When I look at my credit report on Equifax my HELOC (Citibank) reports under "Mortgage Accounts"
When I run many credit reports I see HELOCS reporting under "Revolving Accounts"
The HELOCS that report under Revolving seem to lower the scores for the customers whose lenders report that way. It always takes me a second to digest when I quickly run someone's credit and see that they have $230,000 owing on their credit cards. Other than FW apporama-aficionados there aren't many people who actually owe that much revolving.
I believe that lenders who report HELOCs that way are playing the same type of game Cap1 plays when they don't report a limit.
A document that describes what a "soft pull" can ask for provides solid evidence for a 70% cutoff: "File contains greater than a 70% debt ratio on bankcards". (Of course 50% and 90% may be valid too, just used in different situations.) The wording implies overall bankcard utilization rather than any individual card, but that's not completely clear. And, "bankcard" presumably ignores a properly-coded HELOC or installment loan.
Based on the order listed, it appears that >70% is worse than 60 days late! (No guarantee that's still true.)
Source: a .doc file on this CreditBoards thread (posted Oct 17 2006, though the OP says it's about 2 years old) ... I just found it today while searching for something else.
Question (for people who download the doc and know something about the credit industry): what do the various status codes mean? Depending on how one interprets the wording, it appears that 2 means 30-days late, 3 means 60, 4 means 90. Not sure about 5, 7, 8. Bankruptcy may be 9.
cardjuggler said: Question (for people who download the doc and know something about the credit industry): what do the various status codes mean? Depending on how one interprets the wording, it appears that 2 means 30-days late, 3 means 60, 4 means 90. Not sure about 5, 7, 8. Bankruptcy may be 9.Using some of the jargon/keywords in the helpful document you posted, I was able to find another document that answered your question about account status codes. The reference is a training brochure published by Equifax: http://www.credentialcheck.com/cc_university/materials/informational_resources/Credit%20Training.pdf
Status codes: CS—Current Status of Account Code Description 0 Too New To Rate; Approved But Not Used 1 Paid As Agreed; Satisfactory; Current 2 Pays 31-60 Days; Not More Than 2 Payments Past Due 3 Pays 61-90 Days; Not More Than 3 Payments Past Due 4 Pays 91-120 Days; Not More Than 4 Payments Past Due 5 Pays Over 120 Days; 5 or More Payments Past Due 7 Making Regular Payments Or Paid Under Wage Earner Plan Or Similar Arrangements 8 Repossession 9 Charged Off To Bad Debt
Using the industry codes from that reference, here is how I interpret the 70% test indicated in your doc, "Accept the file if the balance(s) on R-type tradelines with industry type BB, ON, FC or FS exceeds 70% of the high credit/credit limit."
R-type = revolving BB = Banks ON = National Credit Card Companies FC = Credit Unions FS = Savings & Loan Associations
= "Raise flag if the balance(s) on revolving accounts with industry type Banks, National Credit Card Companies, Credit Unions, or Savings & Loan Associations exceeds 70% of the high credit/credit limit."
jakeru said: Using the industry codes from that reference, here is how I interpret the 70% test indicated in your doc, "Accept the file if the balance(s) on R-type tradelines with industry type BB, ON, FC or FS exceeds 70% of the high credit/credit limit." Aha; I didn't read down to the end of the DOC file. Although still not worded well, that suggests it's 70% on ANY account, i.e. "a balance or multiple balances".
An aside: staying below 70% is no guarantee of avoiding adverse action.
cardjuggler said: A Source: a .doc file on this CreditBoards thread (posted Oct 17 2006, though the OP says it's about 2 years old) ... I just found it today while searching for something else.
Very interesting info cardjuggler-- Thanks for posting !
These type of documents shed at least a little light on the process.
