Why do I have a low credit score???

It's because you are ugly.

You used "late payments" and "responsible" in the same post. Avoid late payments in the future, be more responsible. Maybe finance a car and be good about paying that off.

I just bought a car, paid 8k in full. Why pay interested?

3 late payments in 10 years happen. You mean to tell me that you hadn't forgot about a payment every now and again?

Poor credit score?? wrote:

According to my credit score I have 776/990. And that is a grade of a "C" and I rank about 49% better then others.

A perfect credit score on the nearly ubiquitous FICO (Fair, Isaac, and CO) scale is 850. 776 would be very good.

You should request a copy of your credit report from each of the three major credit bureaus. That will show you which items are recorded and which will be counted against you in any credit score.

The score I was given was based off of a 990 scale....

Vantage scores are out of 990.

As you can see from the prior link, vantage bases almost 2/3rds of your score on your physical attractiveness. Sorry, but homeowners don't want uggos having access to mortgages.

Poor credit score?? wrote:

The score I was given was based off of a 990 scale....

Look here:

That still doesn't tell you what underlying data is affecting your score. To do that you will need to order a copy of your credit report. It is free.

First of all, FICO only goes up to 850, not 990. Your score of 776 is in the VERY GOOD range. See here -

Your problems:

1) Too many cards.

2) Too many cards opened and then closed in last 10 years.

3) You carry a balance on one of them (need to pay that off).

4) You didn't mention any other loans. Credit cards are what is called "revolving credit" and is only part of what makes up your credit score. You pay a mortgage every month and have paid off a car loan, student loans, etc., then your credit score goes up.

5) A credit score doesn't tell anyone how responsible you are. The MOST responsible person would NEVER have a loan ever and would have a score of ZERO. A credit score is an "I love debt" score. Your score comes from 35% payment history, 30% debt level, 30% length of credit history, inquiries 10%, mix of credit types 10% (this is one thing keeping you down).

My FICO score is 842 (possible high of 850, but really 842 is considered perfect), but I'm 44 years old, have never ever paid a bill late, pay my credit card balance (always in full) a couple days early each month, never get even close to 30% of my credit limit (which is a magic number for FICO), have been paying a mortgage on time since 1999 and have paid off two student loans and three car loans since college.

Ultimate goal is to not to have a mortgage payment anymore beyond age 50, and at that point I will only have revolving credit with credit card balances that I pay off each month in full. My FICO score will eventually drop then because I will no longer have a mix of credit types that I "manage well". I do not plan to ever borrow money again though once the house is paid off...just no need to.

You sound like you are pretty responsible. You just need to understand that in many ways the Credit Score is a game. To play the game well, you need to understand the rules so you can maximize your score.

Check out the link posted by NoFatty (http://en.wikipedia.org/wiki/VantageScore). It breaks down the components of your score.

There are some differences between the VantageScore and the FICO score, but they're more similar than different.

The biggest component is "Payment History". 32% of your score. With 3 late payments, you're likely getting killed here. 99% on-time doesn't cut it. Being timely from here on, and letting those late payments age and eventually fall off is the only option.

23% of Vantage score is "Credit Utilization". This is overall utilization (of which you are fine, at 5%...$2k of $40k available). Also though, high utilization of individual cards can hurt you. So, if that $2000 balance is more than 30%, 50%,70%, or 90% of that card's limit you are going to get hurt here. Paying the balance down, or increasing the limit on that card so you are using less than 30% of the limit should help your score.

13% is "Depth of Credit", or length of credit history. The older your active accounts, the better. If you closed older accounts and kept newer ones, you screwed yourself here. Also, it is often the average age of accounts, so if you have one old account, and 4 newer ones you will score poorly.

** FICO also gives you a higher score if you have a variety of credit in your history (credit card, car loan, mortgage, etc..). The more variety, the better for your score in this category.

10% is "Recent Credit". If you have any inquiries, or new accounts in the last 2 years, you'll hurt this part. The more inquiries, the more you get hit. For example, I think each new inquiry hit my FICO score by 2 pts each. 5 new inquiries dropped it 10 points.

7% is "Available Credit". This is unique to the Vantage Score, and not a factor in FICO. It looks like by having access to $40k of credit that you could spend tomorrow you are hurting yourself here too.

My credit score is not FICO, I received it from TransUnion. They use the new credit score of 990.

I paid for my car in full with cash, 8k.

I have student loans and I have been paying off on time. I have paid off 2 of my 4 student loans.

No home payment.

NoFatty wrote:

http://en.wikipedia.org/wiki/VantageScore

Vantage scores are out of 990.

Ah. I see...Vantage...a FAKO score.

Flagpole, see above regarding Vantage score. The OP's 776 out of 990 (not 850) is from Experian. It is not a FICO score. So, it is not very good.

G. Chocolatesauce wrote:

Flagpole, see above regarding Vantage score. The OP's 776 out of 990 (not 850) is from Experian. It is not a FICO score. So, it is not very good.

Yep. I saw that later. A FAKO score. The OP needs to stop carrying a balance on that credit card, should go down to 3 cards MAX and then just keep paying everything on time over time. OR decide to save up money and quit getting loans. When it's time to buy a house, there's always manual underwriting.

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.) First, the 3 cards MAX must be your own personal rule, because there is ABSOLUTELY NOTHING in the credit scoring process that validates this part of your advice. It might be good advice for personal finance, but not for credit score.

If the OP has kept their older accounts open, your advice to close all but 3 could actually HURT their score (credit length category).

An advanced technique, If the OP could and wanted to manage it, to improve the score would be to keep ALL the accounts open, make a single charge on each account each month (to show usage), and then pay if off each month. Effectively, they would be piling up on-time payments x 7 accounts each month, which would help minimize the damage from the 3 late payments currently showing.

I'd only spend time on something like this if the OP was planning on getting a mortgage in the next couple years. Otherwise, probably not worth the effort.

2.) Secondly, even if a person never gets a loan, their credit score is worth paying some attention to. Scores are often used for other stuff like insurance rates, and sometimes job screening by certain employers.

Leaving that many credit cards idle HURTS your score. As the poster above notes, it is better to use the cards for small purchases every month and to pay them off.

Also, you buying a car and paying it off immediately doesn't help your credit score. Making payments on a loan for a car would have. People should realize that lenders are more likely to lend you money if you have a solid history of paying your bills on time, BUT paying interest. Paying everything off at once is smart for your personal finances, but do you really think a lender prefers to give money to someone who they can't make interest on?

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.

No, I don't forget to make payments. It is called being RESPONSIBLE!

Poor credit score?? wrote:

I just bought a car, paid 8k in full. Why pay interested?

3 late payments in 10 years happen. You mean to tell me that you hadn't forgot about a payment every now and again?