Credit age and Fico

[Varsity_Lu]

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@marillion wrote:Can you please explain the "fake loan" comment?

@Kforce already mentioned it, an SSL. You put $3,000 into an account, then immediately borrow $3,000 from the same bank for a 10 year term. You then withdraw the $3,000 you originally put in and use it to pay off $2,800 of the loan right away, leaving your loan balance at $200. That $200 gets paid off over the next 10 years. It's essentially just shuffling your own money around, but the bank structures it to look like a real loan that you are paying off over 10 years. You don't  actually borrow money, but it looks like you do on your credit report. This product is only for those of us who don't have any real loans (car, mortgage, etc). Currently I am loosing about 30 points for only having credit cards. Essentially the highest FICO score I can get is 820 unless I get a loan of some sort. This is why we call them fake loans.

[marillion]

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@Varsity_Lu wrote:

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@marillion wrote:Can you please explain the "fake loan" comment?

@Kforce already mentioned it, an SSL. You put $3,000 into an account, then immediately borrow $3,000 from the same bank for a 10 year term. You then withdraw the $3,000 you originally put in and use it to pay off $2,800 of the loan right away, leaving your loan balance at $200. That $200 gets paid off over the next 10 years. It's essentially just shuffling your own money around, but the bank structures it to look like a real loan that you are paying off over 10 years. You don't  actually borrow money, but it looks like you do on your credit report. This product is only for those of us who don't have any real loans (car, mortgage, etc). Currently I am loosing about 30 points for only having credit cards. Essentially the highest FICO score I can get is 820 unless I get a loan of some sort. This is why we call them fake loans.

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I might need one of those once everything in my credit report "resets" next month, because the two "loans" I have right now don't show up on my FICO credit at all. One is eBay Seller Capital which is a straight fee on the loan amount and then leveraged as a percentage of my sales there...and the other is from Lending Point, which I get charged interest on and have a monthly payment for yet inexplicably isn't reported to any of the 3 credit bureaus. I don't have a car loan (won't ever need one) nor do I have a mortgage (won't ever need one).

[Varsity_Lu]

@marillion 

Here is a thread you'll want to read for more details:  Successful PenFed SSL Loan 

[Patient957]

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@marillion wrote:

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@Patient957 wrote:

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@Varsity_Lu wrote:

I dont use annual credit report.com. I get my reports directly from the bureau or from MF, AmEx, CreditWise, etc.

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Reports from annualcreditreport.com do come directly from the bureaus.  Except the ACR dot com reports are more complete than the ones you can get elsewhere, even more complete than what you can get if you start from the bureau's own website.

What you get if you go to experian.com, for example, is what Expirian chooses to give you.  What you get from ACR dot com is what the bureaus are required by law to give you.

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What about the report from myFICO?

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The report from MyFico is fine, but it's not complete and it's Fico-centric.

For example: (1) You won't find your soft inquiries on the MF credit report; (2) You also won't find hard inquiries older than 1 year.  Why?  Because Fico scores don't count inquiries older than 1 year, even though they remain on your credit report for 2 years.  So MF just omits them altogether from their version of your credit report.

This is why people in the know on this board recommend annualcreditreport.com.  We're not just shilling for a random website.

[Varsity_Lu]

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@Patient957 wrote:The report from MyFico is fine, but it's not complete and it's Fico-centric.

For example: (1) You won't find your soft inquiries on the MF credit report; (2) You also won't find hard inquiries older than 1 year.  Why?  Because Fico scores don't count inquiries older than 1 year, even though they remain on your credit report for 2 years.  So MF just omits them altogether from their version of your credit report.This is why people in the know on this board recommend annualcreditreport.com.  We're not just shilling for a random website.

Well, inqs that are more than a year old and soft inq are irrelevant to anything other than VantageScore and giggles. Sure, your full report may have other things there, but that data is superfluous. (my 20 previous addresses, 15 variations of my name, etc.) MF, Experian, AmEx, CreditWise, etc. all provide the essential, critical data that you actually need, even if it is technically incomplete.

