o After watching the score systems for Equifax, TransUnion, and Experian (I know there fake, but I'm just trying to get an idea on how this system works) it seems 3-5 cards, with high limits that report gives you the highest score. o Carrying a balance with a finance company decreases your score..even a small balance (by how much depends on your debt ratio load). o A $0 balance with a finance company does not seem to have much of an effect on the score. o One inquiry is the magic #. o Accounts that are 3 years + and a credit history over 5+ years old will maximize your score. o The difference between having an installment loan and not having an installment loan (20+ points). o Magic debt ratio load - 10-15% of total revolving credit. Less than 5% actually hurts your score (quite sickening, but true...at least from what I have observed). * By following the above observations credit scores ranged between 750-780 (with no lates, or other derogs). To reach 800 your credit history needs to be between 10+ years old. If anybody has any comments or other observations I would love to hear them. Dani
Fine observations indeed. To clarify the definition of "length of credit history," it appears to mean not having one account for 5 years or any other length of time, but rather having multiple accounts for that length of time. My Citibank MasterCard, my lone account for 6 years, routinely gets me cited for lack of credit history, or insufficient length thereof. I don't think that will end until my second account, currently a bit over 2 years old, finally passes the 5 year mark, or possibly the 7 year mark.
I know what you say about finance company accounts is true. But, what if the account is paid off, in good standing, but is stll being reported? Will that harm your score? I did some financing of furniture at a couple stores with their one year no interest financing. It was through a finance company. I did not know any better at the time. I also think that high balances will kill your scores. I have perfect credit except I am maxxed out on all my major CC's and I can't get above 660. Actually, I paid down my Citi by $7500 but they have not reported yet. Another observation is that a negatives like a paid collection will kill yur score, but when it is removed, there is little or no improvement. I got zero points when a paid collection was removed. All in all, a very unfair system.
Karen, Concerning finance companies it doesn't seem to hurt your score if their is a $0 balance on the account and if it was paid on time. I noticed it when I charged something to my CompUSA account (Household Bank) and it was reported to the bureaus (end of statement balance). My score took a hit (about 5 points) for only a $100 balance. After I pay it off the score goes back up. If I put $100 on Discover or Amex it doesn't affect my score at all. Dani
Thanks - great information. Unfortunately, before I found this site after I closed a bunch of cards including my Sears account I opened in 1985 with a fairly good credit limit. Oh well. I have two Visa/MC accounts now since I closed the others. When you mention 3 to 5 cards, does that include department store in addition to major cards? I still have a Nordstroms card which I never use so perhaps I should close it too. I have at least 4 Household Finance accounts on my report which are all closed/paid off as agreed etc. CompUSA was one of them. I no longer keep so many accounts around. You mention having an installment loan is positive. Would this include a mortgage loan? I have a 1st and 2nd. I recently paid off my car loans so they are paid as agreed and closed. Thanks again for the information.
Michael, Any kind of installment plan works whether for a mortgage, auto, or even personal loan (as long as it is not through a finance company). A paid off installment loan with a finance company is alright though. Dani
Ok here's what I have observed: When our car loan started reporting in Jan. my Exp went down a few points while hubbys went down about 30. On TU his score went UP 40 points when it started reporting and mine went down about 5. On EQU BOTH of ours went up, his about 40 and mine about 10. Now I am the primary and he is the cosigner. Now when hubby was at $0 owing on all CC's his score was the best it's been, now he owes 10% and his score is the owrst it's been. Just when I think I've figured out the "secret game", they throw me a curve ball.
Good observations. My own history fits in with your description quite well, and my scores are right where you indicate they should be (mid to high-700's). In fact, a GM dealer recently pulled my TU and came back with a 790. Holy cow! RM
