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Apparently how they figure out the FICO is a puzzle of the universe. We are applying for a mortgage, that we will only have a month or so due to selling house after buying new one when this mortgage will be paid off immediately. We just got the papers from the company. DH and I have been married 40+ years and have both names on all the accounts.
One gives us both a 832 with no notations
Second gives us both 798 with notations of "too much balance on revolving accounts", "lack of installment account information", "length of accounts"
Third give DH 801 and me 789 with the same notes as in the second one.
First.......We pay off our credit cards each and every month. Haven't carried a balance for probably 35 years. Yes we had some higher bills in Nov/Dec.....paid my hospital/surgery co-pay with them. Again, paid off every single time! Guess this is very dependent on the day that the report is pulled and not on the history of the card holder.
Second.....We use our credit cards too much, but yet we have no loans??? And that's a bad thing??? WTF?????????? Rather hypocritical, I think.
Third........BOTH of our names are on all accounts. Why do we match on 2 but the last one docked me??? I had a car loan in my name that I paid off 2 months ahead of time which should count for something. The only thing that I can figure is that on our 2 credit cards that we use the most my name is first and he is an authorized user.
And lastly..............we have had these credit cards for about 20 years, so not sure what the problem is with that.
Every bill we have/had is paid off including the mortgage on the current house. All CCs paid in full each month, no car loan, no home equity loan, nothing. What the heck else do they want???????? Last time I checked there wasn't one thing on our credit reports that showed a problem. I prided myself on having over 800 FICO and find their notes/suggestions to be ludicrous.
So weird, my credit score just went up about 48 points when I paid my balance off and kept it at 0 for most of the month (and under 20% of my credit limit when I did have a balance). My credit limit recently got raised, too, with no action on my part.
My credit card company (Crapital One) doesn't recommend getting another line of credit but other people have advised me to do so now that my credit score is in the 'good' range.
Location: 23.7 million to 162 million miles North of Venus
23,654 posts, read 12,569,566 times
Reputation: 10514
Quote:
Originally Posted by rothbear
Apparently how they figure out the FICO is a puzzle of the universe. We are applying for a mortgage, that we will only have a month or so due to selling house after buying new one when this mortgage will be paid off immediately. We just got the papers from the company. DH and I have been married 40+ years and have both names on all the accounts.
One gives us both a 832 with no notations
Second gives us both 798 with notations of "too much balance on revolving accounts", "lack of installment account information", "length of accounts"
Third give DH 801 and me 789 with the same notes as in the second one.
First.......We pay off our credit cards each and every month. Haven't carried a balance for probably 35 years. Yes we had some higher bills in Nov/Dec.....paid my hospital/surgery co-pay with them. Again, paid off every single time! Guess this is very dependent on the day that the report is pulled and not on the history of the card holder.
Second.....We use our credit cards too much, but yet we have no loans??? And that's a bad thing??? WTF?????????? Rather hypocritical, I think.
Third........BOTH of our names are on all accounts. Why do we match on 2 but the last one docked me??? I had a car loan in my name that I paid off 2 months ahead of time which should count for something. The only thing that I can figure is that on our 2 credit cards that we use the most my name is first and he is an authorized user.
And lastly..............we have had these credit cards for about 20 years, so not sure what the problem is with that.
Every bill we have/had is paid off including the mortgage on the current house. All CCs paid in full each month, no car loan, no home equity loan, nothing. What the heck else do they want???????? Last time I checked there wasn't one thing on our credit reports that showed a problem. I prided myself on having over 800 FICO and find their notes/suggestions to be ludicrous.
If you pay the balances off in full on the credit cards after the statements cut then the balance that you owe on that statement will be reported on your credit reports, regardless if you pay in full or not. If you pay the balance before the statement cuts then the balance reporting on your reports will be a zero balance, as long as you don't create a new charge on the account before the statement cuts.
When mortgage shopping it's best to have all cards reporting at a zero balance except one card, and that one card should be at 10% or less (preferably as close to 1% as you can get it) of the credit limit. Paying before the statements cut will solve that problem.
FICO factors in a mix of credit of different types of accounts - revolving accounts, installment loans, etc. Only having one type of account, such as revolving accounts (credit cards), is going to create a ding on scores. Plus, how many active accounts a person has is factored in - if the only accounts that you have are two credit card accounts then you're going to be dinged for having a thin file, also, mortgage lenders typically like to see at least three active accounts reporting.
Of course cc companies are going to tell you to keep a balance. That means you're paying them interest.
I also have only one cc, paid off every month. Actually since I stated paying it on-line, I pay off the whole thing, not just what's on the bill.
My credit score is over 800.
Keep in mind that your credit score is only important if you intend to go in debt.
Not true. You credit score also determines your car insurance premiums, whether or not you can rent an apartment, even whether or not you can buy a co-op or condo apartment (being approved by the coop or condo board to be allowed to live in the building).
Your credit score is NOT just for getting loans or credit cards!
not true about that score at all being only for going into debt. today your auto insurance and home insurance is judged by it as well as many employers use it as part of a background check to get a glimpse into you as a person and how you manage your own money and potentially the choices and decisions you make in life..
after all ,the thinking is if you can't handle your own money what are you going to do with mine and company resources?
most of the time pooor credit scores are not just an event in life that does it. it generally is poor decisions and choices you made in life leading up to that event that ruins things.
odds are we all face one of the big three at some point ,divorce ,illness ,job loss . it is how you prepare and deal with it that is different between all of us.
as a group lower credit score individuals have a shadow of a doubt cast on their honesty as well. whether right or wrong the insurance industry demonstrated a link to congress and were allowed to use scores to judge insurance rates. that carrys over to the minds of many employers .
after all why even bother having to sort out why an applicants score is low, just move on to the next applicant with a good score.