I have some more documentation stored in an old file-- One of the most interesting was an old Fair Isaac power point presentation on their scoring methodology. I just searched my computer and couldn't find it but I'll post it when I do. During my search, I ran across a few interesting things-
One is an old quote from a Fair Isaac spokesperson: "Everyone would agree that paying off revolving debt is a good thing," says Fair, Isaac spokesman Craig Watts. But all things being equal, "having a little balance on a line of credit is a little better than no balance at all," he says. A zero balance provides less information to the FICO scoring model about one's ability to manage debt than keeping a small balance.
The other is court testimony by Equifax, TransUnion, Experian and Fair Issac before the Commissioner of Insurance in Georgia several years ago. For anyone with the patience to sift through the pages, there's a lot of information. I downloaded the .pdf files but I can't find the link to the site. Does anybody else have it?
I've been trying to locate the testimony before the Georgia court in 2001. I'm still having no luck but I did run across this interesting piece of info in another court transcript:
"your credit score depends on what type of credit you have, you can get a low score even if you have a perfect payment record. If you have a credit card with a tire company, a loan from a consumer finance company like Household or Beneficial, or have an installment sales contract from a used car dealer, you get a lower score regardless of whether you pay on time. But if you have a gas station credit card, you score is higher!"
I had always heard that having a consumer finance loan (like Beneficial) would result in a ding (those are relics of the old days before low-cost BTs) but I had never heard that tire store credit cards or used car loans lowered scores (I don't think there are many of them either these days) Also-- I never heard that gas cards raise scores.
Can anyone advise or direct me to information regarding the opening of a credit card in my name that was technically not approved by me? I'm worried that keeping it, canceling it, or consolidating it will adversely effect my credit score.
My situation: I applied for a card online with citibank (I already had one citi credit card). They called me a few days later to say that they can only approve it if I agree to split the existing credit limit on my other citibank card. I said I did not want to do that but that I may consider it if they can send me more information in writing about what all that entails. The rep said he would mail me something that day.
However, all I have received is a letter saying the card is on its way with a measly $500 credit limit. I did not want this. Now when I called, the rep says they have no notes on the previous call, and that my only options are to consolidate, keep, or cancel the card. What would be the best thing to do here in order to preserve my credit score? Would keeping and never using it lower my score?
Does anyone know approx. how long it takes for the credit industry to notice/update when a 'large' payment is made?
I recently sold my car which was on a 0% CC and Im going to be paying it off....Im wondering how long it will take for the credit bureaus to take that into account.
ProBanker said: Does anyone know approx. how long it takes for the credit industry to notice/update when a 'large' payment is made?
I recently sold my car which was on a 0% CC and Im going to be paying it off....Im wondering how long it will take for the credit bureaus to take that into account.
Usually the CC issuers report to the CRAs on the statement closing date of your credit card.
ieenymeeny said: a measly $500 credit limit Lots of us AOR folks have cards with $500 CL after moving most of the CL to a new card. That doesn't prevent high scores (in between AORs). So, I think the general advice applies: don't cancel. Canceling a card rarely helps your score and often hurts it.
I have two credit cards with high utilization between 8-9K on 10K limits. I also have an AMEX Gold which is paid in full every month. I owe approximate 9K on a personal loan. I own a house but am unable to refinance at this time. My FICO is mid-700's on all 3. I am considering a debt consolidation loan. From what I have read in the finance forum, the decrease in my utilization % should offset the the decrease in my score from the inquiry. Is that correct? Will the personal loan do any more damage? Thanks.
MikeC103, it depends on the personal loan. If it's from a finance company (not a bank or CU), it might well hurt, just because the "credit mix" won't look as good.
In any case, dropping utilization on those other lines will certainly help.
DaveHanson said: MikeC103, it depends on the personal loan. If it's from a finance company (not a bank or CU), it might well hurt, just because the "credit mix" won't look as good.
In any case, dropping utilization on those other lines will certainly help.
It would be from a bank. Could you clarify what you mean by credit mix? I assume it is the combination of credit cards and installment. How bad will that hurts? Thanks!
MikeC103, that it's from a bank is good. But as for how it would effect your overall profile beyond that, I really couldn't speculate--too many variables.
If it reduced your utilization substantially on those cards, it would _likely_ help.
