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Moderator Emeritus
Posts: 6,182
Registered: ‎03-29-2007
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Re: Credit Scoring 101 - START HERE!



smallfry wrote:


Tuscani wrote:


jaxsk8mom wrote:
I need to know which scenario will raise a FICO score higher/quicker: 1. Sell vehicle and pay off car loan (4 payments remaining). Loan will showing as paid off which is less debt owed, but there will be no more "on time payments" history on this account. 2. Keep vehicle while continuing to make payments on time.

Probably wont make much (if any) of a difference.


Message Edited by Tuscani on 08-21-2007 03:53 PM


Can you point me towards where it states by FICO that a paid installment (car loan) doesn't count towards your mix of credit? It would seem that having a paid for car loan would count as long as it appears on your reports.

I didn't say mix doesn't count. My reply was specific to util and paying of the balance.
Member
Posts: 6
Registered: ‎08-30-2007
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Re: Credit Scoring 101 - START HERE!

I'd like to know this too. Will paying off 2-3 year old collection accounts that total less than $1000 have any significant on my FICO? In other words, Is a paid collection account any better than an unpaid collection account if the amount owed is a small percentage of total debt?
Member
Posts: 8
Registered: ‎03-08-2007
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Re: Credit Scoring 101 - START HERE!

I recently took out a home equity line of credit on my primary residence, in addition to my regular mortgage. This HELOC is 100% utilized because I bought a small condo (second home). My Transunion credit report reflects this HELOC as a mortgage and therefore (presumably) doesn't affect my credit score. But Equifax and Experian reflect this HELOC as a revolving line of credit and this bumps my total utilization of revolving credit way high.Net result, my Equifax and Experian scores are substantially lower than Transunion. Do these CRA's have different policies regarding classification of HELOCS and would I be justified in asking Equifax and Experian to adjust their Reports to show the HELOC as a mortgage. Otherwise, my scores will take a hit for years because I plan to pay off the HELOC over a 10 year period.
Valued Member
Posts: 32
Registered: ‎09-04-2007
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Re: Credit Scoring 101 - START HERE!

Hi, I have a question regarding debt pay-off order and its affect on my credit score: 
 
I have the opportunity to pay off ~10 K in debt in the next few months.  As I'm looking to purchase a home in February, I was wondering which of the following options would give me a bigger boost in my credit score (or if it won't matter).  Assume the following:  I have 10K on a car loan (7.4% interest) and 10K on a credit card (0% interest, this particular card is very nearly maxed out).  My score is currently ~720 depending on the reporting agency.  By my estimates, with this balance I'm still under 30% of my total revolving credit limit ratio.
 
Initial base logic dictates to pay off the car loan, as I will save ~$1500 in interest.  However, since one is an installment account, and the other revolving, does it make a difference as far as the credit score?  Will having one card nearly maxed out affect my score significantly if the overall ratio is under 30%?   
 
Or, are any changes to my score going to be so minscule that should I just say to heck with both of them and put the money towards the down payment?
 
 
Moderator Emeritus
Posts: 6,182
Registered: ‎03-29-2007

Re: Credit Scoring 101 - START HERE!



smlala wrote:
Hi, I have a question regarding debt pay-off order and its affect on my credit score: 
 
I have the opportunity to pay off ~10 K in debt in the next few months.  As I'm looking to purchase a home in February, I was wondering which of the following options would give me a bigger boost in my credit score (or if it won't matter).  Assume the following:  I have 10K on a car loan (7.4% interest) and 10K on a credit card (0% interest, this particular card is very nearly maxed out).  My score is currently ~720 depending on the reporting agency.  By my estimates, with this balance I'm still under 30% of my total revolving credit limit ratio.
 
Initial base logic dictates to pay off the car loan, as I will save ~$1500 in interest.  However, since one is an installment account, and the other revolving, does it make a difference as far as the credit score?  Will having one card nearly maxed out affect my score significantly if the overall ratio is under 30%?   
 
Or, are any changes to my score going to be so minscule that should I just say to heck with both of them and put the money towards the down payment?
 
 


You must first ask yourself.. what is more important, saving money or higher scores?
 

 
Contributor
Posts: 95
Registered: ‎06-12-2007
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Re: Credit Scoring 101 - START HERE!

Indeed. A 720 score will already land you good offers on a mortgage. You will probably reap more benefits from putting the 10K towards your downpayment. (0.3% lower interest on a mortgage gives a~$15 lower monthly payment on 100K for 30Y. Putting 10K down minimizes PMI, and reduces your monthly payment for the 90K loan by ~$45)
New Member
Posts: 4
Registered: ‎05-27-2007
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Re: Credit Scoring 101 - START HERE!

I , too, am in similar situation. I have several cards with "free interest" that I have ran up. I have scores of 684,684 and 683. I need to get to 700 for a better mortgage rate. I am at 74% usage which is high.I could pay a few thousands to get me at around 50%. Anyone know how these percentages work. At 74%, im at "not good" while I am listed "very good" in other areas,I hate to pay off so much,as I give up all that cash, especially since I have "free interest" until 2/2008.Everyone says high achievers should be at 7 to 10%, but thats not easy to do.If I get at below 50%, should that change to "good", or doesnt anyone have any figures on each incremental breakdown on credit usage. Obviously 0 to 10% is excellant, but then what are the breakdown after that. Thanks!
New Visitor
Posts: 1
Registered: ‎09-10-2007
0

Re: Credit Scoring 101 - START HERE!

I recently received my Experian FICO credit score. It was 699. Mainly because of a recent collection, that was not mine. I immediatelky disputed it, and it was removed by Experian. But I can't run Score Simulator or anything to see what my new Experian FICO is, and I don''t want to have to pay for it again. Any suggestions?
Established Member
Posts: 15
Registered: ‎09-07-2007
0

Re: Credit Scoring 101 - START HERE!

Is Equifax the only CRA on Score Watch?  I purchased the other 2.  How can I get notified of any changes to FICO score?
Moderator Emeritus
Posts: 6,182
Registered: ‎03-29-2007
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Re: Credit Scoring 101 - START HERE!



Red14 wrote:
Is Equifax the only CRA on Score Watch?  I purchased the other 2.  How can I get notified of any changes to FICO score?


SW is EQ only.
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