time and can opt to cut your limit. So always be in the practice of paying it off if you can.

 

Moderator Emeritus
llecs
Posts: 32,880
Registered: ‎08-04-2007

Re: Credit Scoring 101 - START HERE!


marc76 wrote:

So I am new to the myFICO site and I have more questions now than ever. First thing is that each time I have gone for a loan they have always done a three bureau check and not a FICO, including the mortgage company. Secondly ALL three of my bureau scores are higher than my FICO, by a reasonable amount. Lastly I have paid off many of the things that are still seeming to be counted on my FICO that the bureau's are showing as paid. So now I am wondering why, would my FICO be so far off from the rest of my credit reporting? If anyone were to pull a FICO they would get a crappy report that pulling the independent reports would show much better. Doesn't FICO base it's information on the reports of the three? When I pulled the three from my free report the lowest score was a solid 100 point higher than the FICO I just got from here. Can anyone explain what's going on and why this may be? Also can you explain why I am reading that FICO is all that counts yet the lenders keep pulling full reports?

 

 Thank you


Welcome!

 

You are referring to a mortgage loan, right? Whenever you apply for a mortgage they will provide for you a tri-merge report (each from Experian, TransUnion, and Equifax) along with all three FICO scores (not just one). Based off the three they will use the middle score of the three as a basis for approval, PMI, rate, etc. If applying with a spouse, then they will pull all 6 scores between the two of you and choose the lower of the two middle scores as a basis for approval, etc.

 

The EQ (Equifax) FICO that your lender pulls will virtually always match your EQ FICO that you get from here if you pull both the same day. If you look at your tri-merge report, it might say something like "Beacon 5.0" which is the trade name to the most used EQ FICO. The EX (Experian) FICO that mortgage lenders most often use was the same EX FICO version that used be sold on here at one point in time. EX has since blocked consumer access to your own EX FICO a few years back. That version might be listed as "Fair Isaac Risk Score v2" or something similar in your mortgage docs. Finally the TU (TransUnion) FICO may or may not match your lender's score if compared the same day. While some lenders do use the very same TU FICO version as found on here, most mortgage lenders do not. You are more than likely to see something like "FICO Risk Score, Classic 04" or "Empirica 04" or similar by your lender. The version on here is an older TU FICO model.

 

If you are getting your scores from a 3rd party (other than your lender or FICO) or getting them from your 3 free annual reports from annualcreditreport.com, then know that you aren't getting FICO scores at all. When you get your free 3 reports each year they offer scores, but the scores offered aren't FICO scores. We call these non-FICO scores "FAKOs". If you look in their fine print with your purchase you'll find that the scores are "for educational purposes only" and that "lenders don't use them". Ignore these scores and advice.

 

Aside from scores, the report content comes directly from the credit reporting agencies themselves (TU and EQ only). When you purchase a report from here it has the latest data from TU and/or EQ and would match exactly if you pulled directly from the site themselves. If you pulled both on different dates then know that your report can change anytime. Your CCs and loans typically will update once per month so it's easy to see changes when pulling on different days. Bad accounts change all the time too.


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