I'm curious about something, I don't disagree with any of the wisdom posted to zb, but it seems like I read, I'm thinking it was Christine at Bayhouse site, that finance accounts do hurt your score -- TransAmerica, Beneficial, can't think of another at the moment, you all know who the finance companies or though. Sassy
Butch, although it would be great if disputes could be stopped, I don't think they can be. When Junum sent in a dispute on my behalf, 9 months after I cancelled them, (they still deny it) I asked Exp. to stop the dispute. The answer was it is already under way and nothing we can do about it. I don't know for sure if this really true, but that is what I was told.
You said: "We further believe that "installment loans" of any type other than a house or car [we think] -- including student loans, whether paid off or not -- detract from your score." Gotta disagree with you here, Doc (although I agree with everything else you said) I saw my friend's scores skyrocket when his 13K consolidated student loan started reporting. It really surprised me. My conclusion was that FICO "likes" installment loans. (Fico can't be sophisticated enough to credit him for graduating from an Ivy League college <g>
Very interesting! After reading your post, I went hunting for a list of "FICO Reasons" (the 4 reasons they give for why a given score isn't higher) and found it here among other places: http://loan.yahoo.com/c/score6.html In the list of FICO reasons, note #6 versus #26. One seems to favor installment loans, while the other seems to disfavor them, viz.: 1) Amount owed on accounts is too high. 2) Delinquency on accounts. 3) Too few bank revolving accounts. 4) Too many bank or national revolving accounts. 5) Too many accounts with balances. 6) Consumer finance accounts. 7) Account payment history too new to rate. 8) Too many recent inquiries in the last 12 months. 9) Too many accounts opened in the last 12 months. 10) Proportion of balances to credit limits is too high on revolving accounts. 11) Amount owed on revolving accounts is too high. 12) Length of revolving credit history is too short. 13) Time since delinquency is too recent or unknown. 14) Length of credit history is too short. 15) Lack of recent bank revolving information. 16) Lack of recent revolving account information. 17) No recent non-mortgage balance information. 18) Number of accounts with delinquency. 19) Too few accounts currently paid as agreed. 20) Time since derogatory public record or collection. 21) Amount past due on accounts. 22) Serious delinquency, derogatory public record, or collection. 23) Too many bank or national revolving accounts with balances. 24) No recent revolving balances. 25) Proportion of loan balances to loan amounts is too high. 26) Lack of recent installment loan information. 27) Date of last inquiry too recent. 28) Time since most recent account opening too short. 29) Number of revolving accounts. 30) Number of bank revolving or other revolving accounts. 31) Number of established accounts. 32) No recent bankcard balances. 33) Too few accounts with recent payment information. Interestingly, my four "negative reasons" for my personal Experian consumer score are (note #2, and my only installment loans were student loans): 1) Application for credit made in the last two years. 2) Presence of an installment loan (other than a real estate loan). 3) The outstanding balances on your revolving accounts are greater than the average in your credit category. 4) The total credit extended to you across your bankcard accounts is less than the average in your credit category. Of course the Experian consumer score (CreditExpert) isn't a FICO score, but they claim comparable scoring rationales, so who really knows? The explanation they give for why the presence of an installment loan is negative is: Installment loans can negatively affect your credit score because they carry fixed monthly payments, which some lenders feel may hamper your ability to meet other loan obligations. Reducing your existing installment loan(s) and carefully assessing your need for future installment loans should improve your credit score. What's strange about this lame explanation is that it doesn't account for why COMPLETELY PAID OFF installment loans similarly diminish a score. (ALL my student loans are paid in full.) Obviously, a paid-off loan can't "hamper your ability to meet other loan obligations," so this sounds like a whitewash to me. More likely, the real reason is something that may not sound as palatable to a reader: People who take out installment loans are the type of people who often don't have the money to simply pay in full for what they're buying, hence they may be a bigger credit risk during a challenging financial period. All of this makes my head spin, lol. Doc
24 & 32...SHAME ON YOU...YOU DON'T OWE ENOUGH MONEY!!!!!!!!!! That's as good as my EXCESSIVE INCOME... and EXCESSIVE CREDIT LIMITS...
"More likely, the real reason is something that may not sound as palatable to a reader: People who take out installment loans are the type of people who often don't have the money to simply pay in full for what they're buying, hence they may be a bigger credit risk during a challenging financial period." BINGO!!!!
HYPOTHETICAL... I HAVE $XXX,XXX IN 401k... I HAVE $XXX,XXX IN CD'S... I HAVE $XXX,XXX IN STOCK... SO I'M A POOR RISK BECAUSE I DON'T HAVE A LOT OF ON-HAND CASH, AND HAVE TO RELY ON CREDIT ??? ALL BILLS STILL PAID ON TIME, MOST IN FULL...HAVE BEEN FOR 24+ YEARS...
In general you never want to dispute positive accounts. Even if The positive accounts have errors in them you run the risk of having the accounts deleted.
LOL, Butch and George. You know, after getting a good night's sleep, I think I may have figured out why Calypso's friend saw a score boost when the student loans started reporting. Maybe it's this: Scoring isn't unidimensional. A factor that would otherwise lower one person's score may indeed raise another's. Example 1: If I have a VERY SPARSE credit file -- say, with just one or two tradelines -- then my score will be low or moderate because of insufficient data to produce a high score. Then, let's say I have a spate of student loans with good payment histories suddenly show up on my reports. My score will likely rise. Moreover, if my original one or two tradelines had a late pay or two, then the addition of the positive installment loans may raise my score even more! Example 2: In the second example, let's say that I have ten great tradelines on my report with a perfect credit mix and terrific payment history, but suddenly an installment (student) loan appears. In that case, perhaps the score would be lowered a bit by its presence. Installment loans must raise or lower ones score within the context of what's already there; we know that's certainly true for other scoring factors. Maybe George really IS right about that "random number generator" lol. Doc
Just for clarification. He had about 6 or 7 student loans reporting on all 3 CRAs. Right when they were coming out of deferment, he consolidated them. The CRAs still showed them with a balance. He disputed. Ex immediately reported the multiple loans with a zero balance but did not report the new loan.Eq correctly reported the old loans paid off and the new consolidated loan. His score went up. TU *cloaked* everything related to his loans. When the correct reporting appeared, his TU score went up. Ex finally showed the new loan. His score went up. Maybe the model is sophisticated enough to detect a consolidation. Maybe it gives you points for that? For some reason he has some of the highest Ex and Eq scores I've seen for someone with 15K in cc debt and 13K student loans (high 700s) He has a great job. But they don't give points for that, right???
