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From what I've learned here, and I'm not 100%, but I think being in a dirty file, the new account penalty might be overlooking me.
Maybe one day the onslaught of goodwill letters I send out and email weekly for my 3 paid CO's will come thru. 1/2023 seems like a long time. Lol
@Dmessina666 You are correct there is no new account penalty on a dirty card; you just suffer the change in ages. Plus the inquiries of course.
@K-in-Boston wrote:For open loans on my reports, I have mortgage refinanced 4.5 years ago and student loans refinanced a few months ago so both are high % but only about $2k a month. We bought at the bottom of the housing market and paid a decent chunk off before refinancing, so loan amounts really shouldn't matter. While the loan balance is high, the loan-to-value is only about 40%.
Not only is this score blind to income and therefore cannot determine DTI as a point of resiliency, but it's also blind to loan-to-value or outright ownership. If it's using raw dollar amounts, that's also quite subjective. I mean $2000 to the average citizen living in Boston, NYC, or San Francisco is quite different than $2000 for the average citizen living in say a rural area of the Gulf states.
This algorithm looks at raw $ amounts in terms of aggregate monthly payments. That negatively impacted my score according to the reason statements provided. My mortgage B/L ratio was under 5% when I pulled my score so that was not the issue.
My monthly payment was $1830. Another poster with an aggregate monthly installment payment of $ 1720 (if I recall correctly) did not have installment payments listed as a negative. Perhaps monthly payments above $1750 or $1800 is a threshold of some type.
Jumbo loans are considered a higher risk than standard conforming loans. Jumbos typically carry higher interest rates as a result. Outstanding loan balances in $ could be looked at by the model in addition to B/L ratio.
@Dmessina666 wrote:From what I've learned here, and I'm not 100%, but I think being in a dirty file, the new account penalty might be overlooking me.
Maybe one day the onslaught of goodwill letters I send out and email weekly for my 3 paid CO's will come thru. 1/2023 seems like a long time. Lol
I feel your pain - I've got 5, and they're not coming off until 2024 unless my GW letters have any effect
@Anonymous wrote:My guess is that income/DTI is irrelevant since it seems one of the ideas of this score stemming from the Covid era is that someone can lose their job at any given moment. That being said, looking at payment obligations and weighing them accordingly definitely makes sense if whatever income stream is suddenly cut off due to job loss.
$3000/mo in loan payments against a $70k income verses a $150k income is one thing, but against $0 income which I'm sure the score takes into consideration is a different story.
Income and DTI are not in a credit report, and cannot be used for figuring any credit score by law. It can weigh heavily on being approved for a loan or credit card however. That is why you can have 850 credit scores and still be declined for a loan based on income or DTI. It is also why most all applications ask for income. Income just can't affect credit scores because having low income does not mean you handle debt poorly, and being wealthy does not mean you will handle debt well either. Income was dis-allowed by law for scores because it is discriminatory. It is used for lending decisions however, just not reports or scores.
Here is mine (49) and DH's (72):
@Anonymous wrote:
Interesting so it’s looking at balance and monthly obligation as we suspected.
I owe $5500 (~18% aggregate) in revolving, monthly payments are $228, car is $710, take home pay is ~ $4100 /mo net.
Still not seeing how I'm such a high risk.
@Brian_Earl_Spilner wrote:
@Anonymous wrote:
Interesting so it’s looking at balance and monthly obligation as we suspected.I owe $5500 (~18% aggregate) in revolving, monthly payments are $228, car is $710, take home pay is ~ $4100 /mo net.
Still not seeing how I'm such a high risk.
Yeah, I was surprised to see the flag for high revolving balances. Mine is only ~$2500 - which is 8% of my reporting CL (I say reporting becuase I have another $18K that hasn't hit yet).