An even better plan might be to get some new 0% lines to BT that high-rate debt too...but with your high utilizations, that might be tricky. Please see the other threads listed in the OP and QS if you want to pursue this.
DaveHanson, thanks for the info. I researched and explored the 0% BT idea here and other forums. The general concensus is that it would take about 5 cards to do it with my high utilization. I have basically have to perform an app-o-rama and hope that they all perform an inquiry at the same time in order for my rating not to be hurt.
I believe the best option is to get this loan, pay it down as much as possible and then after 6 months or so apply for maybe two new cards and 0% BT at about 50% utilization. What is your opinion? Thx again.
MikeC103, I'm not able to offer more specific advise on your particular situation, but I do think you'd be well advised to do anything you can to bring down utilization before doing an AOR. A bank loan, esp if rates are decent, might be the best way to do that. Best of luck.
I had a chance to spend some time and chat with a Fair Issac IT employee at a recent trade show, and of course I brought up the subject of the FICO scores and their secrecy.
He did admit that the official scoring IS secret, but is not that complicated to figure out given "everything that is disclosed publicly". The way scores are calculated are due to "weighting" - so if someone has some math backround, this sounds familiar.
First of all he says, scores are only within a specific range (I think I read 350 to 850 or something like that...that is there is no 'zero' score nor is there a 999 score) the actual range is 100% so 850-350=500 represents 100% every percentage counts as 5 points in that category....). It is apparently therectically impossible to score the lowest or the highest (like reaching infinity).
Now the 500 points (or 100%) is distributed as follows: You start at 350 points - everyone gets that 35% (or 175 points) is 'payment history' 30% (or 150 points) is 'amounts owed' 15% (or 75 points) is 'length of credit history' 10% (or 50 points) is 'new credit' 10% (or 50 points) is 'types of credit' --------------------------------------- 100% or 500 points
Each category is calculated in its own way due to the nature of what it contains, for instance 'new credit' simply reduces scoring the more numbers (ie: inquiries) are put in there whereas 'payment history is the most complex requiring calculating number of accounts, average days due, length of account, etc)
Certain categories start out in the middle and + or - depending (like payment history) and some start out at max and go down as the numbers increase.
For instance, in the 'new credit' (which is the simplest apparently), you start with 50 points and it goes down by 10 every time you have a new credit app within the past 6 months. That number changes to 5 as the 3 months moves to 6 months and goes down to zero after a year. For instance you applied for a card this month, you lose 10 points. Apply for another, bang, another 10 points. You are down 20 points. as you pass the 3 months mark without applying for any new credit, the 20 becomes 10 - therefore you simply "gain" 10 points as time goes on. At the 6 month mark, you gain another 5 (as long as no new credit is applied for) and then another 5 at the one year mark. Now it sounds like you are GAINING points - but actually you are only winning them BACK from being lost.
Types of credit category: you start with 0. Now this is a 'portfolio' category. The 50 points "basket" is evaluated on the type of credit you have. Installment loans, or credit margins give you the MAX - the are harder to get and have a fixed monthy payment. 'Good credit' users have a healthy mix - like 2 installment loans and 2 credit cards and no finance loans. You get points mainly for a healthy mix - not just a number of credit cards. The numbers are something like 20 for Installment, margins, and car loans and 10 for credit cards up to 4, then you lose points (on CC's only). You lose points by having finance company loans (since their interest rates are highers and they are lenders of last resort and frequntly loans are 'secured' by home equity or a co-signer). The stronger your basket is, the higher your number goes - up to a max of 50 points of course.
Amounts owed category is "weighted". Basically it is credit used divided by credit available. The used divided by available factor is inversely scored. Mortgages do not count here. For instance, Having $20000 of credit and carrying all $20000 will give you very low points - maybe 10 points only out of 150 possible. But carrying a balance of 0 on $20000 available will score you close to 150 points! That means that although you have high credit limits, you don;t need or use that credit - a good risk and indication of good money management. Maxing out all credit limits (ie $20,000 owing on $20,000) will give you very few points - not 0 but something like 10. However the higher the AVAILABLE credit number will give you more points. In other words 0/$500 does not carry the same as 0/$8000. And I was told that THIS category has the most significant impact. Keeping your balances low or nil will yield you close to 150 points reagrdless of any time element involved. Fin out when credit cards post their oustanding balances (usually it is your statement date but may be different) and make sure you can get your balanace paid off by that date - and then watch your score shoot up.
