How Do I Achieve FICO Scores Of 840+

[smallfry]

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@Anonymous wrote:

Thank you for your reply.  Experian told me point blank that it was NOT Vantage.  The form had no qualifiers.  However, further research leads me to believe the 882 is a "bankcard enhanced" FICO, which would have a range of 250 to 900.  I went ahead and paid for my "real" FICO, and it came up at 793.

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Right you are. The scores we pay for here aren't used by too many lenders. They are a better guide than FAKO's. Maybe. 

[Anonymous]

Henrietta,

My credit history is under 19 years old, so it can't be a 30-year thing.  I believe it has more to do with timing.  For instance, Experian dinged me last year for having no recent installment accounts.  I am not a homeowner, I paid off my college loans in 2003 and both of my cars were paid off over 7 years ago.  I took out a small car loan last year just to boost my scores.  Experian dropped my score by 15 points due to the new loan, while TU raised my score by 39 points.  With the loan almost paid off, EX raised my score 97 points while EQ raised it only 39 points, citing the new account as having kept my score down.  Once the loan is paid off in 2 months, what will happen?  I will no longer have an installment loan, since I will have paid it off.  Will EX ding me again for not having any installment accounts?  Will EQ raise my score since the account will be older?

Also, I do use my credit cards for everything to get airline mileage, but I pay them off every month.  Depending on when you pull my report, I might have $4k in balances, or almost none.  I think that difference could be 20+ points, just by when my payments get posted vs. when the scores get pulled.  So, you're score could likely fluctuate above 840 during the month, you just might not have caught it on the right day.

I'm envious that all three of your scores are over 800!  With EX leaving, I will never get to see three side-by-side scores over 800.

[Anonymous]

To clarify one point: I'm not stating that you must have a 30 year credit history in order to attain an 840+ EX FICO score.  Rather, there is a possibility of a score bump at 30 years.  I have no mortgage or installment loans on my credit reports.  My score increased when my credit history turned 30. 

I apologize if my previous post was ambiguous.

[Junejer]

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smallfry wrote:

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@Anonymous wrote:

Thank you for your reply.  Experian told me point blank that it was NOT Vantage.  The form had no qualifiers.  However, further research leads me to believe the 882 is a "bankcard enhanced" FICO, which would have a range of 250 to 900.  I went ahead and paid for my "real" FICO, and it came up at 793.

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Right you are. The scores we pay for here aren't used by too many lenders. They are a better guide than FAKO's. Maybe. 

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Huh? What do you mean? The scores we pay for here are exactly what most lenders use.

[Anonymous]

Hi Henrietta23!

My scores probably change just as much as yours.  We both have relatively stable FICO scores.  I'm finally learning to appreciate having scores that "don't move."   Not being able to check my EX FICOs anymore, I like knowing that my score will more than likely remain unchanged for a long period of time--I'll always have a good idea of what my EX score might be.

I have no installment loans or mortgages showing on my credit reports.  I like knowing that I won't have to worry about a possible score drop if I payoff an auto loan or mortgage--my score isn't dependent on these types of credit.

Unchanging scores can be wonderful, Henrietta23!  It took me a long time to realize that!

[Anonymous]

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@Anonymous wrote:

I have 2 major credit cards which I use only for financial recordkeeping and no store accounts. I have not had any installment debt for over 20 years. My mortgage was paid off in 1994. I have paid my credit card balances in full every month for over 20 years. With all that my most recent score was 805.

I get gigged because I have month end balances. How can I not have balances when I charge everything on my credit card which closes off on the 13th of every month and I pay it almost immediately. However, I still charge items between the 13th and month end.

It seems to me that the FICO scoring model is severely flawed in this context.

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To get a better score boost you need to make sure that your balances on your credit cards are greater than 0% and no more than 9% util both combined and individual.  If you go over that 9% or have 0 balances reporting on your CC's you will get dinged, since you only have 2 credit cards, you probably also want to have only one of the two cards report a balance.  

So to prevent that you need to pay your credit cards down prior to the balance reporting.  Most credit cards report the balances on the statement date.  So if your statement is the 13th and they report the balance on the 13th, you would need to pay the card down, or off depending on which one you want to report, prior to the 13th.  

