Why your Credit Scores are Different Auto Credit Express (blog)
It happens all the time
Ever wonder why your credit scores from each of the credit bureaus are different?
Even consumers with bad credit that need terrible credit auto loans ask us this question here at Auto Credit Express where we’ve spent nearly twenty years in bad credit auto sales.
And while a web site we designed helps applicants understand down payments and how bankruptcy and repossession can affect their chances at an approval for a bad credit auto loan , it can’t possibly cover every topic. So today we’re going to check out why most people have a different credit score at each of the credit bureaus.
Credit score differences
But rather than go through our own explanation, we thought it might be a good idea to go right to the source – FICO, the developer of the FICO score. In a recent blog article, Joanne Gasking, product management director for Scores at FICO had this to say, “If there is a score difference across bureaus for a given consumer, then that score difference is 85-90% driven by data differences in the underlying credit.”
How to Improve Your Credit Score
Our very own Bankaholic Banker Alicia Lagan shares some great tips on how to raise your credit score (FICO).
Credit score?
How much will my credit score increase if I were to pay off 50% of my credit cards within a 2 month time frame? My current credit score is 568 and Im hoping to increase it to 700 :) Im planning on getting a car by the summer and I want a great credit score...
To go from 558 to 700 will take several months of good hard credit management.
Pay your credit cards down to under 30% of your limit and keep them there.
Use them for every day things, never exceed 30% of your limit and always pay in full before the due date.
I did this with 2 credit cards and raised my score over 150-points in 12-months.
Remember: creditors don't report when you pay; they report once a month, usually at statement time.
I recently had a big increase in my score by doing what you are talking about - dramatically improving my debt to credit ratio (the "amount oed" part of your scredit score - how much you owe as a % of how much total credit is available to you).
I went from low 600's to low 700's in 2 months.
My biggest concern for you is that your score of 568 is a bit low. If it is low because of some late payments it will take you longer to establish a good score. Your payment history accounts for 35% of your score and is the biggest factor. Your amount owed is 30% of the score - it is the second biggest component and as you can see while still significant it is not as important as payment history.
A good idea wold be to get hold of your credit report (you can get a free copy once a year) and make sure your low score is not due to any mistaken entries you can get cleaned up.
How high can my credit score climb if I have only credit cards in my credit history?
My current credit score is 745 and I've built it solely by using credit cards and paying on time (but never had any loans). Somebody told me that the abscence of installement-paid loan will prevent my score from climbing much higher. Is it true? Should I take some consumer loan to boost my credit score since I am planning to apply for a mortgage in the near future?
You don't need an installment loan. More often than not, they pull you DOWN. Who told you that?
the borrower is slave to the lender. you dont need a credit score for anything or a credit cartd either. debit cards work just like credit cards. mortgages can be had from several lenders that do manual underwriting. want to learn how to be debt free? check out www.daveramsey.com it will change your life !
What types of credit is needed to get a high score?
My credit score is about 615. I am working on improving my score so that I can qualify for a mortgage loan with low financing in about a year or so. I currently have an auto loan, and 3 revolving credit accounts. (All bank credit cards) Two of the revolving accounts are new, and the other almost a year old. My auto loan will be a year old in July of this year. Should I apply for more credit to get my score higher? If so what type of credit? What is a good mixture of credit to have to get a person's score higher? Any advice is appreciated. Thanks!
Keep your payments up-to-date and you should be good. Don't get more credit. A score of 750+ is average for a good IR. Just keep showing the credit companies that you can be trusted to repay loans. Now is a good time to pull all three of your credit reports and analyze them. Correct any errors and make sure everything is correct.
How do you lower your credit limit without lowering your overall credit score?
I have only have one revolving credit card, and I have a very high credit score. Because of this overall score they subsequently increase my credit line, even though I don't ask for or use this revolving line of credit. Question? I have been told if you ask for a credit line decrease they lower your overall credit score? Why? What can you do to minimize a lowered credit score?
Your talking about your debt to credit ratio which makes up 30% of your overall score.
If your balance is really low and your new credit limit reflects no more then 30% usage, your score will not be affected.
If however your new limit makes your debt to credit ratio over 30% your score will take a hit.
There is nothing wrong with having a high limit as a matter of fact it's good since it makes it hard to exceed 30%.
It's not the credit you have that matters it's how you manage it that counts.
