latone

please can someone answer this i've been in the usa 6 mths i have a credit card ,macy's card and just got an auto loan,the credit card i share with my husband i'm the main holder,i went to equifat to check if there was any credit score for me i have a score of 710 the auto loan not shown may be to early i've only made one payment so far. my husband score is 746 only showing the credit card details he is not on my macy's card he still works in england,my questions are our scores ok, how come his is higher i'm the main card holder, when my auto loan goes on will my own drop initally until a couple payments? i was expecting to see o score i do pay my bills on time and pay my credit cards in full most times equifax said the only neg bit is my short history, please reply my aim is a mortgage.

Bob

I believe a high score is good...anything over 650 ain't bad, well you start getting good rates at least.

dbj1000

That's correct - 650 is an "average" score, over 700 is good and over 750 is excellent.

Pulaski

The FICO score is not a straight forward calculation - and among the factors included is the unused credit you have access to. If you have a lot of available but used credit (lots of credit cards, or high limits) it will reduce your FICO score even if you only have small outstanding loans and credits.

latone

can you explain the above to me i don't understand

Bob

There was a link somewhere here that was a FICO score calculator, well it came up with the gist of it.

Here it is, it's a good guide I guess.
http://www.bankrate.com/brm/fico/calc.asp

Pulaski

The FICO score (i.e. your credit score) is a complex calculation, using numerous factors and weightings to come to a single figure. The one thing that I know is included is your unused credit.

Many people think that if they have access to lots of credit they must surely have a high credit score. Not so! If you have access to lots of credit (typically credit cards and store cards) that you aren't using then that is a bad thing. Imagine you have current loans and credit card balances of only $5,000, but you have, say, eight credit and storecards each with $5,000 unused credit limits. You could go from total loans and credit of $5,000 to $45,000 without going through any further application processes or credit checks. That makes you a risky propositon, and as such it hits your FICO (credit) score.

fatbrit

Your Fico scores are built on a very short credit history. The main influence of the short credit history is that they will be very sensitive to any change in your credit history (i.e. when the car loan is recorded at the credit bureau, your FICO will drop sharply).

Be aware that the FICO is only one of the factors the underwriter takes into account when giving the yea or nay (Q: What's the difference between a hijacker and an underwriter? A: You might be able to negotiate with a hijacker!). They will probably be refusing prime credit to you for a couple of years because of "insufficient history". There's nothing you can do about this but hold on in there, pay your bills, don't mess about with your credit, and let the clock keep ticking.

For your mortgage aspirations, most of the rules about credit go out of the window. For example, with 20% down you'll manage to get a mortgage with no credit history and no documented income. Of course, the interest rate is going to be a long way away from prime. If you want to be on the prime side, a 2-year credit history is usually a must, though you can usually get a pretty competitive rate with an FHA which will only require one and might be worth investigating if the property bug has bitten you.

anotherlimey

From the bottom of my Experian credit report;

What factors raise your credit score:

# You've paid your bills on time and currently do not have any overdue accounts or derogatory information, such as a collection, charge-off, or bankruptcy, on your report. You can be proud of the fact that you are helping yourself maintain a good credit score, so continue with the positive credit behavior!

# Your credit report does not contain negative public records, such as a bankruptcy, lien, lawsuit or judgment filed within the last two years. This is having a positive impact on your credit score. Although public record items may remain on your credit report for seven to ten years, depending on the item, an important piece of your credit history is paying your bills on time, every time.

What factors lower your credit score:

# On average, many of your accounts have been open less than three years. Having long term credit accounts that you consistently pay on time is an important indicator of stability to lenders. Over time, your score should reflect your longer credit history.

# Your overall balances are close to your overall credit limits, which may be lowering your score. Having high credit limits shows lenders that you are responsible with your credit, but you should increase the cushion between your total debt and your limits. By paying down your balances, lenders are not as likely to perceive you as becoming overextended. This may have a positive impact on your score.

# At least one or more of your accounts has a balance that is close to your credit limit, which may be lowering your score. When your balance is high, this can indicate to lenders that you are likely to overextend yourself. Try to concentrate on increasing the cushion between your credit balance and your credit limit to positively impact your score.

Hope it helps someone,

-tom