Length of credit history (75 points) is some convaluded formula that adds more points the longer you have credit history reporting for you. Basically it is 0 points when you start and maxes out at 75 if you have something like 40 years - which for most is around 58 years old !!! The MORE older accounts you have the better, and accelerates the score. Apparently they use points for months time accounts (ie 2 accounts x 200 months plus 2 accounts x 10 months plus 1 account x 5 months would give 425 month-accounts over a number like 800 = 54% and therefore give you 40 points out of 75 which is the percentage.
Payment History is a whopping 175 points and is the most complex. Late payments are killers here apperently. One late payment on an installment loan can wipe away 5 years of good payments. 60 days and 90 days erode your score in this category faster than water on your sandcastles. Collections are like grenades. And there is no easy fix except time and consistent good payments. The max is around 175 if all your accounts in the past 6-7 years are paid on time. ALL of them. Late payments are weighted (mean more) if they are more recent....and tend to be less destructive as they appear in the past. They "weight" these by looking at each account, seeing the reporting per month and seeing if each month was on time, 30 days late, 60, etc. They are not kidding when they say "pay your accounts on time". At least the minimums. Paying more than minimum does not count here (THAT will come up in the extended credit section if your balances are too high). They only want to see your payment history. Apparently there is no leeway or tolerance in this section. This tells them (creditors) how serious you are in paying your bills.
So out of the 5 sections, each one calculated on their own merits, they add up the results and come up ith your credit score. 350 + (165 + 110 + 67 + 40 + 40) = 772
So I did not walk away with the formula for Coke ...but I did get a general idea about how it all works.
I have a question that I don't think has been addressed before (I apologize if it has). Does anyone know if a closed account with a balance on it would be positively or negatively affecting my overall score? I had a 3.99% for life offer on an AT&T Universal Card that was closed by Citi when they dumped the AT&T cards, and I missed the window to get it converted to another Citi card. Its showing up on my credit reports as closed by grantor, I owe $6500 and credit limit/high balance is $16750. I wonder if it would benefit me to just pay this off, since the rate isn't too great (although good enough that I wouldn't mind keeping it if it could be helping my score). Anyone have any insight?
mhesidence said: Stolen from another forum, sounds plausable.
Length of credit history (75 points) is some convaluded formula that adds more points the longer you have credit history reporting for you. Basically it is 0 points when you start and maxes out at 75 if you have something like 40 years - which for most is around 58 years old !!! The MORE older accounts you have the better, and accelerates the score. Apparently they use points for months time accounts (ie 2 accounts x 200 months plus 2 accounts x 10 months plus 1 account x 5 months would give 425 month-accounts over a number like 800 = 54% and therefore give you 40 points out of 75 which is the percentage.
Exellent post mhesidence, About credit history, basicly what you are saying here is more card you have and older they are could accumulate more month so it could reach to higher score, So I don't undestand if when I have 20 account * 24 month = 480 month, Is equal to when I have 2 account * 240 month = 480 month?
Do u think is this the case? I am little confuse by that part. tks.
1. An "Initial Fraud Victim Alert" on your reports triggers a multitude of things. Your file is now handled by Special Cases. Any disputes on 1 bureau will propogate to others as well. This is a good handy alert to place when you want to dispute a ton of things on your report en masse. One dispute, of any kind - phone, online or US mail, will be notified to the others as well. Results of investigations also get sent from the bureau initiating the investigation to the others. So it works uniformly.