My advice is to just let them keep raising your limit. As long as you are financial responsbile, which is sounds like you are, then it won't hurt you. Just don't use any more credit than you can afford to repay - which sounds like what you already have been doing.
In a five year period I chartered various clients in improving their score, pulling their credit evey two months after following my instructions on paying a bill, disputing an item(s), etc. I developed a "pattern" chart on what makes scores go up or down.
In your case, do not request a lower limit as you were told. What really effects credit scoring with credit is the percentage owed in relation to your "High Credit Limit" indicated on the credit report. No matter if your "High Credit Limit" is $100 or $20,000 if you are within 95% owing your score will drop 22 to 30 points, 90% 18 to 20 points, 80% 8 to 15 points.
Just a note for your friends and family: I saw this a lot when doing mortgages and prevented people from getting the loan. Not your case but you can advise if you know of someone, Student Loans after graduating allow a "deferred" time to begin paying, usually 3 to 5 years. This is to allow time for someone to start making money and live a normal life. During this period interest accrues putting your amount owed substantially over your "High Credit Limit". A really big hit to credit scoring, as much as 40 to 50 points per loan depending on the percentage over. Think about it, you graduated, got a job making really good money, feeling good about life, you can conquer anything and you can now budget to buy a home. That great Student Loan you have not been making payments for years will come back to "haunt" because you are being told the big NO in purchasing a home, not good for a young, upcoming person. Start making those payments as soon as you can regardless of time you are allowed.
Think of it as a asset the less assets you have the less likely you are to pay your debt in case of a emergency.
It will not cost you anything to keep it if you don't use it.
How can you raise you credit score even when you pay on time?
Ok, past credit messed me up. I have a judgement thats almost paid off. I am trying to raise my credit score.I have 3 new accounts that I've paid on time for over 1 year. I read that one way to raise your score is to " piggy back" on a relatives good credit ( have them add me to one of their good accounts and not use it) Is this safe, is it legal. I would love to hear constructive ways to increase my credit score. Please don't judge me. Almost all of my " bad" credit accounts have been paid off. I put my sons first when the divorce came. They lived in the house that I paid for while I lived in a basement.
Here are a couple of things you can do to raise your credit score quickly.
1) Have a relative with great credit add you to their credit card account. This can raise your score over 100 points instantly, and has not risk to them! Even though your relative can add your name to their credit card account, they don't have risk if they don't give you a credit card.
2) Use your credit cards for monthly purchase, then pay balance down to zero every month. If you have the cash, this is a very quick way to raise your credit score. Remember, creditors cannot "see" your income from the credit report, but they can tell you have financial strength when you pay down your card balances every month. This technique can raise your credit score up to 80 points.
3) Use time. Most people don't realize that a bad credit item has the most weight only in the first two months, then hurts your score even less after 6 months, and even less after 2 years. After 2 years, many bad credit items don't even hurt at all. I know a friend with 6 chargeoffs that are 4-6 years old and her credit score is 620, good enough to buy a house. Sometimes waiting even a month or two for a bad item to age is all you need for your credit score to bounce back.
It doesn't mean you are a bad person when you have a lower credit score. Bad things just happen. Good luck with your credit score!
Step-by-Step Credit Repair Guide
http://www.debt-loan-refinance-mortgage-credit.com/category/Step-by-Step-Credit-Repair-Guide.html
What's the importance of knowing your credit score when the creditors run your credit anyway?
When I apply for loans and tell the creditors what my credit score is they still run my credit. All the reports I read talk about the imporatnce of knowing your credit score and that's fine. But what's the importance of knowing my score when the creditors run it anyway? Also, how do we know that the rates that we qualify for are true based on ourcredit score? Is there a chart tat we can put our credit score up against and it tells us what rates we qualify for?
Creditors can not simply take your word as far as your credit score, besides a whole lot more then score goes into deciding weather someone gets approved for a loan or not.
I look at credit every day and see people every month with scores over 700 that can not buy a car because their score is made up of one credit card with a $500.00 limit paid 15-times and a couple of student loans.
While this generates a great score it doe's not show the ability or the willingness to actually pay anyone.
To have the best score and profile you will need 3 credit card accounts (revolving) with balances below 30% of your credit limiat and 2 cars, boats, homes, funriture or personal accounts (installment) all with good long pay history's.
How much will my credit score go down by applying for a new card?
I would prefer answers from people who work in the credit industry and can tell me roughly the number of points, and how long it will take for my score to recover once the new higher available credit kicks in...
