First some background info. I have always had good credit. I always pay my bills on or ahead of time. When I applied for my current truck lease in '07 I had a 760 beacon score.
In late '08 my son had a medical procedure in which our insurance did not entirely cover. We were billed by several of the involved parties Doctor, Hospital etc... which we paid over time until they were paid off. One bill however ended up going to collections due to the fact that we did not receive a bill for several months. I know it's ultimately our fault for not making sure it was paid off but it is what it is at this point I guess. I was unaware that this bill of $330 is still outstanding until 2 weeks ago when I went to lease a New Honda Accord. We had not received a bill or any communication since mid '09. My wife swears she paid the bill off and the original doctor (anesthesiologist) says they show a zero balance for out account but the collections agency says it's not paid. I don't entirely understand at this point. Did the collection agency buy the debt from the anesthesiologist? We have an invoice showing something about a collections then 2 more payments from us after that. At the bottom of the page it shows 0. One way or the other I will get it straightened out. But I digress.
The whole point of this post is to get my Beacon score to 710. According to the Equifax report pulled at the Honda dealership on the 16th of May ( 2 weeks ago ) it was 706. The dealer states that Honda credit requires a minimum Beacon of 710 to qualify for their "preferred" credit and that they won't budge from that. My wife works for another dealership owned by the same company so I have no reason to disbelieve what he says. My wife and the new car manager are friends. He says they use Equifax exclusively. I don't know if that means all Honda stores use Equifax exclusively now or just the ones in this region (Tampa Bay area). At my request he also pulled my report from Experion which scored me at 716. He contacted Honda credit with that but they still wouldn't budge.
Since this visit to the Honda dealer 2 weeks ago I have filed a dispute with Equifax regarding the medical collection and spent numerous hours on the phone trying to get it taken care of. I'm very frustrated at this point with the whole process.
My wife and I decided and hopefully wisely that the best plan of attack to increase my score (a measly 4 points!) was to pay off my current lease, which we did (2 payments) and pay off a $400 balance on a credit card we have. So we did both. I also decided tonight that I should sign up for "Score Watch" through Equifax. My reasoning being that I would know when my score reached 710. However upon signing up and getting my score it was only 674! According to the report as of tonight it does not show the lease at a 0 balance nor the CC at a 0 balance. Apparently they have not updated yet.
I now know after the fact that Equifax gives you a FICO (FAKO) and not Beacon or "Auto Finance" Beacon score which has no monitoring methods. I called and spoke with someone at Equifax who was unable to tell me how I could correlate my FICO with the auto Beacon. So the monitoring I paid for is pretty useless I guess? I mean it could go up but I would have no idea at what point my Auto Beacon would be at or above 710 in relation to the FICO. This is so frustrating! I suppose it wouldn't be that big of a deal but the difference in the 4 points is $30/mo. in the payment or $1080 over the length of the lease. I don't know about you but I'm not will to give away a grand being that close to the cut off. I don't have to turn in my current lease until the end of July so I have almost 2 months to try and get my score up to 710. I'm out of ideas at this point and could really use some guidance. The way I see it is that the only way I will know what I score for the auto beacon is to have them run it again at the dealership. I just don't know if paying off the current lease and CC will make a 4 point difference or not and if so when will that reflect on my score?
Thanks for reading my ramblings. If you have any ideas I'd be grateful to hear them.
I would think that signing up for Score Watch at least allows you to know when the updated trade lines for the lease and credit card payments hit Experian. Without it you would be in the dark, right? So it may prove to be more valuable than what you are thinking.
Also, when the updated trade lines hit your report, you may see a bump in your score. If so, there may be similar movement on your auto score. That would seem to be the optimal time to roll the dice and have the dealership pull a new report. It's a crap shoot but what other approach would one take?
I highly agree that you should pay that balance on the credit card i believe revolving accounts, count 35% of your score. So whenever that updates to a zero balance expect to see nice bump in your score. Is this the only credit card with a balance? Paying the lease off early wont help you much.
No the CC balanced we paid off is not the only one that has a balance. I'm sure that's one of the major factors in my score but there's no possibility that we could get that one paid off this year let alone in 2 months.
Here's a funny thing.. paying off your credit cards and showing a balance of zero, doesn't necessarily mean your credit score goes up.. I paid off a credit card to show a total revolving balance on my equifax report of 0. My scored dropped 2 points!