What Is A Good Credit Score?
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Ever wonder what a good credit score is?
You can check your score at a variety of places that offer free FICO credit scores but how do you really know whether your score is good or bad? Is a 700 good? Or do you need an 800? How’s a 600?
I think it comes down to what you plan on doing with that number.
(If this post looks familiar, it’s because it was originally published earlier this year. I brought it back because a lot of people have been emailing me about their credit score and, in short, kind of freaking out. This post explains why your score might matter and how it only pays to focus on it so much…)
FICO credit scores range from 300 to 850, with the average being 680 – 700, depending on which of the three credit bureaus you ask. FICO stands for Fair Isaac Corporation, which is the company that created the FICO credit score formula. I wrote an entire Foundation article on FICO credit scores if you want a primer on the subject.
You will be able to find someone to give you a loan regardless of your credit score. You might have to put down a larger down payment and pay a higher interest rate, but even if you have the world’s worst score of 300, someone will give you a loan – you’ll just pay dearly for it.
So, what’s a good score then? It depends on the loan you’re trying to get. Here’s what myFICO lists as sample FICO scores and potential interest rates:
30 Year Fixed Mortgage Rates
These are sample rates on a $300,000 home mortgage.
| FICO Score | APR | Monthly payment |
| 760-850 | 4.460% | $1,513 |
| 700-759 | 4.682% | $1,553 |
| 680-699 | 4.859% | $1,585 |
| 660-679 | 5.073% | $1,624 |
| 640-659 | 5.503% | $1,704 |
| 620-639 | 6.049% | $1,808 |
On mortgages, it doesn’t really matter if you have a 761 or the perfect 850. According to Fair Isaac Corporation, the creator of the FICO score, the two are pretty much the same when it comes to mortgage loan interest rates. It’s a gross simplification but the point is you don’t need a perfect score and it’s almost impossible to get a perfect score.
Let’s look at auto loans:
36 Month Auto Loan Rates
These are sample rates on a $25,000 auto loan.
| FICO Score | APR | Monthly payment |
| 720-850 | 6.039% | $761 |
| 690-719 | 7.587% | $779 |
| 660-689 | 8.980% | $795 |
| 620-659 | 11.738% | $827 |
| 590-619 | 15.483% | $873 |
| 500-589 | 16.140% | $881 |
According to Fair Isaac, the ranges for auto loans and FICO scores is even wider. If you have a 720 or higher, you can expect to pay the lowest rates. Again, it’s a gross simplification but I think you get the idea.
If you aren’t getting a loan in the next year, knowing your score is useful but not immediately valuable. If it’s low, as in outside the first three tiers, then I’d work to try to improve it. If you are getting a loan, knowing your score is crucial because you want to know if you’re a few points shy of the next tier. If you’re close, you want to work to get yourself into the next tier so you can pay a lower interest rate.
(Photo: thetruthabout)
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I would just like to add that any lender will look at more than just your credit score, they’ll look at your ability to repay whatever your loan may be. Keep in mind that just because they’re willing to lend you the money doesn’t mean that you can afford it. Best of luck.
They should, but most of them are “FICOmonkeys”. Due diligence takes time, money and effort that too many lenders are simply unwilling to expend.
I was just thinking about my credit score today. My employer, a large defense contractor, sends me overseas for 4 – 5 months out of the year and my expenses are near nonexistent while deployed. During my last deployment one of my two credit cards was canceled from lack of use over the years leaving me with my 12 year old Discover card and a bank debit Visa card. My Fico score dropped from 760 to 720, somewhat upsetting since I plan to purchase a home soon and want that best rate as outlined in the article.
Fair Issac my butt. I’m 30, never once missed a credit card payment. Never had a utility or even video rental late payment. Never had student loans but graduated from a 4 year university. Got Suze Orman’s emergency fund established and Dave Ramsey’s monthly budgeting now for years.
My credit is 720 and why? Perhaps a penalty because I am too focused with personal finance? “not enough revolving debt experience?” No guys, I can afford to buy my appliances and reliable-used cars with $$.
I hear you.
