Credit Scores

[bjgrazi]

Does anyone know what a good credit score is? I always thought it was over 700? Any information?

 

[EsmeraldaX]

I think average is around 650 or something. Mine's like 500 and mines really bad. So 700 is probably really good.

 

[ducklite]

Over 700 is fine. For conventional mortgage purposes they generally don't write anything under 620. Anything over 800 is awesome. When I was a loan officer most "great loans" had scores in the mid 700's to low 800's. The average was mid 600's to low 700's. The highest I ever saw was an 880.

Due to vagarities of the system, you'll usually get a different score from each of the three reporting bureau's, they usually throw out the highest and lowest and use the middle one for lending purposes.

Anne

 

[EsmeraldaX]

Do even the "we'll give a loan to anyone" mortgage people not lend to people with scores below 600?

 

[Toby'sFriend]

This is the current table from http://www.Myfico.com Esmeralda. These are for a $150,000 mortgage

Your FICO®
score Your interest rate Your monthly payment


720-850 6.26% $925
700-719 6.39% $937
675-699 6.93% $990
620-674 8.08% $1,108
560-619 8.53% $1,157
500-559 9.29% $1,238

 

[EsmeraldaX]

Yikes. No home for me.

 

[cheshirekitty]

It depends on what you are using it for...mortgage, car, credit card....

620 is average for mortgages...anything over 700 and you can pretty much get the best interest rates

 

[CindysGusGus]

How fast do they fluctuate. If you did really well with your credit and were at a 500 how long does it take for them to typically come up?

 

[RachelEllen]

Depends how long it is until the bad things drop off.


If you're worried, get a copy of your report and see what is dropping your score. If you go to one of the company's site (e.g. www.equifax.com), you can order a score report with FICO from all three for about $40.

I always assumed I had 'perfect credit,' but when we prepared to get a mortage, my score was in the mid 600's. Part of this was an error, but even that took 2 months to get removed. That knocked my score up to 720, but even with no late payments ever, you lose points for how long your history is and how many credit cards you have ever had (anyone do that thing where you pick up the store card for the discount and and then cancel it. I stopped after I saw how it affected my score.) The final irony is that you lose points for how many times your credit report is pulled, so don't go raising your credit limit on cards or checking your score too often. Little things like that can take a long time to drop off.

If you've got some big bad things like recent late payments, you may be looking at years until you have a good score. Most of the better reports (about $10 each) come with a nice explanation of what you can improve.

 

[bjgrazi]

I'm not worried at all. I have excellent credit. It was a discussion we were having in work. I was curious and knew I could get all my questions answered, because you guys are the best.

 

[RachelEllen]

Aren't they? I wish more people would spend time reading and chatting with people with such a variety of viewpoints.

Fair enough if it's a theoretical discussion, but please don't assume (and hear I am assuming you are assuming which could be way off base) you have good credit just because you have never made a late payment.

I made that mistake and almost didn't have time to fix a screwup which could have cost us a mortgage. (I had closed a credit card a year previously and there was a mistake crediting the final payment. It ended up 24 cents short! Which multiplied into a few dollars after several months. I didn't get any more bills but it was reported for collection. When I found out, I called them and they cleared it up immediately /but/ they did not remove the reported late payments to the credit services. ) It took weeks of faxing and calling to fix that, and it cost me almost 100 points off my score.

That's how I found out about all those silly things that lower your score that might never know about.

To specifically address your first question, as far as mortgages go, there's not much advantage after you get above 700. But it's a huge drop off below that. Scores can also fluctuate by a few points each reporting period, so a 703 score can be just as bad as a 698.

Rachel

 

[LuvTigger]

I just wanted to add a comment for anyone who might be considering purchasing a new car, and this is just based on what the person who sold me my car said back in November (this is at Saturn).

They were offerring 0% on the model I bought, and when we were discussing down payments, he said that usually they don't ask for a down payment for anyone who has a credit score over 700 (mine was high 600's at the time), and I think he said to qualify for the financing you needed something like 620. So anyone below 700 and above 620, they were only asking a down of at least enough to cover taxes and fees (about $1000). (I'm not sure what happens for people below 620 though, I just assumed that they didn't qualify for the 0%, but not sure about a higher percentage.)

Very insightful thread, thanks to everyone who commented!

 

[ducklite]

One other thing about the 0% at Saturn--they had financing available through two sources. Chase and GMAC. At the last minute I decided to buy a new Saturn with this incentive, and told them if they couldn't put me through GMAC there was no deal--we've had less than satisfactory experiences with Chase on our two previous cars and a credit card.

They told me that if a credit score was high enough it could go to either place, but it would be "assigned" if it was under a certain point. So keeping your credit score up can not only help you get credit, but get it from where you want it and at the most favorable terms

I got the GMAC deal I wanted and now have a shiney new red ION Quad Coupe

Anne

 

[elgerber]

Originally posted by EsmeraldaX
Do even the "we'll give a loan to anyone" mortgage people not lend to people with scores below 600?

Yes they will. I am a loan processor, and lately I swear half of my loans have been people with scores in the low to mid 500's. You will pay for the low scores with higher rates, and pre-payment penalties. We have even had a few applicants with mid to upper 400's lately, them we have not been able to do much for.

Erika

 

[Jenn Lynn]

If a Credit Card account says Revolving does that mean it is still open?

 

[elgerber]

No, revolving just means the type of account. All credit cards are revolving, meaning your payment and interest are re-calculated each month on the balance. Installment are fixed payment loans. If the accounts are closed, they should say closed by consumer or paid in full and closed or something to that effect.

Erika

 

[ducklite]

Originally posted by Jenn Lynn
If a Credit Card account says Revolving does that mean it is still open?

Yes, there are basically two types of credit lines, revolving and installment (plus real estate, that's a different entity in itself).

If it's closed it should read "Account closed, Paid in full". It's best if it reads "Account closed at request of borrower, paid in full" or something alon those lines. In the case of revolving debt, it can read "Account closed" but still show a balance, as you can close a charge card and still be making payments.

Anne

 

[shelbyjosh]

I think when we re-fied last summer our FICOs were 800+. I remember the loan officer saying we had great credit.

 

[EsmeraldaX]

When I was in my early 20's (23, 24 maybe) I had a store credit card. It had a balance of $21 which I paid in cash at the store.

The clerk pocketed the money.

So being stupid I thought i would wait to pay until I got the stupid people at the credit card to do the right thing. Well , eventually it was written off.

It haunts my credit even now.

I have not had a late payment on anything in 5 years. Before that I had some serious problems.

Also come to find out my mother has me as a co person on one of her cards that has a balance almost as high as my yearly salary. I suspect this is hurting me too, as it shows up on my credit report and I am often turned down because "my outstanding balances are much higher than my salary".

I have about 7K debt of my own which is still high, but it was either go into debt or starve at that point of my life...not that any loan officers will care about the reasons WHY I still have that debt.

 

[wdwpluto]

Originally posted by RachelEllen
The final irony is that you lose points for how many times your credit report is pulled, so don't go raising your credit limit on cards or checking your score too often. Little things like that can take a long time to drop off.

I thought (and maybe I'm wrong) that when you pull your own report (to check for errors, etc) it doesn't affect your score. But when a potential lender pulls your report that's what affects your score? Anybody know for sure?