I don't necessarily think this is a FICO scoring flaw, as it's the CCC's that determine when they report to the CRA's, and they have to report at some point.  There's no way for the FICO scoring to know if you PIF every month, or if you're carrying a lot of debt from month to month, especially if you're using your cards for every day purchases and you always have a balance.  It's just a snapshot of your current balances.  If on that snapshot you have 75% util it's going to look like a lot to the scoring, regardless of if you PIF or not.

And 805 is a great score, so even if you're getting dinged, you're still in the top tier for everything.

[Anonymous]

Thanks for your response. The problem is that the reported balances are the month end amounts, not the 13th statement date amounts. Both cards offer rewards which are rather substantial so that I do use both. I pay the full amounts before month end but my charges between the 13th and month end can be large. I think it would be practical for FICO to collect data with respect to interest paid. I have never paid interest so, by definition, I have paid in full each month. I know 805 is great but it's irksome to be told you are not quite up to par when you pay everything in full, month after month, for many, many years. I was even advised on one of the credit reports that my score could improve if I had a mortgage balance. However, right on the report was my old mortgage account showing that it had been fully paid. Great score or not, I once was charged a slightly higher home insurance premium because my score was not quite the best.

I maintain that FICO should be able to recognize when accounts are paid in full each month. Not doing so is a flaw in the system. 

[Anonymous]

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@Anonymous wrote:
There's no way for the FICO scoring to know if you PIF every month, or if you're carrying a lot of debt from month to month, especially if you're using your cards for every day purchases and you always have a balance.  It's just a snapshot of your current balances.

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I know that it is handled this way, but I don't think it's true that there is no theoretical way to distinguish between PIF and carrying a balance, as the reports usually list your last payment. The ding you get might be a nod to the fact that the ccc makes less money of people who only pay at the due date, compared to those who pay nearly everything before the statement cuts.

[Junejer]

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Ulan wrote:

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@Anonymous wrote:
There's no way for the FICO scoring to know if you PIF every month, or if you're carrying a lot of debt from month to month, especially if you're using your cards for every day purchases and you always have a balance.  It's just a snapshot of your current balances.

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I know that it is handled this way, but I don't think it's true that there is no theoretical way to distinguish between PIF and carrying a balance, as the reports usually list your last payment. The ding you get might be a nod to the fact that the ccc makes less money of people who only pay at the due date, compared to those who pay nearly everything before the statement cuts.

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Lenders can distinguish, if they bothered to analyze the report, but FICO scoring doesn't/can't distinguish between a PIFer and a balance carrier, if a balance reports monthly.

[MattH]

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@Junejer wrote:

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@Anonymous wrote:

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@Anonymous wrote:
There's no way for the FICO scoring to know if you PIF every month, or if you're carrying a lot of debt from month to month, especially if you're using your cards for every day purchases and you always have a balance.  It's just a snapshot of your current balances.

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I know that it is handled this way, but I don't think it's true that there is no theoretical way to distinguish between PIF and carrying a balance, as the reports usually list your last payment. The ding you get might be a nod to the fact that the ccc makes less money of people who only pay at the due date, compared to those who pay nearly everything before the statement cuts.

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Lenders can distinguish, if they bothered to analyze the report, but FICO scoring doesn't/can't distinguish between a PIFer and a balance carrier, if a balance reports monthly.

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While I agree this is highly illogical (I think the best fix would be a rule specifying a CC company must report the balance the day after the due date instead of on statement day), I also think PIFers agonize too much about this.  I expect the vast majority of us PIFers (1) have some savings, (2) rarely apply for new credit, (3) have FICO scores over 760 anyway and (4) plan most of our new applications well in advance.  So when we anticipate applying for a loan, we can simply begin making extra payments on our CCs for a few months beforehand to keep the reported balances down.  Note: the reason I say "for a few months" is because some CCCs are slow to update reported balances.

Unless one is applying for something, a few points on the FICO score are nothing more or less than ego-boosters. I myself am guilty of this, I have no practical need to pull my FICO scores but still I do...