I recently canceled a one-year-old Discover Card and my Credit Score dropped from 778 to 760. HUH?!?!?!
That’s because according to Dave Ramsey, FICO is an “I-love-debt” score, that is calculated as follows:
FICO core calculation
35% Debt History
30% Debt level
15% Length of Debt History
10% New Debt
10% Type of Debt
The practical upshot of this is of you have a million dollars in the bank and don’t borrow for seven years, you will have no FICO score.
As you so elegantly put it, “Fair Isaac my butt”.
the reason it goes down is because alot of what goes into credit scoring is the amount of debt and the total avaliable credit.
The less of your avaliable credit that is used, the higher your score.
Ex. If your discover had a 10,000 limit and you had 1,000 balance or so. that is +9,000.
then it is cancelled. your new balance/limit is -1,000 !!
thats why your score goes down, most times you can call your bank to re-open
I don’t think it’s possible to have a negative balance unless the payment is greater than the existing balance. Even if that were the case,it would still require the credit card account to be open. It is true that the debt/credit ratio would rise because of the shrinking available credit due to the closed account. Unfortunately, if a request is made for the account to be re-opened, then that application of credit will further count against the credit score. There’s really no getting around that, however. A good credit history requires the use of credit. Nevertheless, it’s best if application of credit is timed in such a way that no more than 2 hard inquiries are found within any 2-year period.
For anyone who plans on owning a home and doesn’t have the cash to pay the principal in full, a good credit score is a necessary evil. It’s not all bad, though. Contrary to Wizard Prang’s assessment that Dave Ramsey believes that debt is needed in order to have a good credit score, going into debt isn’t required to positively impact the credit score. Showing credit card utilization and a history of payments is sufficient to elevate the credit score. And that can be done without ever paying interest. The only requirement is that the balance has to be paid in full each month.
I believe it is possible. That is why it is very important to be sure that you have a zero balance with your credit card company prior to closing the account, to request at the time of closing the account that it is reported that it is closed by your request and the account was paid as agreed. Yes, if you go over your credit balance, this would show up on your credit report. Be careful to remain in good standing with your credit card company so they aren’t tempted to close your account with an existing balance.
The standards on getting the best rate on mortgage loans has really gone up. I actually wanted to get a refinance recently and would have payed 3/4 of a point just to get the best rate since my score when down from 780 to 720. I hope I can bring it up to get the best rate so I can refinance soon.
You can also get your credit score at annualcreditreport.com It is free and you do not need to sign up for anything. A few years back, the gov’t required the 3 major credit agencies give consumers their FICO score (free) one time a year. So, if you don’t have a life, you can check your FICO score once every 4 months using one of the different agencies.
Editor’s Correction: You can’t get your score for free, you can only get your reports.
it is only about $8 to get your score from this website…to me worth it to keep up with your number!
That’s $8 more than Credit Karma
I like saving $96 a year.
Some people just arn’t bothered by the small fees they pay every day. I tend to watch those like a hawk!
Thanks for writing the article.
I agree that some people tend to micro manage their scores a little more than they need to. We have clients that pull their scores 4 and 5 times a month.
Unless you’re really fine tuning for a specific loan in the immediate future, I think that’s excessive. For example, I keep my credit in fair shape, and know approximately where it should be – I don’t actually check my score unless I’m a couple months out from a specific purpose i.e. home loan, business loan etc.
That said, with all due respect I have to disagree with your comment in which you state “anybody can get a loan regardless of your score” Lending requirements have really tightened up and I just don’t think that’s accurate in this present economy (unless you’re including private loans, hard money etc)
All in all helpful article and I think if consumers just really take the time to understand the system, they wouldn’t feel the need to watch their credit daily.
Last time I checked, my FICO was 740. I’m probably due for another free report. Good to know that 761 and up is pretty much the same for getting lowest rates on mortgages.
I had considered buying a house this year and just pulled my scores, which range between 782-823. I’ve been diligently paying off my credit card, but still owe about $3000 which is fortunately my only debt, with the exception of student loans.
The best rate I’ve been able to get is 5.25% on an $145,000 FHA loan (the most I qualify for). I only make $50K a year (not much in NJ), and have only a small down payment, plus the credit card debt.
