the official credit thread

[cromag27]

checking your credit score with credit karma may not lower your score, but what they don’t tell you is that you’re getting a vantagescore 3.0 model, and not a true fico score (model 5, 8, etc). less than 10% of lenders use the vantagescore to determine credit worthiness. the vantagescore is useful for detecting trends in your credit worthiness but should never be used when talking about your credit score.

some credit card companies give you a fico 8 score for free and this is much more accuarate than a vantagescore. different lenders will use different scoring models (auto, credit card, mortgage, etc.). otherwise, you have to pay for your fico scores.

the three major credit reporting agencies (experian, transunion and equifax) use different formulas for credit scores and tradelines can report differently between the three companies.

a “good” fico score is around 720.

free credit reports are available every 12 months here:

https://www.ftc.gov/faq/consumer-protection/get-my-free-credit-report

your credit report will not come with your credit scores, but they are still important to obtain to ensure the information on there is accurate.

if there are inaccuracies on your reports you can dispute them with the credit reporting angency. do NOT dispute anything that is accurate to try and get it removed. this is fraudulent.

collection agencies....

if you owe a collection agency money, paying the debt is the right thing to do, but don’t expect it to come off your credit report or increase your score. according to the fcra (fair credit reporting act) removing a negative tradeline in exchange for paying the debt is called “credit bartering” and it is not allowed. a paid collection account will remain on your credit report until the statute of limitations has expired. this will vary depending on the type of debt. a paid collection account is still going to report as a collection account until it is removed. credit scores do not generally change when a collection account status goes from unpaid to paid.

government debts have different rules. some government debts can be removed by completing or entering repayment programs (dept of ed). if you have government debt in collections you may be subject to tax offsets and administrative wage garnishment, which means it’s all handled via paperwork and you will not be summoned to court. your employer has an obligation to cooperate in the administrative wage garnishment process. if you quit and change jobs, the government will eventually find you. if you’re really unlucky the government will also levy your bank account.

bankruptcy does not make your debt go away. it essentially makes the debt non-collectible.

chapter 7 generally wipes out unsecured debt. you still owe the debt but creditors can not collect on it.

chapter 13 is a structured payment program for people who don’t qualify for chapter 7, but need debt relief.

again, government debts play by different rules. generally, government debt cannot be discharged through chapter 7 but can be included in a chapter 13 filing.

most people don’t like talking about credit because they don’t understand it, or they have bad credit. the only way to overcome this is through education and setting the appropriate course of action.



i have 15+ years of collections experience, including government contracts and have numerous certifications in collections laws (fdcpa and various individual states) as well as fcra laws. i also have an education in law (civil, criminal, commercial).

 

[Ultra Aquatics]

Good write up, credit karma is worthless pretty much. I subscribe to myFICO which is the real scores for all 3. It’s $39 a month but worth it IMO.

 

[cromag27]

Good write up, credit karma is worthless pretty much. I subscribe to myFICO which is the real scores for all 3. It’s $39 a month but worth it IMO.

yes! credit karma does also show you somewhat of a credit report, but not fully. and they only have contracts with transunion and equifax.

 

[Sailingeric]

I have been a mortgage underwriter for over 20 years and I can say don't get too hung up on your credit score. It is only a part of the whole big picture when you go get a house or car. I have declined people with a high score but very little credit and have approved people with a score below my policy due to having a lot of credit history but have a lower score due to a recent late payment due to an oversight or co-signed loan not being paid on time. When I look at approving a home mortgage I look credit history, income, the amount of debt you have to your income and assets you have. Debt to income is a big factor that often makes or breaks a deal and if you are thinking of buying a house or a car, just because you can afford it paper, really take a look at what else you have in expenses because the debt to income ratio we work with is only for installment, mortgage, and credit card payments. We don't consider day care, gas for you car, auto insurance, power bills, or coral you want to buy. For example I could approve a mortgage at 45% debt to income based on your gross income. Figure you bring about 60%-70% of your gross income, that leaves you 15%-25% of your income to cover all of life's expenses. So if your household makes $10,000 a month, your house payment+car payment+credit card payments come to $4500 a month, you are left with about $2,000 for everything else. Not much wiggle room after phone bill, power, food, etc.

