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Experian headscratcher - Understanding Your Score

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manzanita
Contributor

Experian headscratcher - Understanding Your Score

Hi everyone -

 

This forum helped me get my credit in order and now I'm working on my husbands. He has a pretty thin file due to a BK in 2005, after which he really didnt try to obtain much credit. I've asked general questions about a strategy for him before, but i think the questions were too broad. So here's a specific issue:

 

When Experian became available a couple weeks ago, I pulled his report and it gave the following reasons in the "Understanding your score" section.

 

1-You have a public record or collection on your credit report. (BK, can't wait till 2015)

 

2-You have few accounts that are in good standing.

Your FICO score considers the number of accounts where you are paying your bills as agreed - in your case this number is too low. This is because you have very few accounts or because you've missed payments recently on some of your accounts. (He had only 3 CC accounts: one closed 0 bal, one with a limit of 300 with 100 bal , and one AU on a 4k CL with a 500 bal. One student loan acct. Most recent lates around 18 mos ago, on SL.)

 

3- You've made heavy use  of your available credit (See above for breakdown on Util)

 

4-The remaining balance on your non-mortgage installment loans is too high. (student loan)

 

Steps I took: -
-Transferred his balances to a card of mine with a 0% intro transfer APR.
-Added him as an AU on my Citicard with a CL of 2500.
-CL increase on the 4k card to 5500 (bal now 0).
-Added him as an AU on my Amex PRG.

The Citicard does have a balance right now because we used it for some renovations, but it is the only card -other than Amex, which we use like cash and PIF - that is reporting a balance. So, of his total available credit -8300- his usage is 1400. I know its not the ideal 10%, but it is all on one card.
After I knew that the new cards had posted and that the old cards with balances were reporting as 0, I pulled his score again.  New score is 655. I expected a drop due to the AAoA (score watch posted a 6 point drop on Equifax, so this seems to track, but Scorewatch doesnt seem to have caught on to the new 0 balances or they arent making much of a difference)

 

Here's the new rundown of what's hurting his score:You have a public record or collection on your credit report.

 1- You have a public record on your report

 

  2- There is no recent activity on your revolving accounts  (???)

Your credit report shows no open revolving accounts [?] or it does not report recent information (such as balance or credit limit) about any of your revolving accounts. Your FICO score evaluates your mix of credit cards, installment loans and mortgages. People who demonstrate responsible use of different types of credit are generally less risky to lenders.

  1. What to do about this: You might want to show new activity on any credit card. If you already have a credit card, you can do this by using it and paying it back on time. If you don't have a credit card, consider opening one. However, be aware that the credit inquiry associated with applying for a new card may lower your FICO score in the short term.

3- You have few accounts that are in good standing

4-The remaining balances on your non-mortgage installment loans are too high.

 

So...I cannot make any sense of reason #2. ALL of his revolving accounts have recent activity, both with recent charges and payments and all are reporting with June or May data. Is this some kind of error? I've never seen this before. Any thoughts?  Reason number three is now having less of an impact than on the previous report, so that's good. Again, he does have some serious lates but only one account reports as a "negative indicator." Every other account is in good standing. Does he need more TL's? I've asked about this before and those that chimed in thought he had a good mix (Now at 3 revolving, one charge, 1 student loan). I'd like to get him his own cards at some point so he's not getting most of his available credit as an AU. The only card that belongs to him has a CL of 300, a Cap 1 starter card from 2007. Oldest card, and Cap 1 won't raise the limit.

 

Any thoughts on this would be helpful! What would be your next steps? (baddies are on the student loan, so I don't have high hopes for removal. I think we just have to move forward from here.) Just some straight up gardening? That's what I'm doing for myself, but I'd like him to get his own credit at some point.

 

As always, thanks for your help!

Amex PRG - NPSL // Amex Delta Gold- 2000 // Amex SPG - 5400 // Cap 1 Platinum - 1300 // Citi Dividend - 5000 // Discover It - 10,000 // Barclay Arrival - 4000 // WestElm - 7000 // J.Crew - 1100

Gardening as of 8/16/13
Message 1 of 4
3 REPLIES 3
DaBears
Senior Contributor

Re: Experian headscratcher - Understanding Your Score

Have the new cards you added him to showing a payment history on his credit report? BK has no affect on his scoring right now. Only affects it for 4 yrs. Student loans which are installment loans only account for 10% Fico scoring.

Message 2 of 4
manzanita
Contributor

Re: Experian headscratcher - Understanding Your Score

Yes, the cards all show history -except for Amex, which is just showing as a balance, no payment history yet. The explanation was "Your credit report shows no open revolving accounts [?] or it does not report recent information (such as balance or credit limit) about any of your revolving accounts." And neither of those statements are true for his report...so I'm a little baffled.

 

Can you clarify what you are saying about the bankruptcy only having an effect for 4 years? I am surprised by that - am I missing something? I thought major derogatories like CO's, CA's and 180+ day lates can have an effect for years and years (and that has been my experience), so I'm surprised to hear that a BK only affects the score for 4 years? I also thought that the order of "Things Hurting Your Score" is by weight/effect.  On all of his scores the BK has always been #1. It's also the first reason listed in CC rejection letters (though that was a couple of years ago..he has 0 inqs right now.) I'm not disagreeing with you - I'm just surprised and wondering if I am misunderstanding something.

Amex PRG - NPSL // Amex Delta Gold- 2000 // Amex SPG - 5400 // Cap 1 Platinum - 1300 // Citi Dividend - 5000 // Discover It - 10,000 // Barclay Arrival - 4000 // WestElm - 7000 // J.Crew - 1100

Gardening as of 8/16/13
Message 3 of 4
DaBears
Senior Contributor

Re: Experian headscratcher - Understanding Your Score

I was on the phone with myFICO one day for something I asked how much is my chapter 7 BK hurting my score? She said it is really not affecting your score right now being almost 10 yrs old and that after 4 yrs it doesn't impact your score much (dropping off in March 13') I was like sweet. I just applied for a GE Care Credit account last week for $6000 What was hurting my scores was the Charge-Off's, creditors don't like to see CO's. 

 

I also just paid all my unpaid debt off including my 2 charge off's. I had a 4 yr old C/O with GE Care Credit that I just paid them in full cause they were able to recall the account from the CA. In return she removed the charge-off status and all lates and late charges so the account can be listed as a positive TL on my report for the next 10 yrs. 

Message 4 of 4
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