So, enders definitely tightened up, five years ago I qualified for the same amount, but my income was far less!
I should add that 5 years ago I didn’t buy. They were more than willing to give me the money, but I knew I couldn’t make the payments. Then as now, it was for a 30-year fixed rate loan that I’m referring to.
my credit is shot so i don’t even bother. plus i have no money to fix it.
heehee lmfao at Jenny!!!!! Nor do I darlin heehee lmao….worse stuff to worry with
g’day!
a credit score goes down when one files bankruptcy. what happens to a score when a person reaffirms a debt with a financial institution? and the loan is in good standing. and the person get secured loans?
Reaffirming debt most likely has little effect on your credit score. A credit score is very much like a “z score” associated with commercial credits. The point is largely to predict the incident of future bankruptcy based on historical information. If you declared bankruptcy, you hit the nail on the head. Make your restructured payments, and all future payments timely. It will take 7 years to fully recover, but you will. Don’t file BK again, prove the statistics wrong!
Just to respond to the person who said something to the affect that if you check your score frequently you probably don’t have a life. I don’t agree with that at all. First, it takes me all of about 3 minutes to do that even if I have to boot up my computer. Secondly, I think that monitoring my credit has enabled me to have the life that I want. So, perhaps some people would say it’s a waste of time. I imagine there are many more who would tend to agree with me that the couple of minutes I spend each week on that is not causing me to miss some extrodinary life activity. I view monitoring my credit health up there with my concern for my physical well being. Considering the events of the day I don’t think I’m wrong.
Additionally there is a web site Mint.com I use to monitor my budget. I suppose the same people who think monitoring your credit score as I do would have a real field day with this. I spend perhaps 10 minutes a week on that.
I had a 520 credit score i have 8 store cards that need to be paid off on my CR, I paid one so far that actually posted to my CR and my fico raised about 29 points from that one bill my credit score is now 549 haha horrible but im working on it
I just don’t get it…. there is a huge push for the America public to get themselves out of credit card debt. I have several cards, but only a very small balance on one card. One installment note on my vehicle. I pay CASH for everything else and I cannot get my credit score above 810. according to online sources, I can raise my limit by having more credit cards with balance due! that is insance! there must be a better way.
Unfortunately the calculation of the FICO is a “secret sauce”. IAC 810 is excellent, as is anything above 750, which is what lenders look for (particularly if they don’t want to do any real work!:)).
Raising it any further will not, AFAIK, make any difference. In your shoes I would not worry about it.
Karen,
Higher credit scores are suppose to predict the reduced chance for default (read bankruptcy) over a longer period of time. The older your credit history, the longer it can accuratly predict your future. If you did everything perfect, and cannot break 800 (not that it matters at that level) you are most likely not old enough to warrant that lengthy of a prediction.
It’s quite simple really. The way to raise your FICO Score is to get into debt and stay there. I recently closed two of my three Credit Cards, (I have a zero balance on the third). To most people with half a brain that means that I am a good credit score, but not to these wallies – my FICO score _dropped_, albeit only slightly.
The real problem is that it is easier for lenders to check a FICO store – which a monkey could do – than it is to satisfy themselves of your ability to repay – which requires real work.
I wouldn’t worry; 810 is damned good, and most lenders consider anything above 750 to be “excellent”.
creditkarma.com gives you your FREE score
My wife and I was refinacing our home and we had credit scores of 775 and 778. We qualified for a 4.25% interest rate. The balance to be finaced was 331,000.00 the house appraised for 391,000.00. They told us based on what the home appraised for we were at 88% and we needed to be at 80%. They said we were 8% off and it would cost to buy down. They charged us 4.3 points to buy down. Based on our credit scores we thought something was wrong with what they was trying to charge us for the loan. If anyone could help us before we go to settlement we would greatly appreciate it. Thank you
Go to http://www.creditboards.com/forums/
They have loan brokers/professionals as members who will look at your GFE to see if you are getting screwed.
