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     | Wednesday, January 26, 2000 - 03:56 pm  Hi all, I've been doing my homework on the credit scoring nightmare and I'd really appreciate any advice or links to advice regarding my question: Beyond the obvious, how do I maintain the highest credit score possible? Here's my profile - I'd appreciate educated / experienced responses as to any perceived "red flags". Or, a link as to where I might go to consult someone about this. I'm planning to take on a mortgage next year and I'd hate to find that my available credit or some other B.S. factor lowers my credit score for apparently "no good reason". Established credit 15 years ago. Three revolving-credit accounts (cards), all platinums. All cards are upgraded from smaller-limit cards and I've held accounts with all three for over ten years. No late payments. Total available credit on these (fairly evenly split) totals about $20k. I don't carry balances and never go more than 50% into available funds. No other blemishes (have checked all three reporting agencies). Income just south of six figures. No mortgage (I rent). No car loan (ever - just lucky). Nearly-paid student loan (small balance). Healthy investments and savings account. I do not own my own business. I thought that I might be a creditor's dream, however after reading about such strange scoring procedures and things like credit refusal even if a person owns a successful business, I thought I might ask those "in the know". Kind regards, Makakio
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| | Thursday, January 27, 2000 - 04:37 am You *are* a creditors dream ... :) Based on the information provided, you should not have any problems securing a home mortgage - creditwise. The price of the home that you can afford will be based on your down payment, income current debt to income ratio (which should be low considering that you pay everything off and carry no balances). The only suggestion that I'd have for you is to take out some type of small installement loan - possibly a personal loan. You don't have any installment loan history in your credit file (personal loan, auto loan, etc.). Not only do creditors like to see that you can manage revolving accounts (variable balances with variable monthly payments, like a credit card), but they also like to see you with a regular payment history on an installment loan (same payment over n months, such as a car loan or personal loan). I'm not saying that you MUST do this - just a suggestion. Again, based on the info you provided, and based on the fact that you said you have nothing derogatory on your credit reports, you should not have a problem next year with securing a mortgage at the best of terms (provided you find a good, honest lender).
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| | Thursday, January 27, 2000 - 09:34 am RCB - Thank you - I appreciate the feedback. Just a question - do student loans count as "installment" loans? I've been making regular payments (slightly more than minimum) for about five years now and am due to finish paying it off this year. Would not want to take out a loan I don't have to... Regards, Makakio
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| | Thursday, January 27, 2000 - 09:53 am I can't answer that - I've never had a student loan. Anyone?
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| | Thursday, January 27, 2000 - 11:25 am There are three types of accounts in the world: installment, revolving and open. Student loans are installment loans where you make a certain number of payments until they are done. Revolving accounts are like credit cards where you have a credit limit and you make a minimum payment every month. The final type is the AMEX card where you can charge on it, but the entire balance is due and must be paid off immediately.
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| | Friday, January 28, 2000 - 06:40 am Thanks Sean - nice to know I have the installment already taken care of... Makakio
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| | Friday, January 28, 2000 - 07:34 am makakio: What are your scores?
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| | Friday, January 28, 2000 - 02:40 pm Don't know - how do I obtain them? Not sure I'd want to post them for the world in any event...
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| | Friday, January 28, 2000 - 10:28 pm You may already have an 800 credit bureau score. If so, you are already doing everything right: according to Fair, Isaac, about 900 is the maximum. http://www.creditscoring.com/pages/forumtranscript.htm#page235 An 800 will thrill any mortgage banker for common loans. In fact, so would 700. But I want the Holy Grail: 900. Find a mortgage company who will take your application for the cost of the credit report, who will give you a copy of the credit report (including the scores and the four reasons each of the three scores-- 6 for a joint application-- are not higher), and who will issue a commitment (approval) subject to the appraisal of the property. If the scores are not high enough for you, take action (you may have to guess what action to take) based on the reasons they are not higher. You can post your scores as "Anonymous."
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| | Saturday, January 29, 2000 - 08:19 pm Greg: I have been working on negotiating some debts for a client. I pulled his credit and he had: 3 alias names, 1 alias Social and 3 previous addresses. His trade lines consisted of 37 current accounts and 7 collection accounts, all fairly minor in balances, fewer than 300.00 each. His average score was 570. What I found interesting and this follows as to why I am posting it here, is the next client I had,,-un-related to this client had: 23 current accounts, 70--SEVENTY collection accounts,5 alias names,4 alias socials,13 previous addresses,a Bankruptcy(btw,all bad debts were post-petition) and 31 returned checks. Both had minor inq's. Guess what? Their scores were the same! I found that quite interesting and would like comments on that. It further backs up the whole scoring problem. While both were negative, one was obviously way, way worse. Income and debt ratios on current accounts were about the same. Additionally his wife had 106 collection accounts! I was amazed; I had never seen this extent of derogatoriness before yet he scored the same as the other client. Kristi Feathers CarreonandAssociates.com
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| | Saturday, January 29, 2000 - 10:24 pm Income and debt ratios? Where exactly do you find that information? On a merged CR from the mortgage broker, it listed the risk scores, but not any DTI ratios. Also, one risk score was 0523 Positive, one was 00456+, the other just plain 00543. Anyone seen a minus? These were scores calculated on 3.2 million in high credit limit, 42K monthly owed, and total amount past due of 57K. Our income last year was 41K! How were these scores calculated on Debt to Income ratios?
