WHY IS MY FICO SCORE SO LOW?

[Anonymous]

I received a FICO score of 655 ( NOT GOOD) and the reason as stated was:

" Your credit report shows no recent non-mortgage loans (such as auto or student loans) or sufficient recent information about your loans. Having a loan along with other types of credit demonstrates that you are able to manage a variety of credit types. "

This is not true because I have had my first auto loan in 2008 and I paid for my first car every month on time until the whole balanced was paid off. Immediately after I financed another car and I paid another loan always on time never late and I have just finishd paying off that second car as well.

HOW in the hell does this not prove that I am able to pay off my bills on time? and how is this not a recent auto loan? I have no other derogatory items on my credit report. There's no phone number to call anyone or seek help. Can someone, anyone please help me? this is sadastic. you have people entering information about us that's inaccurate  hiding behind walls and we cannot even call them to get these very important life changing issues resolved? HELP! these loans appear in my credit reports. But not FICO? and is that really worth bringing down the score this much??? 

[Anonymous]

Did your auto loans report to the same credi reporting agency that the 655 score was pulled from?

[Anonymous]

Yes, It is all there. I just went through both my reports. However it shows both loans as "possible negative" which I have sent a despute for. loans paid on time and in full should not be considered that... are they just misclassifying stuff?

They also put my No limit American express as a possible negative. Makes no sense. These items are all proof of me being excellent with my credit.

[Anonymous]

When you say "both" reports, do you mean two of the three (Experian, Equifax, Transunion)? Where are you getting your scores from? I've not encountered the "possible negative"verbiage before.

[CH-7-Mission-Accomplished]

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@Anonymous wrote:

I received a FICO score of 655 ( NOT GOOD) and the reason as stated was:

" Your credit report shows no recent non-mortgage loans (such as auto or student loans) or sufficient recent information about your loans. Having a loan along with other types of credit demonstrates that you are able to manage a variety of credit types. "

This is not true because I have had my first auto loan in 2008 and I paid for my first car every month on time until the whole balanced was paid off. Immediately after I financed another car and I paid another loan always on time never late and I have just finishd paying off that second car as well.

HOW in the hell does this not prove that I am able to pay off my bills on time? and how is this not a recent auto loan? I have no other derogatory items on my credit report. There's no phone number to call anyone or seek help. Can someone, anyone please help me? this is sadastic. you have people entering information about us that's inaccurate  hiding behind walls and we cannot even call them to get these very important life changing issues resolved? HELP! these loans appear in my credit reports. But not FICO? and is that really worth bringing down the score this much??? 

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FICO only considers open loans for credit mix.  When you pay off your car loan, FICO scores you as not having an installment loan, unless you have installment student loans or a personal loan.

If you have no negatives on your report and your score is only 655, something else is going on.  What is your revolving utilization percentage?  How many credit cards do you have, what are their limits, and what is owing on each one?  How many years old is your credit report?

An average person with 3 to 5 credit cards, at least two years of history, and utilization under 10% should be at a 720 or above, even without an installment loan.

You can't argue with FICO.  They didn't write the forumula for you, they wrote it based on empirical evidence and their customer is the lender.  You are just incidental to the whole thing.

[Anonymous]

Pulled out the credit reports from all three.

These accounts are under " Potentially negative items" But there's nothing negative about them.

So here is the info you requested:

My Grade Overview

Grade     Factor                        My Standing
B              On-time Payments         85%
B              Oldest Credit Line          14 yrs.
B              Credit Utilization             17%
B              Recent Inquiries             1
B              New Accounts                 3
C              Available Credit              $4,422.00

The available credit is also ridiculous because I have a no limit Amex....

I don't need to have so many credit cards.. I can barely keep track of the accounts I have. And If I try to get my limit increased they will tell me my FICO score is bad... LOL

So per your explanation....I'm understading that the fact that I did have 2 loans will never be calculated into my FICO because they have been paid in full and closed? So banks will receive a message saying this person doesn't have good history of paying off loans when I actually do?

[jamie123]

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@Anonymous wrote:

Pulled out the credit reports from all three.

These accounts are under " Potentially negative items" But there's nothing negative about them.

So here is the info you requested:

My Grade Overview

Grade     Factor                        My Standing
B              On-time Payments         85%
B              Oldest Credit Line          14 yrs.
B              Credit Utilization             17%
B              Recent Inquiries             1
B              New Accounts                 3
C              Available Credit              $4,422.00

The available credit is also ridiculous because I have a no limit Amex....