Something really sounds off with yours.
saladdin
Is it possible to have excellent credit and not have much income ? This is what I am trying to accomplish. I am a single mom. The only steady income I really have is my son is disable and on SSI ($700) monthly and when I am working my annual salary is usually between $20k-$25k yearly not much I know. I try despartly to pay my bills on time every month. I have 3 kids and my oldest goes to private school. Cause I live in the city. The only bills I really have is utility bills, rent, car ins, private school, just the basic bills and 1 secured credit card to help my credit score which with all 3 bureaus is between a 540-590. I also have a lot of old irresponsible debt (5 accounts)that are due to come off my credit late 2010. And not a lot of new unpaid debt less than 3 new negatives that I will pay off when I get my taxes in 2010. Will I ever have really good credit or do I have to open up more accounts to achieve this ?
As ridiculous as it may seem, it _is_ possible to have excellent credit and not much income. A family member who earns about what you do has a credit score of over 800, while I earn substantially more and am debt-free except for a modest mortgage, but have a score in the high 600s. Go figure…
I am no expert on credit scores, but in your situation I would advise you to concentrate on getting current with all payments, clearing up bad debts, paying bills on time, and building up savings. That will make you less reliant on debt and put you in a stronger position. I believe that opening extra accounts will not help as long if you are not current on payments.
According to Dave Ramsey, the way to get a good credit score is to get into debt and stay there, and I am not sure that is the way to go.
Oh, and if you are expecting a big tax refund in 2010, you are paying too much tax – overpaying the IRS makes for a lousy savings plan; reduce your withholding.
I hope that this helps…
Open lines of credit are important. You don’t have to run up that debt for a good score.
saladdin
You can not afford a private school. If you have a child that needs extra help. The school is required to provide it even if they have to pay to go to a special school. You need to get Loud so they take care of you.
I only have one current good standing account on my credit and I just opened that credit card account in March 2009 should I try to get another credit card now or wait a year or so. And how do I get offers for high limit cards my FICO is below 600 ? Do I have to start with like a $500 limit and pay that good for 6 months and then they will increase my limit?
Whether you should apply for another credit card depends partly on how many hard inquiries are on your credit report as well as how you plan to use that card. If you have 2 or more hard inquiries on your credit report, I would wait until at least one of those inquiries expires before applying for credit again. That could take up to 2 years. If you have 1 or less hard inquiries, I think it would be fine to apply for another credit card as long as you plan to charge no less than 1% and no greater than 20% of the credit limit to it. Getting a new credit card initially hurts your credit score because it decreases the average age of your accounts, and it adds a hard inquiry to your credit report. Over time, the hard inquiry is deleted from your credit report, the age of your account increases, and you have a larger credit history because of the new account and the record of payments made on it.
I imagine that creditors use credit limits to adjust their risk. Naturally, they give lower limits to those who they’ve identified as risky credit recipients. They may choose to account for the risk by raising the APR instead. So, my guess is that the easiest way to find high limit cards for high-risk people is to find cards with high rates. As long as you don’t carry balances, the rates can’t hurt you. Seemingly, many people don’t have that type of discipline.
And, yes, creditors will recommend that you wait at least 6 months from the inception of the account to apply for increases to your credit limit. That gives them enough time to re-evaluate your credit worthiness. However, it’s important to understand that they don’t do it automatically. You have to ‘inquire’ about it, and that hard inquiry drops your credit score just as applying for a new credit card would. So be sure that you can afford to take the hit by accounting for the # of hard inquiries on your credit report.
Last year I helped my father by cosigning a auto loan for him that he swore he’d pay off and on time… Well he didn’t and now I’m almost $9,000 in debt… I’m tryin to get a loan for school but even though the “repo” wasn’t my fault I’m being punished for it…
My husband was killed by a roadside bomb in iraq on 6/25/09 and shortly after his death I found out I was pregnant and had our son 1-19-09… After my husband died I was left with his credit debt as well as mine and I jus dnt know what to do… Ya $8 isn’t a lot to spend on a credit score for some people, but it is to me… I need some advice!!
Proud Mommy, you can get your credit score for free and on a daily basis at http://www.creditkarma.com. It even explains why your score became the way it is. Plus, you can use the site to learn how to improve your score, and you can see how you compare with others.