2. Dropping old lines did NOT do much damage to my scores. 4 old (positive, Closed/Never late) accounts fell off over the weekend and FICO score changed by -1 point. Disappeared accounts were open for 3+ years, had good usage and limits when closed. FICO did penalize me by one point for losing them 3 more are scheduled to fall off next month...another point loss anticipated
One little bit of info gleaned from the various articles in the last week:
"Because Fair Isaac doesn't want rivals to copy its formula, it isn't giving out too many details about the changes, but spokesman Chris Watts did say this:
Fair Isaac divides the population into 10 segments based on credit history and applies a different formula to each. Eight segments include people with good credit, and two are for people with serious problems.
Under the new system, the population will be divided into 12 segments: eight for people with good credit and four for people with bad credit. That could result in a slight change -- up or down -- in many scores"
So, instead of 10 segments, there will now be 12. 8 will be for people with good credit.
I am very curious to see how the new changes will affect younger people with thin records--
I view a lot of reports so I'll know pretty quickly.
There are a few changes to your credit report today: A new account has been added to your credit report.
Also, your FICO® score has decreased by 22
I just got the new BoA AMEX Accolades card and this is the first new card I have got since my AoR almost 10 months ago. I only had 9 open. Does a 22 point drop seem excessive for one new account? Kind of makes up my mind about not doing another AoR
how did the account report as? high utilization? any CL reported? When I applied for the card I was not sure if it reported CL's but it did and I got a nice $50k CL. No BT on it and my total utilization before this new line was only at about 17%. So hopefully this will only be one of those temporary drops. Score still not bad, It dropped me from 801 to 779
College student, have part-time job, currently have Citi Dividend Platinum Select (for about 7 months). I've been reading ways to build better credit. I've always pay my bill online within a week from the billing date. I have a hard time keeping my credit utilization on the low due to low credit limit and FW Hot Deals. I'm thinking about applying for another card.
I'd be greatly appreciate anyone who can clarify this. I will only get one hard-pull no matter how many application I submit that day, or am I not? I plan to keep upcoming card in my drawer and continue to use my Citi card.
YuGiOh, If you haven't already, immediately click the no hard-pull CLI button on Citicards' website. You can click this ever 6 months, and you might be impressed with the results. If you still want more of a CL, I would recommend applying for 2-3 cards with different issuers(Chase, Discover,BofA, etc.). This would help you build relationships with different banks for the future, and Chase is pretty good about giving at least a 5k credit line to start out with.If you do all the apps in one day, they will all result in a hard pull, but timing of the pulls is often delayed, and you will have the best chance at getting the best lines of credit. Oh, and I wouldn't just apply for crap credit cards to sock-drawer, I would look for better rewards card than your Dividend. Check out the "What CC should I get?" FAQ in the Quick Summary.
I recently successfully disputed a July 2004 (last reported Oct. 2004) collection off my Equifax report. My FICO (myFICO.com) jumped 31 points (683 to 714), while my FAKO (privacyguard) jumped only 8 points (686 to 694).
I recently successfully disputed a July 2004 (last reported Oct. 2004) collection off my Equifax report. My FICO (myFICO.com) jumped 31 points (683 to 714), while my FAKO (privacyguard) jumped only 8 points (686 to 694).
bejota3
<edit for typos>
How do you dispute collection off a report? My wife's account got turned over to a collection company. She only found out about that after contacting a credit report company about negative account that she didn't recognize. Turns out this is Macy's CC that got converted from Marshall Fields with new CC company and new account number. She hasn't used Marshall Fields card in years and did not notify the company about changing address about 3 yrs ago. Apparently there was a charge on that account that we never found out about because it was sent to our old address. Now her account has been discharged and the credit card company wouldn't deal with her - they wouldn't provide her with any information. Collection company provided the statement in question but still didn't come up with a signature on receipt that we requested. What is the best way of dealing with this situation? Should we just pay up the collection company (about $450)? Consult a lawyer? One of my concerns is that paying collection company would not change the credit report - it would still show as discharged. Any and all suggestions are greatly appreciated.
CheapBustard said: One of my concerns is that paying collection company would not change the credit report - it would still show as discharged. You are right to be concerned about this.