I know part of your credit score is determined by how much available credit you have. I closed several cards a few years back before I knew it would hurt my score, and now I have very little credit available. I have excellent credit otherwise, and pay off anything I charge the next month. However, I do have a balance I've been slowly paying down, and want to open a new card so that my balance takes up less of a proportion to my total credit debt.
How much will this ding my credit in the short term? And how long will the point drop last?
For starters, sometimes people who work in the credit industry may not know how credit works because there are too many factors out there.
Credit scores are a very funny thing, you make an inquiry and your score gets lowered, close a card too fast and score gets lowered, and if you don't spend your card for a while your score gets lowered, if you pay just the minimum for too long your score gets lowered, and finally if you pay off your card too fast and your score gets lowered
The best thing to do is get a reputable card such as a Master Card or a Discover Card, spend an amount that you can pay off in about 2 or 3 months and you should be fine....your score should continue to rise as long you make your payments on time and pay it off in a timely manner. Also it would help if you have no more than 2....1 credit card and 1 store card or just 2 credit cards.
Around the horn,
The True Side
How do I switch credit cards and not affect my credit score?
I want to get a frequent flyer credit card but I already have 3 credit cards with generous limits. I don't need these credit cards and I would like to cancel them and have this "possible credit" to go towards the new card. I heard once that canceling a credit card has a negitive effect on your credit score. Is this true? If so, how do I switch credit cards and avoid affecting my credit score in a bad way?
Yes, it is true. Having active credit cards on your record is no problem. It shows that card issuers are willing to extend credit. If these cards have no balance on them, you should have no trouble getting a new card. Apply and start using it.
If there are balances on your other cards, it is a different issue. You should pay them off, or transfer them to the card with the lowest interest rate and pay that off as quickly as possible. Then make sure you never have a balance on a card that exceeds about 30 percent of the credit limit.
Paying the monthly charges in full each month is the best policy. It also means not paying any interest.
How my credit score will be affected if I do the followings?
1. If I apply for a new credit card (visa signature) but cancel my old visa card? If my current credit score is 750, what will be my score after doing so?
The following 5 critical factors affect your credit score in a major way. By knowing these you can keep a check on them and make your credit score a healthy one.
1. Re-payment history
This factor carries the highest weight in your credit report. How steadfast are you in repaying your loans, makes your credit report shine. Experts claim that this factor alone accounts for 35% of points in your credit score. So, if you falter on repayment front it is sure to be reflected poorly on your credit score.
2. Outstanding debt
The next comes your debt burden. How much you owe is a factor that according to experts carries about 30% weight in your credit score. This is
30% is based upon outstanding debt. To get a better score it is advised that you keep your outstanding debt to a minimum.
3. Length of your established credit history
The time for which you have a credit history also matters. The longer your established credit history the more credit reporting agencies believe in you. This could be simply because of the fact that they have more data to analyze your financial position. Experts give it a 15% weight in determining your credit score.
4. The state of your financial accounts
How much money do you have in your bank account, your income levels, your house, car, your assets etc. comes the next. A healthy bank account reflects a healthy credit score. Experts find that credit reporting agencies give this factor 10% weight while determining your credit score. Read more from: http://www.credit-card-gallery.com/article/204,5_critical_factors_affecting_your_credit_score
What happens to your credit score when you cancel a credit card?
say you are in good staying, never was late. always payed the balance. but you have too many credit cards let's say. so when you cancel that credit card. what happens to your credit score? Does your credit limit you had for that card get erased from the records? after all those years of building the credit limit to help the credit score. what happens to it? and what happens to your score? i'm just curious.
There are a lot of factors affecting your credit score. Let me just break down what you mentioned and identify whether they would be good / bad for your credit score.
Never late / always paid the balance - Definitely good
Too many credit cards - This, more often than not, lowers your credit score... especially when the total card balances take up too much of the total credit line given to you.
Cancelling a card may or may not help improve your score. Say for example, you paid off that card. When you cancel the card, it will no longer be part of the cards being evaluated, so if you have a high credit limit on that card and high balance on the other cards - your ratio of revolving debt will be higher and that will surely hurt your score.
It may also affect your score when you've had that card for so long since length of credit is a credit score builder.
However, if that's a recent small-balance card with a small credit line anyway, you can just pay off the balance and cut that card in bits without a bit of a worry.
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