The greatest impact that you can have on your credit will result from continual on-time payments and an unwavering reduction of your debt. Conservative living can produce a great deal of liquidity that can go toward your debt in a short amount of time.
You may have to put the student loan on hold for now. Some schools offer more assistance than others, so you might try to increase the academic market that you’re willing to consider. It might even be better for you to actually pay your way through school. The ROI in education isn’t all that great these days. You might try to enroll in a cheap 1 or 2 year program, get a better job, and then increase your ability to pay for even higher education later down the road.
I can’t imagine what you’re going through, but if you have faith and live righteously, I’m sure you’ll be fine.
If you use cash to buy everything there is no reason to have a high credit score. Having a high credit score is only useful if you need to borrow money.
What do you suggest people do for large purchases? i.e. purchases in excess of 2 or 3 times their salaries? A $120,000 house for someone with a salary of $60,000 can yield a monthly payment that is reasonable for someone in that salary range. However, the length of time that it would take to raise the amount of capital required to immediately liquidate the house could be equivalent to the length of typical mortgage terms–15 or 30 years. That is a long time to wait to become a home-owner just to remain debt free. Plus, the opportunity to benefit from home appreciation would be lost. Not to mention the fact that the rent that such an individual would otherwise pay would only earn the individual the right to use the estate, not keep it and resell it.
Credit, when used correctly, grows cash and assets much quicker than what can be done with income alone. To get credit, it helps to have a credit score.
Wrong. Your credit score has an effect on your home insurance rates, car insurance rates and even employment prospects.
You are short sighted in your understanding of the importance of FICO scores.
saladdin
CreditKarma does not give you a real FICO score. The only place, period, that you can get your actual score is MyFico, and that’s only for EQ and TU. It’s impossible to buy your real Experian score.
All of the other places (TrueCredit, CreditKarma, FreeCreditReport, etc) provide you with a score that may or may not even resemble that a lender will see, and has been known to be off by up to 100 points in either direction.
Those scores are referred to on credit forums as “FAKOS”,
CreditKarma’s credit scores come from Transunion, and they’re FREE! No, they are not FICO scores, but they provide ball-park figures. If CreditKarma is not trustworthy, then neither is TU. That’s a tenuous position to choose since TransUnion is one of the 3 major credit bureaus.
My creditkarma has always been 20-30 points lower then my true myfico scores. It is a ballpark figure only.
saladdin
We got our credit scores in July when we applied for our home mortgage. I have not thought about it since. Now I am thinking I need to be keeping up with it. We are about to get a small loan through our insurance provider for a used vehicle, I guess I can request our scores from them. Is that right?
my credit history started in jan 2004….all i do is use my credit card and WITHOUT FAIL make sure that I pay it in full….i got an auto loan for the sake of loan history(though i had full cash) and did with the loan in 1 year (i had no idea about personal finance that time other than putting money in CD at that time!)….anyways, i have excellent credit score now…
I discovered that for an individual with no credit history, it can be incredibly easy to get a really high credit score within the nick of time.
My girlfriend had no credit history because she never needed credit . . . until now. She wants to buy a house, but she doesn’t have the option to pay in full. Consequently, she’ll have to get a loan, but she couldn’t qualify for a loan because she had no credit history. Furthermore, she couldn’t build up her credit history because no creditors would take a chance on her because of her lack of credit history. She was caught in a cycle that seemed to have no exit.
I came up with the idea of making her a Joint Account Holder on one of the credit card accounts that I don’t use. Since the account is already open under my name, her credit didn’t need to be assessed in order for her to gain access. Now that she has access, that account shows up on her credit report. Any activity that she has with the card will show on her credit report. That helps to build her credit history. Her use of the card helps me, too, because it increases my credit utilization. She’s responsible, so we won’t have an issue with missed payments, but it would be easy to turn the account completely over to her. Albeit, that’s not in my best interests because that would decrease my credit/debt ratio, number of accounts, my average account age, and my future credit history.
Just recently, we discovered a MAJOR benefit to her that we never imagined. Not only does she get credit for any future activity on the card, but also her credit report reflects the payments that I made on the card previous to her joining the account.