While credit repair strategies are beyond the scope of this thread, you will find resources for dealing with this here . Best of luck to you and your wife with this.
OP: "I know of several monitoring services that provide credit reports and "FAKO" scores. Examples include Privacyguard and TrueCredit . I subscribe to both, at around $100 yearly, but only because they both allow me to pull new credit reports every day. Other FWF users have reported that they are no longer given access to new reports each day."
So what is the inexpensive way to monitor our credit score? myFICO.com, Privacyguard.com or ???
I know WAMU CC offer free score but We do not have access everyday.
will balance transfer lower my score? how does other banks know if im doing a balance transfer? i just got 2 credit cards and if i do a balance transfer, it will bring my utilization down to 40% on each card, should i not do it? any input would be great
"It has always been common knowledge that closing aged accounts will hurt your scores. I myself (and many others) have always believed that this due to one losing age now that the TL is closed. This in fact is not true.
Revolving utilization is the only area of scoring where closing an account can hurt you (at least in the short term). A closed account with a revolving balance is still counted against utilization; however, a closed account with a no balance would not be.
In terms of credit history, closed accounts are treated no differently than open accounts. Meaning, the age on a closed account that let's say is 20 years old gets counted the same as an account that was closed six months ago. In fact, the length of credit history gets counted for every TL on your report, regardless.
Keep in mind that closed accounts in good standing are generally removed from your credit report after 10 years, whereas an open account in good standing can remain indefinitely.
Lets recap... In the short term, the only harm by closing a revolving account is due to the utilization percentage you lose, while over the long term, a closed account will be removed from your credit file after 10 years, which could lower your score due to the loss of history."
Anyone know how to get a FICO score for Puerto Rico? myFICO doesn't allow me to enter in Puerto Rico in the pulldown field for state. Experian does allow for Puerto Rico, but does it report a true FICO score?
I just looked back in this thread to verify the date that I predicted the tightening of credit standards for mortgages. It was March 4, 2007. Like everyone here I had noticed that standards were getting looser and looser because of CDOs (Collateralized debt obligations) backed by subprime mortgages.
As long as the risk was being absorbed by investors and not lenders, sure, they were willing to make loans to folks with low credit scores all day long.
But now we see how it is all unraveling.
I think that this thread will be even more important in the future. High scores are going to be critical.
Not just for mortgages, but for credit card offers-- I predict all lenders will be clamping down. They are even tightening up on corporate credit and cutting credit lines.
All those sweet Citi BT transfer offers have vanished (for my family at least) Every mortgage broker I know tells me that 20 loan programs disappear each month.
We are lucky to have this forum for info bc there will be more pain to come.
edited to add this great quote in the Wall Street Journal this morning 8/7(in a must-read article entitled "How Credit Got So Easy And Why It's Tightening")
Lessons have been learned -- the hard way. "The structures are here to stay," says Glenn Reynolds, chief executive of research firm CreditSights. "But you have to run it like a prudent risk-taking venture, not like it's casino night and you're on a bender."
Do soft pulls by creditors looking to offer us unsolicited credit also speed up *b? If so, does it help to "opt in" since there will be more soft pulls (I have currently opted out).
makingmovies said: Do soft pulls by creditors looking to offer us unsolicited credit also speed up *b? If so, does it help to "opt in" since there will be more soft pulls (I have currently opted out).
Thanks.
yes, any soft pull will contribute to bumpage (except for Experian, of course.)
however, if you want to play the credit card investing game, the more important reason to "opt in" is to get juicy offers.
Disclaimer: By providing links to other sites, FatWallet.com does not guarantee, approve or endorse the information or products available at these sites, nor does a link indicate any association with or endorsement by the linked site to FatWallet.com.
Members of our community may attach files to a post in accordance with the User Agreement. FatWallet is not responsible for the content, accuracy, completeness or validity of any information contained in any attached file. Files have *not* been scanned for viruses. Be especially wary of Excel files which may contain malicious content.