[Thomas_Thumb]

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@marillion wrote:

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@Varsity_Lu wrote:

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@marillion wrote:Can you please explain the "fake loan" comment?

@Kforce already mentioned it, an SSL. You put $3,000 into an account, then immediately borrow $3,000 from the same bank for a 10 year term. This product is only for those of us who don't have any real loans (car, mortgage, etc). Currently I am losing about 30 points for only having credit cards. Essentially the highest FICO score I can get is 820 unless I get a loan of some sort. This is why we call them fake loans.

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I might need one of those once everything in my credit report "resets" next month, because the two "loans" I have right now don't show up on my FICO credit at all. One is eBay Seller Capital which is a straight fee on the loan amount and then leveraged as a percentage of my sales there...and the other is from Lending Point, which I get charged interest on and have a monthly payment for yet inexplicably isn't reported to any of the 3 credit bureaus. I don't have a car loan (won't ever need one) nor do I have a mortgage (won't ever need one).

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It is useful to have a loan on file open or closed. Both are considered the same from a credit mix perspective. Fico 8/9 and likely 10 will bump score for an open loan but, that is not mix related.

You should get copies of your official credit reports. Then you will get a full picture of all your accounts and how they are reporting. 

BTW - it is not necessary to have an open loan on file for top tier scores. My Fico 8 EQ and TU scores fluctuate 835-845 and Fico 8/9 EX 845-850 with no open loans and just one closed loan on file (since 12/2020).

The fluctuations are mainly due to allowing all cards to report balances without progress payments to lower statement totals. 

[marillion]

So if I have 5 loans on my report that are closed and date back to 2016 then I wouldn't even need an open loan?

[Thomas_Thumb]

The QTY is not important. The presence of atleast one on file is what counts most. 

Typically loans remain on file for 10 years from date of close but could come off earlier.

My loan that closed 11/2020 will supposedly fall off in 2030. Before that time I might purchase something using Affirm's 0% interest, 4 installment payment plan just to get one or two fresh loans on file. They use SPs for these loans. Since they are not revolving accounts, the new account impact on my score should be minimal.

Let us know if and how each of your loans are reporting on each CRA report including close dates. Are the listed ones classified as installment loans?

A SSL can be a better option due to its 10 year open status vs 8 weeks for an Affirm 4. However, I don't care about having prolonged open status for score boosting and don't need the added complexity. 

[Patient957]

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@Varsity_Lu wrote:

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@Patient957 wrote:The report from MyFico is fine, but it's not complete and it's Fico-centric.

For example: (1) You won't find your soft inquiries on the MF credit report; (2) You also won't find hard inquiries older than 1 year.  Why?  Because Fico scores don't count inquiries older than 1 year, even though they remain on your credit report for 2 years.  So MF just omits them altogether from their version of your credit report.This is why people in the know on this board recommend annualcreditreport.com.  We're not just shilling for a random website.

Well, inqs that are more than a year old and soft inq are irrelevant to anything other than VantageScore and giggles.

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And potentially underwriting.  The banks see them all.  Plus VS4 is becoming more relevant, especially for mortgages.

From time to time, I find myself wanting to know about the soft pulls.

But I agree that for day to day purposes the others work fine.  But people should know the difference.

[Varsity_Lu]

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@Patient957 wrote:

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@Varsity_Lu wrote:Well, inqs that are more than a year old and soft inq are irrelevant to anything other than VantageScore and giggles.

 And potentially underwriting.  The banks see them all.  Plus VS4 is becoming more relevant, especially for mortgages.

From time to time, I find myself wanting to know about the soft pulls.

But I agree that for day to day purposes the others work fine.  But people should know the difference.

Ok, I see your point. I don't do loans, so maybe that's why I have less cares to give about the minutia. Just give me the nitty gritty.