It took about a month and a half to add her to my account. In that length of time, she went from have NO credit history to having a credit history that makes it seem as if she’s been using credit since the middle of last year. In short, she’s gone from having no credit score to having a 772 in less than a couple months. That is a major loophole.
She has done virtually nothing to deserve that type of credit score, yet her score is higher than mine! Hopefully, I’ll be up there with her once these hard inquiries fall off of my credit report.
Matter of time before they close this loophole.
http://www.creditcards.com/credit-card-news/piggybacking-fico-credit-score-authorized-user-1265.php?a_aid=1017&a_cid=1204
saladdin
Jim,
Is it my links that put my comments in the “Waiting moderation” que?
saladdin
Yep, any comment with a link automatically goes into moderation.
They’ve actually addressed this and opted to let piggybacking continue because a lot more people benefit from this (parents adding kids, spouses, etc.) than those who take advantage.
They are working on ways to end piggybacking and they should. Taking another persons accounts which you have had nothing to do with is not an accurate picture of someones credit. It is beyond a loophole, it is being dishonest in my book. I know it’s allowed but even the FICO people acknowledge they are working on formulas to end the abuse.
saladdin
That’s a good article, saladdin, although it’s a bit old (July 30, 2008). To elaborate on Jim’s point, piggybacking won’t be patently disallowed. I believe the implication of the article is that the new technology used in the FICO algorithm will make it harder for private middlemen to directly profit from piggybacking. FICO doesn’t mind it being used by those who are closely associated with others who have good credit, so I don’t anticipate the model being changed to discourage that.
It is true that while the credit score is meant to be a measure of one’s ability to pay back debt, piggybacking boosts the credit score without adding a commensurate level of evidence that supports such a boost.
However, it would be a mistake to regard piggybacking as dishonesty. First, the article that you, saladdin, posted shows that FICO creators have no issue with traditional piggybacking, so the claims that you make regarding piggybacking being abolished seem to be unfounded. Secondly, for every loophole in favor of the consumer, I’m sure that there are so many other provisions that unjustly disqualify borrowers who are more than capable of holding debt responsibly.
More than likely, the FICO model was made in favor of creditors, not borrowers.
Hi, Jim. I don’t mean to be paranoid, but I’m wondering whether you endorse these credit monitoring services as companies where it’s safe to reveal ALL your sensitive personal financial information.
I signed up for the free trial from Privacy Matters 1 2 3, which required me to also sign up for something called 24 Protect, and then led me to Privacy Matters Identity. I was not alarmed at the information they initially requested, as I assumed they’d need at least name and address to access my credit records; but when they emailed me back to congratulate me on my membership they asked for SS number, credit card and bank account numbers and I’m not sure what all else because at that point I just exited the web sites. I am not comfortable putting all this info. on the internet for a company I know absolutely nothing about.
Do you know them well enough to consider this practice safe? I would assume you must if you refer thousands of people to them on your website. I read some of the comments above and didn’t see anything alarming (except for the person who couldn’t get them to stop dinging her bank account after she had cancelled).
Is there any way to check these companies out with respect to the security of the information they require you to provide? I would need to do that for my peace of mind unless you have sufficiently extensive experience with them to assure me they are safe.
Thanks for considering this. I’ll look forward to your response.
Debra
With respect to credit scores and reports, I only ever use ones run by the credit bureaus themselves. If the company isn’t run by one of the bureaus, I’d avoid it. The theory behind that is that they bureaus already have your sensitive information, so identifying yourself doesn’t make it less safe.
Regarding the comments of tagging someone to you with no credit history. Didn’t they update the rules so that it was more difficult to do that? Also, if I was a lender I would look at the history of how long someone has had credit as well besides their FICO score.
I’m not aware of any change in the rules that would made such a thing difficult to achieve. What I do know is that I had begun the process to add my girlfriend to one of my accounts in September 2009. Now, it’s December and she has a 772 as a credit score.