Poor decisions or not, what's the connection with risk? And why shpuld someone with just bad luck (e.g. job offshored, some medical issues) have to pay for the errors or others? Bad credit did not make me any more or less safe on the road or any more or less likely to file a claim or to cause anyone else to file a claim.
And why should I pay an insuiance penalty for refusing to file bankruptcy? i.e. my credit would be much better today if I had filed BK 12 years ago.
If you pay the balances off in full on the credit cards after the statements cut then the balance that you owe on that statement will be reported on your credit reports, regardless if you pay in full or not. If you pay the balance before the statement cuts then the balance reporting on your reports will be a zero balance, as long as you don't create a new charge on the account before the statement cuts.
When mortgage shopping it's best to have all cards reporting at a zero balance except one card, and that one card should be at 10% or less (preferably as close to 1% as you can get it) of the credit limit. Paying before the statements cut will solve that problem.
FICO factors in a mix of credit of different types of accounts - revolving accounts, installment loans, etc. Only having one type of account, such as revolving accounts (credit cards), is going to create a ding on scores. Plus, how many active accounts a person has is factored in - if the only accounts that you have are two credit card accounts then you're going to be dinged for having a thin file, also, mortgage lenders typically like to see at least three active accounts reporting.
Well, that's really stupid (not you, the rule). Why would you pay off a balance before the statement ending? Wouldn't that mean that you are constantly paying on it? We have a Visa and AmEx rewards cards so we use them for everything we can and then pay off the balance each month. Surely they can see from the history that we never carry a balance? And both cards don't come near the limit. We could actually buy a rather nice car with either of the cards, if the dealership would let us (of course we wouldn't). The balance on both of them are well less than 10% of the limit, probably closer to 2-3%.
We actually have 3 cards. Also have Discover but rarely use it.....only used for Sam's Club and our EZ Pass account so it is active maybe every other month, but not near as much as the others. I also have a JC Penney one, but again I haven't used it for probably 2 years, so it may be inactive.
Guess it doesn't really matter as they have pulled it. Just seems weird that they are so far apart from each other. But I guess that's things aren't necessarily reported to all 3 of them. I am extremely annoyed with the 789 from TransUnion. They must have gotten all the credit card stuff and nothing of the stuff I paid off.
Location: Central Atlantic Region, though consults worldwide
266 posts, read 450,373 times
Reputation: 95
Quote:
Originally Posted by jerseygal4u
Warning to everyone...keep a balance of 30% of total available credit with credit cards.
Pay a little more than the minimum due every month.
Do NOT pay them off.
My cc balance is 0.
I only have 1 credit card,and i only have a car lease i am paying on. No student loan,no mortgage.
I really though paying off the bill would raise my score.
You would think right?
Nope. My score went from 745 to 702.
I received advice from a credit repair company to do this:
I notice that my score got higher when i kept a balance around 30% of total available credit and paid it down.
I did that for a few months. Score went up by 60.
Then i read that others recommend that you pay off your credit card balances,and that would raise your score.
It does not.
I also notice that my score could probably be over 800,but Equifax,Transunion,and Experian keep saying that i am not utilizing enough credit and that they are recommending i buy a home,buy a car,or get another credit card.
WTH is going on?
It almost seems they WANT people to be in debt. Geez
There is a single paper to be filed with the three reporting agencies that will deliver 100 points fo most anyone, like 99.9%. A close friend illuminated me to the process. The company that offers that paper for each agency for a tidy sum of $500.
I'd rather have a zero credit card balance than pay interest every month.
I agree why keep feeding the loan sharks with some of the intrest rates they charge. I know people that pay 50% intrest rates every month screw that!! i'll take the 40 point drop in my score
There is a single paper to be filed with the three reporting agencies that will deliver 100 points fo most anyone, like 99.9%. A close friend illuminated me to the process. The company that offers that paper for each agency for a tidy sum of $500.
Well, that's really stupid (not you, the rule). Why would you pay off a balance before the statement ending? Wouldn't that mean that you are constantly paying on it? We have a Visa and AmEx rewards cards so we use them for everything we can and then pay off the balance each month. Surely they can see from the history that we never carry a balance? And both cards don't come near the limit. We could actually buy a rather nice car with either of the cards, if the dealership would let us (of course we wouldn't). The balance on both of them are well less than 10% of the limit, probably closer to 2-3%.
We actually have 3 cards. Also have Discover but rarely use it.....only used for Sam's Club and our EZ Pass account so it is active maybe every other month, but not near as much as the others. I also have a JC Penney one, but again I haven't used it for probably 2 years, so it may be inactive.
Guess it doesn't really matter as they have pulled it. Just seems weird that they are so far apart from each other. But I guess that's things aren't necessarily reported to all 3 of them. I am extremely annoyed with the 789 from TransUnion. They must have gotten all the credit card stuff and nothing of the stuff I paid off.
It costs the creditors to report your status, so they generally only report once a month. They have to pick a day, so statement cut is as good as any.
Your scores are dynamic and change throughout the month depending on who reports what (among other things). What you are doing by paying before the statement cuts is sprucing up each accounts "snap-shot" for that month.
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