I don't need to have so many credit cards.. I can barely keep track of the accounts I have. And If I try to get my limit increased they will tell me my FICO score is bad... LOL

So per your explanation....I'm understading that the fact that I did have 2 loans will never be calculated into my FICO because they have been paid in full and closed? So banks will receive a message saying this person doesn't have good history of paying off loans when I actually do?

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You might not need more than one credit card but if you want high credit scores you need to have at least 3 credit cards and 5 credit cards would be better. Some of the FICO scoring calculations won't work unless you have at least 3 credit cards so you are leaving points on the table.

Who were the lenders on your closed auto loans?

[SouthJamaica]

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@Anonymous wrote:

Pulled out the credit reports from all three.

These accounts are under " Potentially negative items" But there's nothing negative about them.

So here is the info you requested:

My Grade Overview

Grade     Factor                        My Standing
B              On-time Payments         85%
B              Oldest Credit Line          14 yrs.
B              Credit Utilization             17%
B              Recent Inquiries             1
B              New Accounts                 3
C              Available Credit              $4,422.00

The available credit is also ridiculous because I have a no limit Amex....

I don't need to have so many credit cards.. I can barely keep track of the accounts I have. And If I try to get my limit increased they will tell me my FICO score is bad... LOL

So per your explanation....I'm understading that the fact that I did have 2 loans will never be calculated into my FICO because they have been paid in full and closed? So banks will receive a message saying this person doesn't have good history of paying off loans when I actually do?

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I'm guessing that the big problem with your score is the ontime payments. You need to start making all your payments on time.

If you get your utilization below 10% your score will pick up.

Your available credit isn't that much, but if you apply for another card you'll pick up an inquiry, which is negative too.

Your no limit Amex is meaningless for your score, because it's not reported. It simply doesn't count for utilization or for available credit. Which is one of the reasons I regret getting an Amex charge card, and why I don't advise others to get them.

[CH-7-Mission-Accomplished]

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@SouthJamaica wrote:

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@Anonymous wrote:

Pulled out the credit reports from all three.

These accounts are under " Potentially negative items" But there's nothing negative about them.

So here is the info you requested:

My Grade Overview

Grade     Factor                        My Standing
B              On-time Payments         85%
B              Oldest Credit Line          14 yrs.
B              Credit Utilization             17%
B              Recent Inquiries             1
B              New Accounts                 3
C              Available Credit              $4,422.00

The available credit is also ridiculous because I have a no limit Amex....

I don't need to have so many credit cards.. I can barely keep track of the accounts I have. And If I try to get my limit increased they will tell me my FICO score is bad... LOL

So per your explanation....I'm understading that the fact that I did have 2 loans will never be calculated into my FICO because they have been paid in full and closed? So banks will receive a message saying this person doesn't have good history of paying off loans when I actually do?

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I'm guessing that the big problem with your score is the ontime payments. You need to start making all your payments on time.

If you get your utilization below 10% your score will pick up.

Your available credit isn't that much, but if you apply for another card you'll pick up an inquiry, which is negative too.

Your no limit Amex is meaningless for your score, because it's not reported. It simply doesn't count for utilization or for available credit. Which is one of the reasons I regret getting an Amex charge card, and why I don't advise others to get them.

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Actually they assign you a credit limit of the higest reported balance you have had with AMEX.  So if you had one statement cut and the bill was 7K, they would count that as your limit.  If you don't use it, you won't get that benefit.

You do need five cards.  My scores climbed as I added more and more cards through 5 and stayed level and grew slower as I climbed to 15 cards.

How about opening a Barney's account?  Right now it's easy to get the limit up to like 30K in a couple of months of calling in on the credit limit increase line.  You just keep asking for more until it stops give you more.  You can buy a $10 chap stick from them twice a year.  30K will help your utilization.

When were your late payments and how late were they?  Are they more than two years old?

Your car loan payments do factor into the auto enhanced score that auto lenders sometimes use for auto financing.  It puts more weight on payment history of installment loans and less on the history of revolving credit.  Paid installment loans are good to have, they just don't count for credit mix.  Usually people lose about 20 points when they pay off their car loan.

[Anonymous]

They are Capital One and Chase. It just sucks that once I paid off both cars I don't get credit for it on FICO. Is there anything that can be done for FICO not to give lenders this message it's not accurate at all.