@Anonymous wrote:Thanks for the reply...
But I am still a bit confuse. You have stated that Transunion and other credit bureaus are only education use, but why when lender do inquiry it show up in those 3 credit bureaus and the score has drop 10-30point instantly.
I had about 5 collection I had called and work with the agency and Paid in Full on most of them and some I did a settlement on it. But my score remain low. I have 3 account are open right now with my car loan, capital one credit card, secure loan with my bank all in good standing and paid on time and reported everymonths.
To try to clarify: even in the FICO models there's on the order of 50 different versions which are currently available for lenders' use. Of those I'd say 18 or so are in pretty regular use. The unfortunate bit is when you even buy a FICO score, it may not be the one that the lender is going to use, so in reality it's better off just to focus on the data in the report, as a pretty report will result in a pretty score, regardless of algorithm chosen.
There's also a whole slew of additional score models which have been developed, and some of those are educational in nature: namely, they're not sold for lender use, and therefore they won't be used in a lending decision. An unfortunate number of these second types are offered by Experian, and to a lesser extent Equifax and Transunion: of the 3, you can only get a legitimate FICO score from Equifax on their Score Power and Scorewatch products (Equifax Beacon 5.0), the rest is educational use with the exception of the VantageScores they may be offering through various interfaces: it's not FICO, but it is designed to compete with FICO and as such has some value as a lender-used score.
Your path towards score improvement is basically the same as most people's:
1) never be late, never pay less than the minimum, and never miss a payment
2) let time pass
3) see if you can get those paid collections removed via goodwill letters, check the rebuilding forum, some will play ball and some won't and the more derogatory information you have off the report, the better it will be.
That said, you do want to acquire 2 more credit cards for scoring purposes in the future, doesn't have to be done now though if your accounts were established recently (within the last few months) I'd go and get another secured card like BOFA's personally, might even do that anyway.
Otherwise you fall into my category where you're just waiting for things to fall off and waiting for positive history to keep aging. Most people can get to 680+ or really close to it within 2 years regardless of where they start from if they simply stop acquiring derogatories and have solid payment history after that... unfortunately just paying a collection doesn't typically improve your scores (and may hurt them in some cases we've heard about) but is worlds different from an underwriting perspective.
@Anonymous wrote:Thanks for the reply..
I am trying to understand how this works, sorry If I asked to much question I am just a bit confuse.
You guys always mentioned that the 3 credit bureau are FAKO and its for education only correct? Fico score are real score that lender goes bye correct? Now my question to you guys is why does it matter to many people out there if our credit card or loan report to the 3 credit bureaus if it fake or educational? If the 3 credit bureaus are not good to use the score and why does people care if they lender report to them? why not directly to Fico?
Where does FIco score get the score from other then the 3 credit bureau?
Ah, the bureaus are reference: they are the keepers of the data, and that doesn't change. Every algorithm whether we're talking FICO or FAKO has to be used against a data repository, and typically that will be one or multiple of the 3 CRA's: Experian, Equifax, Transunion.
What changes is the algorithm on the scoring: the 3-in-1 marketing the bureaus use, those are typically FAKO (educational) scores, because it's cheaper to do so than pay FICO the license fee. It calculates off the correct data, it just doesn't give you a score that's used by anyone else.