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     | Monday, January 24, 2000 - 07:36 pm  This is an FYI for all those who think about FICO scores and what situations cause what effects. I found these "tips" at http://www.best-rate.com/creditscore.htm I would be interested in the opinions of some of the experienced folks who monitor this site, such as Greg, Sean, Christine, Voight, etc.....you KNOW who you are! Of particular interest to me is the part about the annual fees on credit cards having an adverse effect on FICO. A DISCLAIMER: the "tips" below may or MAY NOT be valid, and THAT is why I'm posting here for some feedback from those who know a lot about this stuff. -------- Avoid dormant status A tiny use of credit card, say one purchase a year, with immediate payoff is good, because failure to use a card for more than two years will cause credit scoring software to assume that this is a dormant account. Put your credit cards in a safe deposit box and don't use them for three months. Credit scoring is based on looking back for several months, so you need to wait at least three months ( or even 12 months) after paying off debt to get a better credit score. Avoid "recent use" label If paying off collection account, this will trigger "recent activity" on credit report, which will hurt your credit score, so pay off collection account at close of escrow rather than as part of the initial loan application. A dormant unpaid collection account is better than a recently paid off collection account because of the "recent use" factor! Pay annual card fees early The annual fee on your card is a charge that can hurt your credit score by a tiny amount, so pay it in advance. just keep a logbook for each credit card showing the anniversary, the fees, etc. and mail the payment in one month early. Establish a season to apply for credit card debt When applying for cards try to only apply for a card during the same month of the year, say in October. This way credit inquiries will only pull down your score for 90 days after October. This means that if you try to buy a home in the spring time those inquiries
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| | Tuesday, January 25, 2000 - 07:23 am Well some of its advice is good and some is bad. Their advice that you should "reject credit limit increases" is crazy. Their contention that inquiries only really hurt you for 90 days is wrong. I think there's a definite risk of cell phone companies inquiring on your credit and test driving vehicles may result in an inquiry as well. I simply refuse to give out my social security number to anyone and if people become demanding I give them a bogus one. A person who wants to get the best advice should simply skip to their bottom 7 summary and ignore most of the text of the article.
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| | Tuesday, January 25, 2000 - 08:02 am creditscoring.com has a page just for that type of baloney: http://www.creditscoring.com/pages/explanations.htm , "The Explanations - Others' (some amusing) analyses." They lose me right in the first paragraph by saying, "The factors are: excessive use of creditor high balances on credit cards, repeated credit inquiries in the last three months, lack of credit references for over two years; less than five credit references...." What is an "excessive use of credit?" That is not a score factor according to Fair, Isaac's handout on factors. "Repeated credit inquiries in the last three months": nothing about three months on the handout. "Lack of credit references for over two years": nothing about "two years" on the handout. "Less than five credit references." Great. another magic number to confuse everybody. Not in the documentation I have. In the meantime, the national credit reporting agencies remain mum on the specifics of scoring-- one of the ridiculous ironies of this subject. It's laughable: everybody yaks about it, there are no answers to many of the questions because the system is secret, and grand debates ensue. You may as well be discussing the existence of life on other planets.
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| | Tuesday, January 25, 2000 - 10:08 pm I agree with Sean on the quality of the advice, don't know how they come up with some of it. Maybe somebody could send them a little inquiry? They might just have an explanation. They are a mortgage company and have E-mail addresses at their site. Refusing to provide a social security number or providing an incorrect one is NOT a guarantee that the credit won't be pulled. I paid AT&T $1,000 to avoid the inquiry and did NOT provide my ssn, yet 2 weeks after activating my cell phone they ran my credit. Also, unless that changed recently, credit reports are not based on ssn's, but on names and addresses. I wouldn't be surprised if giving an incorrect number would result in a flag or "file variation" on future reports.
