What is up with credit scores?

Muskrat said:
I do not have any debt….so how do they calculate the score?
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They use data from years back.

It's possible you have an outstanding balance from 20 or more years ago.

It's possible someone signed your name as a co-signer on a loan or credit card or a major purchase, like a car. That's what happened to me; I divorced in the early 80s, and my ex-wife signed my name on a car loan, a credit card, and a few rental leases (she knew my social security number).

That kept my credit score down for years, and I had no clue until Experian sent me a letter that listed all the companies and amounts I owed. The ex caused me to be responsible for over 10K in unpaid balances...10K in 1990s money.

I had to file bankruptcy, which, of course, effected my score for several more years. But the judge believed me about the ex-wife, so I felt vindicated, and that was a good feeling. Also, he only allowed one of the creditors to tap into my savings. It was for my daughter's $40 youth bed that she was still sleeping on. Her mom bought it for her 3rd birthday with a credit card she got by using my info.
 

Murrmurr said:
They use data from years back.

It's possible you have an outstanding balance from 20 or more years ago.

It's possible someone signed your name as a co-signer on a loan or credit card or a major purchase, like a car. That's what happened to me; I divorced in the early 80s, and my ex-wife signed my name on a car loan, a credit card, and a few rental leases (she knew my social security number).

That kept my credit score down for years, and I had no clue until Experian sent me a letter that listed all the companies and amounts I owed. The ex caused me to be responsible for over 10K in unpaid balances...10K in 1990s money.

I had to file bankruptcy, which, of course, effected my score for several more years. But the judge believed me about the ex-wife, so I felt vindicated, and that was a good feeling. Also, he only allowed one of the creditors to tap into my savings. It was for my daughter's $40 youth bed that she was still sleeping on. Her mom bought it for her 3rd birthday with a credit card she got by using my info.
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Pertinent laws have changed since my experience, no doubt, but it's a good idea, @Muskrat, to get a complete credit report. Seems obvious some balance is owed to a creditor you don't even remember. Or someone borrowed your info.
 
When I tried to get my credit limit lowered at a major store, they wouldn’t do it, so I told them to close the card. I don’t like a card floating around that I don’t use. The last thing I’d need is a hacker getting ahold of that info. She was annoyed that I refused to keep the account open and said my credit rating would be going down. It did.
 
When I was a lot younger, I didn't have bad credit but too much credit. I had 4 pr 5 credit cards and I would borrow from Peter to pay Paul so to speak. I had no one to turn to if I needed emergency funds. A nurse I know told me about an organization called Consumer Credit. I paid them a miniscule amount a month for their services. They then told me how much a month I needed to give them in order to get all my bills paid off within a certain amount of time. I think it was something like $700/mo for 4 years. That was back in the 70's. I've since matured and learned how to manage my money better. It's been several years, that my credit score has been under 800.
 
Jules said:
When I tried to get my credit limit lowered at a major store, they wouldn’t do it, so I told them to close the card. I don’t like a card floating around that I don’t use. The last thing I’d need is a hacker getting ahold of that info. She was annoyed that I refused to keep the account open and said my credit rating would be going down. It did.
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I keep two credit cards.

One uses Fiserv and one uses the Fis payment processing system.

I’m not sure that it makes much difference but I feel that it gives me a bit more protection in the event that one of those payment processing systems goes down for some reason.
 
My credit is locked…so I do not worry about anyone initiating a loan in my name using my credit history. My scores are always over 800…just do not understand the fluctuation up and down. I haven’t owed a penny for over ten years…and those were mortgages. So it seems if I use my credit card more it goes up???? I always pay the balance off each month…have never paid interest.
 
It's ridiculous. I pay off my credit card balance in full every month, but for some reason if I carry a higher balance than usual my credit score goes down. Then after I pay it off it goes back up. Seems like they could track a year's worth of activity and see that I've always paid off the balances.

The only reason it matters to me is that Hubby's cars are leased and the loan interest rates are lower with a higher credit score, so I usually take out the loan. I'm in the low 800's. He's in the high 700's. His lease is up next May and I just need to make sure my credit card balance is low. :oops:
 
Murrmurr said:
That doesn't explain why my recent Experian reports still have a couple things on it from the 80s.
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I don't doubt you, but I can't imagine why there are still a couple of things from the 80's unless they were unresolved.

