My Beacon Score

I was finally able to get my Beacon score from Equifax this morning. 650. Not as good as I want, but better than I thought.

 

Equifax says it's a bad score... 24th percentile. My Equifax report has 12 negative items, TU has 16 and Experian has 13. Lexington got 4 off my TU and 1 off my Equifax this first round and I still have not heard from Experian.

Although I have been able to pull up my online Experian report a few times a week the past couple of months, I tried to this morning and it tells me I can't view the report and I should call their 800 number. Maybe that's a sign they are getting busy on the disputes.

 

Well, I started the process after already having one Providian card for 32 months, a second for 9 months, Cap One for a year, Orchard and Household cards for 11 months. Fortunately I'd never been late on any of them during that time. If 650 is indeed a good score for starting the repair process it shows the "healing" power of a few positive tradelines.

Also -- I have two tax liens, one released and one not. Equifax is only reporting the released one, so I expect my TU and Experian scores would be lower. Indeed my eloan score last week was 633 and they looked at Experian which is reporting both liens.

 

Here's the stuff from the website. 650 is right on the edge of the scale for a 15% delinquency rate. If it were 649 the rate would be 31%.

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Credit score: 650
Source of score: Equifax (BEACON®)
Reason codes: 38 13 18 10

Your BEACON score: 650
The information in your Equifax credit report has been summarized in a BEACON® score of 650. Most U.S. consumers score between 300 and 850. Generally, the higher your score, the more favorably a lender will view your application for credit. Compared to the national population, you are in the 24th percentile of consumers by credit risk. A score of 650 is well below average. Studies show that for consumers with scores similar to yours, the odds of becoming seriously delinquent (90+ days past due) on one or more credit accounts are 4.64 times higher than for people with an average score.

 

On the myfico.com page right after they give the scores they explain the reason codes. Right now my balances on cc accounts are:

Providian $2,407 bal, $7849 limit
Providian $0 bal, $1650 limit
Capital one $616 bal, $750 limit
(I transferred $740 last month from my high limit Providian card to take what advantage I could of my new lower CapOne rate and because I want my Providian cards to be at a zero balance next time I call their retention department for better terms.)
NextCard $401 bal, $1000 limit
Orchard $104 bal, $300 limit
Household $375 balance $600 limit

My Household and Orchard cards had been in a desk drawer since I got them a year ago. I started charging them to get some activity so I can get the limits raised. I was going to carry a balance for the next two or three months to see if I could then call and get increases.

I also have had a Discover card since 1990. Beginning in 1996 and until last month I would neglect paying it for months at a time and then foolishly send in a token payment. This never let the balance go down and let them age the account every time I paid. The balance was $1,942 as of April with the limit reported as $1,000 and the account closed by credit grantor. I decided last month the only way to get this taken care of is to pay it, so over the last six weeks I have paid it down to $876. Next month it will be paid off completely. On all of my credit report updates for last month though the account is showing $1,325 balance with $1,000 limit.

 

Here are the myfico.com explanations of the codes:

First Reason Code: 38 Your first reason code is 38, â??Serious delinquency, and public record or collection filedâ?. This is the single most important factor affecting your score. This reason occurs when there is a derogatory public record or collection agency reference, as well as one or more serious delinquencies on your credit accounts, appearing on your credit report. Studies reveal that consumers with previous late payments are much more likely to pay late in the future. There is no â??quickâ? fix to improve the score if the derogatory public record, collection item, or serious credit account delinquency appearing on your credit report is valid. However, as these age and fall off the credit report, their impact on the score will gradually decrease. (Derogatory public records, collection items, and credit account delinquencies stay on your report for up to seven years; there are items that could remain longer.) Note that satisfying or paying off the collection item or derogatory public record will not remove this information from your credit report. The fact that it occurred is still predictive of future repayment risk, and thus it will still be considered by the score.

Second Reason Code: 13 Your second reason code is 13, â??Time since delinquency is too recent or unknownâ?. This is the second most important factor affecting your score. Analysis of consumer credit histories shows that consumers with previous late payments are much more likely to pay late in the future. The FICO score evaluates not only the presence of previous late payments, but also how recently the missed payments occurred. In general, the more recently a payment was missed, the greater the risk, and the lower the score. There is no â??quickâ? fix to raise your score if the late payment on your credit report is valid. (Credit account delinquencies stay on your report for up to seven years. Note that closing an account on which you had previously missed a payment does not make the late payment disappear from your credit report.) In order to improve your credit score over time, you need to pay your bills on time. The longer you pay your bills on time, the better the score. If you have late payments, get caught up on back payments and stay current. As time passes the importance of these previous late payments will gradually lessen and the score will increase â?? as long as you make your payments on time on all of your credit obligations, and use your available credit responsibly.

In rare cases, evidence of a past missed payment on a credit account is present on the credit report, but the date of the late payment cannot be determined exactly. An â??undateableâ? credit account delinquency on a credit report still represents greater risk than never having missed a payment at all, and thus it will still affect the score.

Third Reason Code: 18 Your third reason code is 18, â??Number of accounts with delinquencyâ?. The appearance of this reason indicates that there is past or present evidence of late payments on one or more of your credit obligations. Late payments are a very powerful predictor of future repayment risk. There is no â??quickâ? fix to improve the score if these reported late payments are valid. However, as these missed payments age and fall off the credit report (late payments stay on your report for up to seven years), their impact on the score will gradually decrease. In the meantime, it is important to pay all your credit obligations on time. Additional missed payments may lower your score.

Fourth Reason Code: 10 Your fourth reason code is 10, â??Proportion of balances to credit limits on bank/national revolving or other revolving accounts is too highâ?. Analysis of consumer credit behavior repeatedly finds that owing a substantial balance on revolving accounts relative to the amount of revolving credit available to you represents increased risk. In fact, the level of revolving debt is one of the most important factors in the FICO score. The score evaluates your total balances in relation to your total available credit on revolving accounts, as well as on individual revolving accounts. For a given amount of revolving credit available, a greater amount owed indicates a greater risk, and lowers the score. (For credit cards, the total outstanding balance on your last statement is generally the amount that will show in your credit report. Note that even if you pay off your credit cards in full each and every month, your credit report may show the last billing statement balance on those accounts.)

 

Re: Reason Code list

You don't -- unless maybe you run for President.