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| | Wednesday, January 26, 2000 - 07:31 pm On Greg's question regarding "excessive use of credit"... What they mean is the balance-to-limit ratio. If you are close to being maxed out on all of your existing accounts, it suggests that you may not have the money to pay them down in a reasonable amount of time, and lack a reserve in case of financial problems. If the consumer cannot afford to pay down current obligations, then s/he may have difficulty paying new ones. Also, if the total balances have been steadily increasing over a long time (1-2 years), then this pattern may continue with the consumer spiraling into default and/or bankruptcy. A major concern with inquiries is that very recent ones (less than 60-90 days) may represent applications that were approved, and the new accounts just haven't started appearing on the report yet. This means that the consumer may have more available credit than it looks. If the inquiries are older than that, then this is less likely. In reading the recommendations, remember that it was published by a mortgage broker, which wants to encourage prospective customers to behave in a manner which will help meet their (the broker's) specific requirements. That will naturally be somewhat different than, for example, the steps taken by a consumer trying to maximize his/her potential with credit cards. http://www.cardreport.com
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| | Thursday, January 27, 2000 - 03:42 am http://cardreport.com: If their recommendations are specifically to meet the broker's guidelines, then why do they refer directly to "FICO scores." They say, "The factors are: excessive use of credit or high balances on credit cards... " Is the broad-based risk credit bureau score not used for credit card lending? Are you saying that an increase in a credit card balance over two years ago won't result in a negative effect on a score? Will an inquiry less than 60 days old reduce the score more than one over 61 days old? Will an inquiry between 60 and 90 days old reduce the score more than one over 90 days old? Is using a credit card 25 times a day every day an excessive use of credit? Is using 10 credit cards at once an excessive use of credit? How close is "close to being maxed out"? 51%? 75%? 90%? 99%? 99.999%? If you are "close to being maxed out" on all but one, and that one has a credit line twice as high as all the others combined, does that not count? http://creditscoring.com
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| | Thursday, January 27, 2000 - 05:18 am I paid AT&T $1,000 to avoid the inquiry and did NOT provide my ssn, yet 2 weeks after activating my cell phone they ran my credit. I had a potential creditor tell me that he didn't need my SSN to run a credit report. Yes, they have to have your permission, but not your SSN. Your SSN is not the only primary key in their databases ... :)
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| | Thursday, January 27, 2000 - 05:22 am If you are "close to being maxed out" on all but one, and that one has a credit line twice as high as all the others combined, does that not count? Isn't it your total revolving debt versus your total credit limit on your revolving accounts that determines whether you're, to use non-technical terms, "close to being maxed out"? My residental report listed a ratio of total revloving debt versus total revolving credit limit as a single item. Then again, I don't know if the score(s) were calculated based on this consolidation or the individual lines themselves. Hmmm .. maybe that's the point you're making? :)
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| | Thursday, January 27, 2000 - 08:47 am I agree with Greg (what a shocker) that "excessive use of credit" is a very nebulous way of putting it. If they mean having too many revolving accounts or having too many revolving accounts with balances then I'd agree. If they mean something else, then I disagree. (Ir?)Regardless I think they should be more clear. Also you can get a credit report on more than 80 percent of the people in the United States by having nothing more than their name and zipcode. Nor do you need their permission to access their credit profile ... all you need is a permissible purpose -- like being a collection agency trying to collect on a debt they allegedly owe.
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| | Saturday, January 29, 2000 - 10:46 pm According to the recent fines on Equifax by the State of Vermont, you do need the consumers permission to access their credit file. Probably just a Vermont thing.
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| | Sunday, January 30, 2000 - 09:06 am You need to have someone's permission to pull their credit, even if it's only verbal. Most CRA's compile lists of people with credit in a certain range of credit scores and sell the whole list to potential creditors without telling them your exact score. It's way more economical for the creditors (can you imagine the costs for pulling and reading even 10,000 credit reports?) and it's easy money for the bureaus. That's generally where unsolicted offers of credit come from and how they know what kind of credit (secured, premium, etc.)
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| | Monday, January 31, 2000 - 08:06 am Kristy, you'll love this one. I called Providian's 1-800 number for my wife (she wanted a card), told them who I was, gave them her info, and they offered her one to me over the phone without even talkng to her. (I didn't like the terms and turned it down.) But that is stretching permission by anyone's definition.
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| | Monday, January 31, 2000 - 11:00 am Kristy is out to lunch. Unless a state's law says differently (as Vermont's apparently does) you don't need the consumer's permission to pull a credit profile on them. All you need is a permissible purpose. If your permissible purpose is 604(a)(3)(E) then in many cases the consumer won't even know who you are, much less why you are pulling a credit profile on them. I can guarantee you that PMI companies either pull or are provided consumer credit profiles on people all the time without the person's permission. That's the way it works. That's the American way. God bless America.
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| | Wednesday, February 02, 2000 - 03:28 am Which God would that be?
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