The New Credit Score Rules

[Cat Damiano]

If you only read one article about credit scores this year, read this one.

The average credit score nationwide is 666, according to CreditKarma.com. That's not only an ominous number, but can be a costly one.


Based on CreditKarma.com's data, the trend amongst lenders shows that a 660 credit score is the threshold to be approved for a mortgage, auto loan and unsecured credit card. Digging deeper into consumers' credit health, nearly 40% of consumers have a credit score below 660. That means 4 out of 10 Americans would likely be denied for a mortgage and auto loan, charged sky-high interest rates, and only qualify for a secured credit card.



new-credit-score-rules-forbes: Personal Finance News from Yahoo! Finance

[freedomwon]

Hi Cat - You beat me to it. And it's on a sticky no less! Very Nice! Article is definitely a good read. I will say that I recently signed up at Free Credit Score & Credit Report Card. No Credit Card Needed for FREE & found the simulator portion very interesting. For instance I learned that by opening a new card & doing a balance transfer it will increase my credit score by 40 points!

[Cat Damiano]

LOL...........

That is really interesting that the score would increase by 40 points that is pretty significant and a good tip, thanks for sharing that.

[noonie]

I just wanted to share a thing that happened today. I got a call from Sears (a card I paid down to $0 balance, but DIDN'T close a few months ago), "offering" to send me a free copy of my credit report and pitching a credit monitoring service to "prevent identity theft." I said no thanks, I already have credit monitoring, and he was pushy and asked me to take a look at the materials. I said.. NO, you do NOT have my permission to run/pull a credit report on me, and he promptly hung up. I know good and well that they just want my blessing to run my credit report so they can snoop and use our default/foreclosure as an excuse to close my credit account. I also don't want the FICO drop a credit inquiry causes. In general, how long do I have to charge something small to keep the card/line open before they close it for "lack of activity?"

[Cat Damiano]

noonie,


Each card would be different, Sears is a CitiBank card I believe and it may say something regarding this in the updated user agreement that they had recently sent out.

[bcabo]

I am really late to the game on this one. I paid off a WF Visa a couple years ago. After a year of not using it, they closed it due to inactivity. From talking to other people, it seems about a year is the norm.

[DrDrew]

How is this possible? My house was foreclosed on November 17. We're thinking of moving to a new city, so I decided to check my credit score today to see how it might affect rental options... My scores during the delinquency/foreclosure were running into the low 600s I think... Now I'm at 750-760. I'm not complaining...but Is that possible? Is there some other score I should be looking at rather than Experian/TransUnion/Equifax?

[Cat Damiano]

DrDrew,


Those are the three bureaus input that make up the FICO score. The following article explains more about how that number is calculated and what type of history goes into it;

How credit scores work, how a score is calculated (Page 1 of 3)

[DrDrew]

It's fascinating... so I've had great credit for over 20 years... I have a good mix of credit... I use my credit cards but not too much... my student loans and auto loans have always been paid... I paid off one other mortgage... the only 'problem' on it was my foreclosure... and I'm only 60 points down from where I was the day before I missed the first payment. What was the worry about? Yeah, I can't buy a house for the next few years, but...

[interesting...]

the credit rating agencies are on crack lately... the only negative I have on my record is "no negatives". They actually listed that as bringing down my score. Sorta bizarre if ya asks me.

[shayl475]

It's fascinating... so I've had great credit for over 20 years... I have a good mix of credit... I use my credit cards but not too much... my student loans and auto loans have always been paid... I paid off one other mortgage... the only 'problem' on it was my foreclosure... and I'm only 60 points down from where I was the day before I missed the first payment. What was the worry about? Yeah, I can't buy a house for the next few years, but...

Same here, my score only down 54 points from the almost 800 score I had before foreclosure. Sure not enough for all of the sleepless nights I spent. Life is really good now and all I can say is why did we wait so long?