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Losing the FICO war

Posted by on Jun. 30, 2014 at 8:40 AM
  • 11 Replies

Never had a home foreclosure. DID have an almost foreclosure - sold the home (for a profit)  - not a short sale, never went to foreclosure (back in 2008 when the market crashed).  So that loan, tho it showed some lates, showed paid in full as a final standing. 

Do have an auto repo (with ex husband - 6 years ago)

Have done everything I've been told that I was "supposed to do" since then.    

Paid bills on time (even those dreaded hard-to-figue out medical bills that seem to never end - even if just small payments - still keep those ongoing and current so nothing new goes on my CR as negative. 

Opened a couple of small credit cards - use only 31-39% of available credit - pay on time, only allow increases once per year. Don't use 'retail credit cards", don't apply for any cc as a way of getting 10% off. I Stick to what I already have. 

Closely following advice of a financial planner as to what to pay off (from past credit report) and what not to (because paying some things actually ding you harder - she says) - all that "should be paid off" was paid off over 3 years ago.  The rest falls under "these shouldn't be paid because they will hurt you more than help you" ~ as per the financial advisor. 

Have a current (in good standing) auto loan (never missed a payment, never had a late pay) - this is the second auto loan since the repo (both paid on time, never late)

Have a current mortgage (with new DH - paid on time, every time).


Yet I still can't seem to get my FICO up.   Even with no new negative items since 2007, even with only using 33% of my available credit, even with 2 auto loans in good standing, even with mortgage in good standing, even with 22% debt to income ratio - I'm STILL considered high risk with a score of less than 600!     What am I doing wrong?  Why won't this score come up?

by on Jun. 30, 2014 at 8:40 AM
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Replies (1-10):
michiganmom116
by Gold Member on Jun. 30, 2014 at 1:56 PM

What didn't you pay off per your financial advisor's advice?


CurlersNHeels
by New Member on Jun. 30, 2014 at 2:36 PM

A couple of old medical bills.   For a total of about $650.  And one cable bill  for $184 that had been disputed, proved invalid and not removed from my credit profile.

chicken13
by Member on Jul. 2, 2014 at 9:09 AM
1 mom liked this

Sounds like your financial advisor was wrong.  

michiganmom116
by Gold Member on Jul. 2, 2014 at 11:01 AM


Quoting CurlersNHeels:

A couple of old medical bills.   For a total of about $650.  And one cable bill  for $184 that had been disputed, proved invalid and not removed from my credit profile.

pay those medical bills....they're still considered bad debt.  Then call the cable company or whoever you need to call to get that $184 off your credit profile.  Those things are still sitting there keeping your FICO score down.

hobbit1123
by Member on Jul. 3, 2014 at 10:36 AM

I find the FICO so odd.....We've been paying off our debt(dave ramsey plan) and my score jumped up like 30 points in a month but yet my hubbys stayed the same. go figure

And I have a brother in law him and wife each have the same things on their credit and her is almost perfect like a 925 and his is 850

So I don't understand the jump in mine so quickly and yours hasn't raised. I'd pay the medical bills and look into that cable bill

CurlersNHeels
by New Member on Jul. 7, 2014 at 8:15 AM

The system doesn't make any sense what-so-ever.         When we did our auto loan, we were run through 3 different banks (all for auto loan) - each bank received a different score for us from Ex, Exp and Trans. on my husband.  

Hand to God -   GM Fin got Ex- 745, Exp 722, Trans 660

                          Wells Fargo got Ex 702, Exp 689, Tran 610

                          Local Credit union got Ex 730, Exp 740, Trans 576

How the hell does that happen? How the hell does one person have 9 different credit scores on the same day?  

michiganmom116
by Gold Member on Jul. 7, 2014 at 8:27 AM

different criteria per company, different things being reported to each company, different times of the day, and each inquiry can affect your credit score.

Quoting CurlersNHeels:

The system doesn't make any sense what-so-ever.         When we did our auto loan, we were run through 3 different banks (all for auto loan) - each bank received a different score for us from Ex, Exp and Trans. on my husband.  

Hand to God -   GM Fin got Ex- 745, Exp 722, Trans 660

                          Wells Fargo got Ex 702, Exp 689, Tran 610

                          Local Credit union got Ex 730, Exp 740, Trans 576

How the hell does that happen? How the hell does one person have 9 different credit scores on the same day?  


CurlersNHeels
by New Member on Jul. 7, 2014 at 8:55 AM

Ugh      This system holds our financial future hostage and it seems that it's perpetually broken and designed to work against us.    

eye rolling

Mom2Boys9501
by Member on Jul. 7, 2014 at 8:56 AM
850 is perfect. The score doesn't go higher than 850.

Quoting hobbit1123:

I find the FICO so odd.....We've been paying off our debt(dave ramsey plan) and my score jumped up like 30 points in a month but yet my hubbys stayed the same. go figure

And I have a brother in law him and wife each have the same things on their credit and her is almost perfect like a 925 and his is 850

So I don't understand the jump in mine so quickly and yours hasn't raised. I'd pay the medical bills and look into that cable bill

KateHorrell
by New Member on Jul. 8, 2014 at 10:16 AM

I'm not sure how much your "financial advisor" told you about how credit scores work.  Without seeing your whole report, it would be hard to answer specific questions.  However, a car repo and several unpaid bills (the ones your advisor told you not to pay) would certain explain a 600ish score, even if you are doing everything else right.

About 35% of your score is made up of payment history.  Past performance is considered a solid indicator of future performance.  In some odd way, then, having dings all at once isn't as bad as having a ding here and a ding there.  A cluster looks like something happened, a pattern looks like you just don't have your act together.  From your explanation, many of the negatives (repo) on your report will be dropping off soon and you've done a good job in recent years.

About 30% of your score is based on credit utilization.  This is how much of your credit you use.  You're doing well to keep it in the 30% range, but the highest scoring FICO customers either pay their balance in full each month, or keep their  revolving credit utilization ratio under 10%.  I would encourage you to pay off your credit cards as quickly as possible, and use them as little as possible.

About 15% of your score is based upon the length of your credit history.  This means how long your oldest account has been open, and also the average age of all your credit accounts.  If you closed all your accounts at your divorce, and opened all new ones, you're going to have a very short length of history.  Only time will cure this.

About 10% of your score is based upon the amount of new credit you have.  "New" is relatively subjective, but having newer accounts is considered a risk factor because it is assumed that you opened the accounts because you needed access to $$.  Again, if your credit accounts changed at some point, such as after your divorce, then only time will fix this.

The last 10% of your score is based upon your credit mix.  It sounds like you are good with a mortgage, car loan, and credit cards.  3-4 revolving credit accounts is considered idea.

The five biggest things that will cause your score to drop are:  maxing out a credit card, 30 day late payment, a debt settlement (I think the car repossesion will go here), foreclosure and bankruptcy.

Most negative information comes off of a credit report after 7 years.  Since you are so close, I think that you should probably just wait it out.

Without knowing more details, I can't speak to the debts you didn't pay.  If they, too, are close to coming off, it might be better to just let them go.  Any action on those accounts could reset the 7 year clock.

Good luck to you.

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