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Why do I have a low credit score???

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  • registered

    Flagpole

    Member since 03/14/2003.

    35,438 posts. Last post 1 year ago.
    15 years ago 02/13/2011 10:23pm EST
    re: random a hole

    random a hole wrote:

    Flagpole wrote:

    My FICO score is 842 (possible high of 850, but really 842 is considered perfect)

    So just that 842 is the perfect score? So is it a whole range of "perfect" scores? What is that range and where do you get this info?

    1) Scores close to 850 are considered "perfect", and in fact it is nearly impossible to get an 850. The scores have nothing to do with BEING perfect. You have to have the right amount of debt, the right kinds of debt, etc. In my mind, a PERFECT score would be ZERO (indeterminable).

    2) I found out my score recently when I was buying a car -- the dealer looked it up for me because they thought I was going to finance the car.

    3) You can look up your credit REPORTS (from 3 different bureaus) for FREE once every 12 months here -

    https://www.annualcreditreport.com

    . The reports tell you if you're in good standing with your accounts, how many accounts you have opened (allowing you to see if someone has stolen your identity), etc. They then give you the OPPORTUNITY to BUY your score for $7.95 I think it is.

  • registered

    Flagpole

    Member since 03/14/2003.

    35,438 posts. Last post 1 year ago.
    15 years ago 02/13/2011 10:28pm EST
    re: trust but verify

    Idle cards hurt your score brother. It's not a good thing to have 10 cards with a TON of credit on them...even if you're not using them...this brings up risk. It's a tricky thing. A good score NEEDS you to have some debt, and wants you to have credit...just not too much credit or too much debt.

    trust but verify wrote:

    I'm not so sure that the idle cards hurt the score, but it doesn't help it as much as having the frequent activity.

    OP, I've also seen getting a small loan for the sole purpose of getting that kind of account on their history. For example, take a personal loan for $2000. Then, immediately pay off at least 50-75% of the loan. (This way you don't get hurt for having over 30% or 50% "utilization".) You might be able to do the same thing for your used car. My credit union allowed me to do it, even though I'd already bought my car with cash.

    Then, make the monthly payment until you've paid it off. Don't pay it all off right away. The benefit comes from 1.) having the account on your history; and 2.) showing a history of making on-time payments.

    You'll pay a bit in interest for the loan, but if it enables you to get a much better mortgage rate, you'll benefit in the long run.

    Don't do this if you'll need your credit in the next year, because you'll take the hit for the new account.

  • trust but verify

    Anonymous Poster

    15 years ago 02/13/2011 11:09pm EST
    re: Flagpole

    Flagpole,

    You are wrong on this. Idle cards absolutely do not hurt one's FICO score. I have 24 credit cards. One is my daily spender. The other 23 cards are idle, and have had a $0 balance, and $0 usage for over 3 years.

    My credit score has benefitted from having the cards. I have a higher credit score than you.

    You are wrong, brother.

    (I do believe that having a bunch of available credit and idle cards can hinder one's ability to get favorable terms on new loans, but it does not negatively affect the credit score at all).

  • paying interest

    Anonymous Poster

    15 years ago 02/14/2011 12:13am EST
    re: Poor credit score??

    I'm going to answer from my gut since others clearly understand the nuances of credit scores much more than me.

    If you were my close friend and asked me for a $1000 loan after telling me your history with credit cards, I would give you the money while harboring a very strong feeling that I might never get my money back.

    You are carrying a $2k balance on a credit card. The APR won't stay at 0% for very long. Do you know the date that the APR jumps to at least 10 points? I would buy that $2000 debt in cash right now from your cc company if I could preserve the terms of your credit card.

    Why on earth are you carrying 7 credit cards with a $40k money line? That sounds plainly irresponsible. Sorry, but 3 late payments in 10 years is probably very responsible compared to many credit card users, but does not get you an 'A' for responsible spending. I understand that life intervenes, but many people never make late payments on credit cards.

    Finally, the fact that you are looking at your score raises a flag about your financial responsibility. Are you trying to take on more debt while you are carrying a balance on a credit card?

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