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| | Saturday, January 29, 2000 - 11:00 pm The client provided income info. We are only speaking here of their income in relation to their current accounts and what they considered to be their monthly debts for the accounts they are paying, not for the collection accounts and all outstanding derog's. My point here, was how does the bureau calculate almost identical scores for these two people when their income and average debt was basically the same yet their credit was so entirely different. Not getting into Loan Review Board jargin, just stating a point of how many times I see almost identical scores for credit that is completly different. A man with 70 derog's scores the same as a man with 7 derog's! There scores were calc'd by Fair Issac not cal'c on income and debt ratio. I listed that info in case anyone was to come back and say, maybe their scores were identical because of DTI, but thanks for the course in posi's and negi's. Kristi Feathers CarreonAndAssociates.com
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| | Sunday, January 30, 2000 - 01:09 am Kristi: It doesn't pass the common sense test, and the beat goes on. If you could get those two to agree to allow Congressman Cannon's office and the subcommittee to review their files, you might have something. If this thing ever gets a hearing, real, live people and their mangled reports have to come forward. The CRAs and Fair, Isaac would simply say that the inaccuracy makes the comparison moot. Fannie Mae would say you can throw out the score if there is so much inaccurate data. I say tear into the reports and dispute every little error. If the CRAs screw up on only one, sue. Make noise. Ask questions. Report the answers to the world. I learned how to show the malarkey in lending by watching Christine Baker at bayhouse.com.
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| | Sunday, January 30, 2000 - 08:59 am Greg: That is exactly my point, they would argue until dooms days that is was moot, because bad is bad and once you have x number derog's they would say the scoring software cannot possibly figure it out. But, how fair is that? I can have 7 real derog's that are affecting my score but the guy next to me can have 70 and come up with the same score. The client with 7 derog's of course does not know about the client w/70 derog's but he kept asking me if his score would come up if he paid those. I explained to him that it would still take time for the scores to lift even if we negotiated neutral ratings or deletions but I question if and when that would happen. It amazed me that the score of 570 could be placed against a person with 70 derog's while a score of 620 and over can get you pre-qualified for mtg. That in its self makes no sense. BTW, he scored 550 EQF, 560,TUC and 580 EXP,all reports combined had a total of 106 derogs!,major ones too. Judgments and charge offs. It is for this exact reason that the credit union I managed, ignored desktop underwriting and actually viewed the data and approved the loans based on overall performance not scoring. We used scoring as a minor guide and they still do. The LRB at the CU had a major problem with scoring and how unfair it was. We funded more loans then our fellow credit unions and had lower delinqueny ratios and the other CU used scoring as approval guide. It just goes to show if aint broke sont fix it!. Thanks Gregg! Kristi Feathers Carreonandassociates.com
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| | Sunday, January 30, 2000 - 03:55 pm Kristy, if I might return to your question of how these two people have nearly identical scores...and this is only an OPINION and GUESS without any substantiation, support or basis: If there are multiple scoring models out there, and I have HEARD that there are either 7 or 10, then isn't it possible that the person with post-bankruptcy debts is not being judged by the same criteria as the other person? Perhaps FICO is only judging him/her against other people who are post-bankruptcy, and relative to them he/she is a 570 FICO. Whereas the other person is a 570 relative only to people who never filed bnk. If such were the case, then at some arbitrary time after the bnk, the FICO software MIGHT determine that the bankrupt party has had enough time to re-establish credit and can now be judged by the standard FICO scoring criteria. At that point things might be bad for the former bankrupt. Just a guess. I'm better at the dating stuff.
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| | Sunday, January 30, 2000 - 09:23 pm I thought of that too but the Bk is 8 years old now. So wouldnt time have ruled that out?
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| | Monday, January 31, 2000 - 07:26 am Yes. I would think so. I guess.
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| | Friday, March 31, 2000 - 05:09 am I just performed a debt ratio calculation and came up with 1_35. I cannot find an explaination of the answer. Can antone suggest a web site with this information.
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