 

[sfin52]

I hate payments

 

[cromag27]

I have been a mortgage underwriter for over 20 years and I can say don't get too hung up on your credit score. It is only a part of the whole big picture when you go get a house or car. I have declined people with a high score but very little credit and have approved people with a score below my policy due to having a lot of credit history but have a lower score due to a recent late payment due to an oversight or co-signed loan not being paid on time. When I look at approving a home mortgage I look credit history, income, the amount of debt you have to your income and assets you have. Debt to income is a big factor that often makes or breaks a deal and if you are thinking of buying a house or a car, just because you can afford it paper, really take a look at what else you have in expenses because the debt to income ratio we work with is only for installment, mortgage, and credit card payments. We don't consider day care, gas for you car, auto insurance, power bills, or coral you want to buy. For example I could approve a mortgage at 45% debt to income based on your gross income. Figure you bring about 60%-70% of your gross income, that leaves you 15%-25% of your income to cover all of life's expenses. So if your household makes $10,000 a month, your house payment+car payment+credit card payments come to $4500 a month, you are left with about $2,000 for everything else. Not much wiggle room after phone bill, power, food, etc.

yes, mortgages are a completely different animal. but credit scores are still taken into consideration, especially if someone wants to qualify for a specific program. but i would never recommend anyone to not get hung up on their fico scores.

 

[Sailingeric]

yes, mortgages are a completely different animal. but credit scores are still taken into consideration, especially if someone wants to qualify for a specific program. but i would never recommend anyone to not get hung up on their fico scores.

What I mean is your score changes all the time, it might go up a few points or down a few points month to month. Don't fret if you went from 732 to a 728. If you pay your bills on time, your score will be good, if not, your score will reflect it. The one thing that drives down scores for people who pay their debts on time is the amount of revolving credit used to the amount available. Someone who maxes out all their credit cards are a bigger risk versus someone who has $500 balance which $10,000 available to use. If you get a new car loan or credit card, your score will drop a few points for the few months until a payment history is established.

Another thing about scores that most people don't realize is the credit model used. A home mortgage lender will use a different model than an auto lender, same for credit card companies. They will generate a different score, not by much, but each put a different importance on a part of the credit profile. Auto lenders will consider your auto and installment history a little higher over other debt, mortgage lenders the same, a credit cards will look at revolving usage and history.

 

[cromag27]

What I mean is your score changes all the time, it might go up a few points or down a few points month to month. Don't fret if you went from 732 to a 728. If you pay your bills on time, your score will be good, if not, your score will reflect it. The one thing that drives down scores for people who pay their debts on time is the amount of revolving credit used to the amount available. Someone who maxes out all their credit cards are a bigger risk versus someone who has $500 balance which $10,000 available to use. If you get a new car loan or credit card, your score will drop a few points for the few months until a payment history is established.

Another thing about scores that most people don't realize is the credit model used. A home mortgage lender will use a different model than an auto lender, same for credit card companies. They will generate a different score, not by much, but each put a different importance on a part of the credit profile. Auto lenders will consider your auto and installment history a little higher over other debt, mortgage lenders the same, a credit cards will look at revolving usage and history.

right, which was covered here, “different lenders will use different scoring models (auto, credit card, mortgage, etc.).”

so yes, scores can be different depending on the scoring model that’s used. not all lenders will use fico 5, 8, etc.

you also made good points about how scores are calculated.

each credit reporting agency has their own proprietary formula. they will weigh each criteria differently.

 

[norfolkgarden]

Good write up, credit karma is worthless pretty much. I subscribe to myFICO which is the real scores for all 3. It’s $39 a month but worth it IMO.

May I suggest Lifelock.com at $25 a month for the most expensive option and as little as $10 for the cheapest option.

Had it for 10+ years. Happy customer.

We have to give out SSN and other sensitive information on a regular basis for security clearances at work.
Lifelock helps me sleep a little easier.

 

[cromag27]

How new FICO changes may lower — or boost— your credit score

The newest version of the FICO credit score will have a broader view of how you manage your debt and will boost as many scores as it will hurt.

www.yahoo.com