Lenders look at more than the credit score to determine credit worthiness, i.e. total debt and debt-to-income ratio. Notwithstanding, for her to go from not being able get any credit whatsoever (a secured credit card is a possible exception) to a 772 credit score in a matter of months is a radically good change.
Yes. FICO announced no more piggybacking but reversed itself. They are working on formulas to distinguish pibbybacking. Matter of time before its shut down again.
saladdin
I keep seeing comments about “hard inquiries.” My neighbors were selling their home last summer and I wanted to talk to a few mortgage lenders to ask basic questions and then decide if I wanted to apply or not. I clicked on a link on some website that I do not even remember now and got phone calls from about 5 lenders. I had very enlightening conversations but decided not to apply. I just pulled my credit report and see that all 5 of these companies that this website referred me to are listed as “hard inquiries.” I never filled out an application to any of them. It looks like they may have pulled my credit scores without my permission and listed these as “hard inquiries”? I am confused about how this could happen and what I should do about it if this indeed hurts my credit score. Can/should I protest this to get these removed from my record? How?
Any advice greatly appreciated!
Thanks,
Christine
The simplest way is to write a letter to each of the bureaus and ask them to get the unauthorized credit inquiries removed. You can find form letters online (this may become a future post topic!), good luck and please let me know how it turns out!
When you use places like “Lending Tree” that go out to multiple funders you get hit with hards. When you clicked that link you gave permission for your info to be shared. I doubt you can get them cleared off. Find the site and read the fine print. Bet you agreed to it.
saladdin
While I’m sure every rational person would agree that piggybacking on someone elses credit score is a loophole, I’d hope that the lender would look at the components that are making up the FICO score and not just the final score. I mean they don’t just gives loans to anyone who asks anymore…right?
Happened to my cousin. He was listed on his parents cards but when he went to get a car loan they turned him down even with a 750 score. They told him his file was not old enough. And trust me, his parents could walk into a bank and get an unsecured loan for craploads of money in a second.
saladdin
Yep, the score alone isn’t the only factor. Lenders look at the whole picture because they know that certain parts, like the score, can be gamed. Now, if your cousin had his parents cosign, which is essentially what the score is indicating (it’s high because he’s locked in with his parents on that card), then, like you said, they would have no problems getting a loan.
i’ll never forget when my first prospective landlord went to check my credit. I was like, ok, no credit, I’m a college kid, never had a credit card, whatever. He comes back, pulls me aside from my roommates (both with knowledge of their terrible credit so it was mine by default) and I am terrified.
oh crap, what is this about?….
he looks at me..
“i checked your credit” uhhh and??
“it’s better than mine, i mean wow”
haha…since then I have been extremely mindful of maintaining it
So is there any reason to try to get any higher than a 750 or so?
Wow all of this information is really useful! I’m a college student and I am worried about my credit score/report even though I don’t have any credit. My parents are horrible with their credit and I was wondering would a loan agency/company hold that against me in the future. I know it sounds asinine, but I really don’t want to end up like my parents with their horrible credit.
I let my dad keep my cellphone bill in his name so I could pay it, and even though its only been since October I have never missed a payment.
However, I’ve been thinking of some ways to get good credit, since my parents want me to stay home until I finish college since they are somewhat old and need help around the house.
Would it be a good idea for me to start paying for things like my own cellphone and stuff while I’m under their roof and it’ll be easy to afford? What about credit cards at my age? When’s a good age to get one? Should you even get one? Basically my question is what are some great tips to get good credit before I get shoved into the real world?
Also, I qualified for FAFSA and I am very iffy with how they do their grants. At one point I thought the grants I accepted would pay for everything, but they only pay for money per semester, then give you about 3 months to come up with the rest. I owed 600 something odd dollars and they didn’t let me know. Luckily I had 500 dollars from a scholarship and my parents were able to foot the other 100. I don’t want to be killed by college loans at a young age. My dad wants me to apply for loans and get as many as I can, but me personally, I don’t want to do that. I would seriously rather drop out of college until I have back up money saved up than to make life worse for me when I’ve graduated. I’ve heard in some places that loan debt from college is good debt. But in my eyes, debt is debt, and it just makes everything worse
Any help/tips/advice? It’s greatly appreciated.