I buy a new car and my EQF score goes from 735 to 702 in one night. Last night 735, tonight, new car loan hits 702. I give up. A 33 point drop for buying a car? That's insane. Why have good credit? When you use it you are screwed.
Well, what lowered your score is the presence of "new credit". Give the tl some time to age. Youll get it back. Fico looks at your new tl as a negative for two reasons,right now anyway. 1. More debt 2. You havent proved a responsible payment history on the account yet. Just give it time.
I am for sure not saying anything new here on this one but if this helps someone who does not know then maybe it will help. You see in the newspaper and on T.V commercials "buy a car, establish a great credit histiory, blah blah, etc." When someone buys a car on credit they are taking on thousands of dollars in debt that needs to be paid back. When you first get the loan your credit score is going to drop because you really are more of a credit risk "FICO" then before you got the car loan. As time goes on with that new loan and the balance goes down the score will increase. Taking on a car loan and paying it off will help your credit score in the long run. Yes you are more of a credit risk then you were a week ago with the additional debt and payments. The FICO score just means your odds of filing bankruptcy, going bad on a loan, or going 90 days past due on a credit account in the next 2 years. In reality when younger people do this they are more likely to fall in that situation as we all know. I would bet almost anyone who would buy a car on credit would see their score drop right away. But the age of the loan over time would help your score in the long run. CONGRATS on the new car! Good luck.
Thanks guys and I know what you all are saying, but this is my fifth car loan, three are now open. If this was my first large installment loan or something I could undetrstand, but it's frustrating that the higher your score is and the easier it is to get credit, the more they screw you with you score when you access that ability. It's a downer and to be honest I am trying to tell myself who cares, it's only a number. However, the more I think about it the more it eats me up!
You are right is is only a number. If any of us were to get a car loan, our score would drop at first. CONGRATS on the new car. If you know you are fine than who cares what FICO thinks. You will get the FICO points back and you know it!
Actually I'll put it this way. Equifax says if your score is in the 600-649 range you have a 31% chance of going bad within the next 2 years. If your in the 700-749 range you have a 5% chance of going bad. What do they actually know based on your life. Their are people in severe debt with low incomes in the low 700's with clean credit files. Also there are people with high incomes with little debt in the 600 range with past history or very little that has nothing to do with what is going on now. If you know you are fine than that is what matters. FICO does not factor in your income and situation only your reports and their system.
If your car loan was approved by a FINANCE company, then your FICO will usually go DOWN. If your loan was approved by a BANK, your FICO will usually go UP. Check the archives... some CNetters have reported these results. MisterX
That's a pitfall of focusing on FICO. Yes, it's important and you should never give up while cleaning reports. We all know how much scores are playing more and more a role in our lives. That said, it's important to back off and live life (buy cars, etc.) and not let FICOs *unnecessarily* dictate how we function.
1*FICO scores are crap. WeatherNLU =================== 1*CLOSE! It's more like a rigged crap game. read this >>> http://members.aol.com/victcrdrpt/Score.html
I bought a new car last June and financed it thru Nissan Motors Acceptance. I had no change at all on my scores when that loan hit.
This loan was through Ford Motor, like the previous four. I just do not understand......I have never taken a 33 point hit for a new car loan. I get a new car every two years or so and this has never happened. That's why it has me so frustrated.
Wow, here's the kicker. EQF FICO was 735, new car loan, down 33 points to 702. EQF PrivacyGuard CreditXpert model was 682, new car loan, up 19 points to 701. Go figure. This is like picking a number out of a hat, it's totally ridiculous. No one knows how it works, and it means everything to people in this world. The world ought to sue the crap out of whoever decided these subjective companies would be allowed to pay such a huge role in our day to day lives.
Re: Re: I Give Up! 1*If you know you are fine than who cares what FICO thinks.2* You will get the FICO points back and you know it! J. Vick 71 ============== 1*Your creditors and insurers do and are looking for any excuse to jack you on rates. 2*And in the mean time you get gouged on your insurance and loans
Re: Re: I Give Up! 1*When you first get the loan your credit score is going to drop because you really are more of a credit risk "FICO" then before you got the car loan J. Vick ==================== Fico don't measure risk it gauges profitability. When you take out that loan fico drops your score in order to give present and futere insurers and lenders an excuse to charge you inflated prices. 2*Yes you are more of a credit risk then you were a week ago. Nope they see you as a candidate from which to bleed more money out of, ---------------------------------------------------------------- Victims of Credit Reporting - Credit Scores http://members.aol.com/victcrdrpt/Score.html http://members.aol.com/victcrdrpt/Score.html THE END ** *** ** LB 59 """""""""```~~~```'"""""""""
Re: Re: I Give Up! WeatherNLU, I guess lbrown59 is right? Your creditors and insurers now have an excuse to jack your rates and ruin your life. I guess buying that new car got you trapped into the whole CRA and creditor conspiracy game. Now you will suffer for years and years and things will only get worse. It's all downhill from here. WTF? Enjoy the car and live life, if you know you are fine and you know what you are doing, than it will all work out in the end.
