08 Feb 2013

credit score

Look, it’s this simple. You don’t know your credit score. In addition, you don’t even know what “credit score” is (that wasn’t a typo).   This is going to be a “did you know” type blog with a touch of “thanks for misleading us, credit score industry” attitude. Did you know you have FICO ’04, FICO Classic, FICO Classic II, Beacon 1 through 5 (and some new beacons we can’t even verify are released yet), FICO ’08 (which isn’t even used), Plus Scores (with a bunch of variations), Vantage Scores (even more variations) and a multitude of online scores which merely mimic these so-called “legitimate” scores (which are pretty much useless). In fact, we could create a “Superior Tradelines Credit Score”, which would have absolutely no impact on the lending community or consumers and I am sure we would have a lot of consumers buy it simply because it says “credit score” in it. We aren’t going to do this, because we like to tell the truth to our clients and visitors. However, don’t think for a second that hundreds, if not thousands, of companies, are doing exactly this right now as you read this blog… that is, they are selling you fake credit scores. We tried to reframe the question “what is my real credit score” as well as “where can I get my real credit score” and we encourage you to read those blog posting.   Credit scores; show me the numbers! Here’s a score report from a “legitimate” tri-merge (hard pull) credit report for a husband and wife. Note the difference in scores (their names, not the numbers).     Another notable issue is the difference in score ranges. Could you tell me on which range is your credit score? 330 to 830, 350 to 850? Who knows, right? Scores range anywhere from 330 to 830 and 501 to 990 (and every variation in between).   We pulled out our magnifying glass and found this gem on Vantage Score’s website: “It’s important to note that different models use different ranges.   The VantageScore™ range is 501 to 990.” Doesn’t this disclosure clear everything up for you? FICO, sure; you’d be at the higher end… but Vantage, you’d be smack dab in the middle.   Credit scores; How many scores are out there?   We’ve listed a few […]

18 Jan 2013

credit application

The simple answer is, yes. As with everything in life, the complicated nature of this question deserves a better answer. In fact, we need more questions, too. How does denial of credit affect your credit score? How does approval of credit affect your credit score? Will the impact be different depending on the amount of the credit obtained? Let’s explore these issues. If I am denied credit, will my credit score suffer? Technically, yes. However, perhaps not for the reasons you think. For the most part, the credit bureaus (and subsequently credit score modelers) will not know that you were denied credit. So, your score will not be negatively influenced just because you were denied credit. It’s the inquiry that could bring your credit score down after you apply for credit. You usually start to see a decrease in your credit score from excessive inquires after 6 inquiries within the previous 24 months. There is no hard line rule as to the number of score points you will lose, but the internet seems to be settled on the idea of between 3 and 6 points per inquiry. There is one thing to watch out for… Under the FCRA, if you are turned down for a line of credit, you can request a free copy of your credit report citing the denial. DO NOT DO THIS. You are essentially saying “Hey Credit Bureau, I was turned down by a lender because my credit is bad”. The impact credit approval has on your credit. Being approved for credit does have an impact on your credit score. Traditional wisdom suggests that this is “always” a good thing. There is such a thing as “too much credit”. So, for example, if you have a lot of credit and you apply and get approved for more credit, you actually become a risk in the eyes of score modelers (like FICO). Why? Because you could rack up a large credit line and default on it. This is currently an issue being addressed by Bankruptcy Courts today. In addition, if you applied and got approved for, say, a $300.00 line of credit, this tells the score modelers that you are “only” worth $300.00 in terms of risk. If you are starting from nothing, this is fine… you have to start somewhere. However, if you have had credit […]

05 Nov 2012

WILL MY SCORE INCREASE BY ADDING TRADELINES?

Like a fingerprint or DNA, no credit report is the same. As such, the score improvement you should expect depends entirely on your current credit report. The “40 to 50 points per tradeline” claims you see on competitor websites are so false and misleading, it could be considered humorous (if only these claims didn’t negatively affect real people’s lives). Piggybacking credit tradelines affects everyone differently because everyone’s starting point is different.   Can you tell me, generally, how much my score will increase by adding Seasoned Tradelines?   Generally, the fewer the number of tradelines (or accounts) you already have on your credit report, the larger impact the authorized user tradelines will have on your credit score. And, likewise for the inverse. Largely, the less negative items you have on your credit report, the higher your score will increase after adding seasoned tradelines. Again, the opposite applies. We will discuss three scenarios… One; what credit score increase to expect with negative items such as collections and charge-offs, etc., two; what happens if you try to pack your credit report with too many seasoned tradelines, and, three; what happens when you add tradelines to a limited credit file.   Tradelines added to a report with derogatory items… Of course, all situations are different, but it is possible to boost your score with tradelines even if you have derogatory or negative items on your current credit report. The amount and severity of the negative items will determine how much of a boost you get… along with the appropriate selection of tradelines to counter the problems with your report.  Below is an example of a credit report with derogatory items and the addition of tradelines.  The scores went from between 590 and 630 to over 700 on all bureaus. When you look at the report, you will notice derogatory items and assume there’s no way this file would be in the 700s.  The tradelines are to thank for this score.     Can I just load up my credit report with Tradelines and get an 800 credit score? We’ve ran into a couple of situations where clients demand that we sell them 5 and 6 tradelines because they are (insert ridiculous reason here). Unfortunately, we decline each request as it simply will not work and we like to help our clients, not hurt […]

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