My identity was stolen in the early 80's, when I was living hand-to-mouth, and the culprits were buying appliances and jewelry and set up "Middleman Enterprises" where they sold cars. It was only after I started receiving bills from Best Buy and Zales that I became alarmed. The FBI became involved and I was asked to watch a video of a couple of guys from a jewelry store purchasing items. I didn't know them.

Anyway, a freeze was put on my credit and I couldn't write checks for an extended period and even had trouble renewing my driver's license. My point is, if I went through all this, why wouldn't there be any items on my credit score? Why are there still on yours? You really need to dive into this.
 
seadoug said:
I don't doubt you, but I can't imagine why there are still a couple of things from the 80's unless they were unresolved.
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There are companies that buy debt...actually a fairly lucrative business. As new owners of a debt that now falls under their company's name, it's considered new and collectable for another 7 years, or whatever.

That's my guess.

These companies buy debts that are getting close to the charge-off date. For pennies on the dollar.

seadoug said:
My identity was stolen in the early 80's, when I was living hand-to-mouth, and the culprits were buying appliances and jewelry and set up "Middleman Enterprises" where they sold cars. It was only after I started receiving bills from Best Buy and Zales that I became alarmed. The FBI became involved and I was asked to watch a video of a couple of guys from a jewelry store purchasing items. I didn't know them.

Anyway, a freeze was put on my credit and I couldn't write checks for an extended period and even had trouble renewing my driver's license. My point is, if I went through all this, why wouldn't there be any items on my credit score?
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I don't know. Maybe they're no longer collectable in any way, like because they were charged off or they're over 7yrs old.
seadoug said:
Why are there still on yours? You really need to dive into this.
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I'm guessing the debt keeps getting passed around in the way I mentioned. It's debt on a piece of property Shelly bought with a $4700 loan (shortly before she died in a car accident). She was going to buy a used mobile home to put on it.

I haven't looked into it in a long time because my financial advisor advised me quite a while back that it's nothing to worry about. But yes, I should talk to him about it...I mean, I will. Maybe (probably) he doesn't know it's still on there.
 
seadoug said:
It's ridiculous. I pay off my credit card balance in full every month, but for some reason if I carry a higher balance than usual my credit score goes down. Then after I pay it off it goes back up. Seems like they could track a year's worth of activity and see that I've always paid off the balances.

The only reason it matters to me is that Hubby's cars are leased and the loan interest rates are lower with a higher credit score, so I usually take out the loan. I'm in the low 800's. He's in the high 700's. His lease is up next May and I just need to make sure my credit card balance is low. :oops:
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I was advised that a certain amount of debt is beneficial, and credit scores are not as impactful as most people believe. When a bank or loan company checks your credit history, the type of things you borrowed for is as important as the balance you owe and the regularity of your payments. And for some lenders, it's more important.

Owe $40K on a home improvement loan and missed a few payments? Awesome!
Only $100 to go on a stereo system and never missed a payment? Booo!

I made that up, of course, but that's basically how it works. The type of stuff you owe on is very important.
 
@seadoug

Also, where it comes to beneficial debt, age is a big factor. A 23yr-old owing $20K is bad, while a 60yr-old owing $100K is good.

Maybe that has something to do with life-insurance, I don't know. More likely it has to do with interest.
 
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Aunt Bea said:
I keep two credit cards.

One uses Fiserv and one uses the Fis payment processing system.

I’m not sure that it makes much difference but I feel that it gives me a bit more protection in the event that one of those payment processing systems goes down for some reason.
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I have two CCs too. When I applied for a third as a CC to use when buying online, I was declined. They re-crunched their info and gave me that other card.
 
When I worked in banks and credit unions we would pull a credit report to go with every loan application and run a little program on our computer to give us our own credit score. It wasn't the biggest deciding factor, for that we needed a paystub and proof of working steadily for three years.

We had our own credit card that relied a lot on the credit report. We really wanted to see if payments were made on time or old bills still outstanding. Those were the things that were flagged and kept on the credit report for years.

I always hated to turn down a credit card application, the lowest limit was only $500, but it helped that I was able to tell them that I, myself, had been turned down in spite of having worked for them for five years and having $20,000 in my savings account with them. Why? Because no credit history is bad credit history and I'd never had so much as a Penny's charge card. My advice to customers like me (usually very young) was to get those store cards. The stores are willing to take a chance to get your business. Banks, not so much.

All loan officers are looking for two things; ability to pay and willingness to pay. Someone can have a good job and money in the bank and still be a real slacker about paying those bills on time.

So if you want to improve your credit, get a charge card wherever you shop a lot, charge everything and always pay your bill each month.
 
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