credit report

iVillage Member
Registered: 12-07-2005
credit report
13
Thu, 06-08-2006 - 4:51pm
Hi all, i have never posted here before. I have been thinking of buying a condo...however i just checked my credit report and i dont know that it will be possible for me to do that anytime soon. I had a feeling my credit wasnt good. I dont have a credit card, just use my debit card. I also have a school loan that i have not been good with...i always seem to be behind on it...i have about 4k left to pay on it. So i checked my credit report and it says, your report number is, 42920800080. So this is pretty awful...I guess i thought peopel who had bad credit were people who charged up items on credit cards when they dont have the money, then made late payments, etc...i am suprised that my score is that low...it seems silly now because i do have quite a bit of money saved up...so what i'm wondering now is, what are the best ways to raise my score?

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iVillage Member
Registered: 06-04-2004
Thu, 06-08-2006 - 4:59pm

What is your score? It should be a 3 digit number, I think the number you posted is the just a reference number. It's true that if you don't have a lot of credit history you will have a lower score. Unfortunately it isn't just negative items that lower your number but also a lack of information. I would get up to date on the payments on the student loan and stay current on it for sure. If you are looking to raise your score you might also try getting a small installment loan of some sort and a credit card that you pay off each month. Just my thoughts. Hope that helps.

~leanne

~leanne

deciding to be happy doesn't mean that everything is perfect, but that you had decided to look beyond the imp

iVillage Member
Registered: 12-07-2005
Thu, 06-08-2006 - 5:13pm
hmm, well for whatever reason...on this report i'm not finding the 3 digit number anywhere.
iVillage Member
Registered: 01-06-2005
Thu, 06-08-2006 - 5:54pm

Where did you get a copy of your report?

 

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iVillage Member
Registered: 05-09-2002
Thu, 06-08-2006 - 5:56pm
the three digit number is usually referred to as a FICO number (fair issac is what it stands for). I think it used to be one FICO but now each of the major reporting agencies seem to have one so I am not sure. This number you BUY. How nice, huh? They judge you on something you don't even get to see. Google FICO and I imagine you can find where to buy it. I could be wrong - I hope I am but the last time I saw my FICO I had to pay $9.99 for it.
iVillage Member
Registered: 12-07-2005
Thu, 06-08-2006 - 7:12pm
so the fico # is the number i'll get judged on?
iVillage Member
Registered: 05-09-2005
Thu, 06-08-2006 - 7:35pm
Yes -- you'll have to pay to get it. The reference number isn't telling anything about your actual credit score. It might be high!!
Good luck.
Megan
iVillage Member
Registered: 03-17-2003
Thu, 06-08-2006 - 8:40pm

Your creditworthiness is more than the FICO score.

Lenders look at your employment history, length of employment with your current employer and earnings.

Lenders will also look at the accounts on your credit reports for accounts in good standing (and the single most important thing you can do is pay your bills on time every month). They will also look at accounts that are not in good standing. How you have maintained your monthly obligations is a guide as to how you will maintain your debts in the future. If you are chronically late or behind on your bills, that will not be in your favor.

Lenders also look at the information in the public record section of your credit report. Do you have tax liens on file (you get a tax lien if you have not filed or paid your income tax bill)? Have you been sued for not paying a bill and have a judgment recorded against you? Have you ever filed bankruptcy? If yes and it was 2 years ago, you will be able to apply for prime interest rate loans but if your bankruptcy was discharged less than 2 years ago you will only be eligible for subprime interest rate loans.

Lenders also look at your credit-to-debt ratio. For example, let's say you bring home $3,000 in a month and of that you have $800 mortgage payment, plus another $250 in car payment, and your student loan. Your credit-to-debt ratio is very favorable.

Lenders also look at your personal financial situation. Do you have a savings account? Do you have investments? How about retirement accounts?

Then lenders also look at your credit scores. There are actually 3 credit scores. FICO is one of the oldest scores around. Later this year a new credit score will be available, The point of the new credit score is to simplify the scoring system which is supposed to be more fair, among other things.

As you can see, your application for credit includes many facets and not just your credit score. Generally speaking the credit score is an indicia of your creditworthiness. Somewhere along the line, however, the media and public have focused a lot of attention on this little 3-digit number. Truth is, however, credit scoring is not a perfect science. You can pull your credit score tonight and see it is only 685 but last week was 700. What happened? You did nothing wrong. You pay your bills in full and on time every month. Why did your score go down???? Your problem is not your bills. The problem is the calendar. Yes, the problem was just the date on which you requested your score. Perhaps your $3,500 payment to pay off your MBNA credit card had not posted on the day you pulled your credit score and when the system calculated your score, it based the FICO on that account with a big balance. A few days later your payment would have been posted, the trade line would have a zero balance and your credit score would zoom back up. See, it is NOT a perfect number and we should not focus mainly on it.

The best advice is to pay your bills on time. Don't be late. Get your student loan back in good standing. If you have a credit card use it occasionally and pay it off every month. For example, instead of paying at the pump, charge a tank of gas. You would be paying the money anyway, so let it work for you by putting it on a credit card and then pay it off. It's not how much you charge but how you manage the account.

You'll be fine.

Good luck.

Carolyn

iVillage Member
Registered: 03-27-2003
Fri, 06-09-2006 - 10:03am

Excellent post, Carolyn. To the original poster, you definitely will want to get that student loan caught up and have a few thousand saved up that you are not planning to use as a down payment. I also recommend getting pre-approved for a mortgage before you go looking for a condo to buy. They will tell you how much they will approve you for, but be careful because they tend to "approve" people for a bigger loan than what is actually manageable. When you do go to buy a house take into account what the property taxes and homeowners insurance will be too. And association fees if you do a condo.

Heather

iVillage Member
Registered: 12-07-2005
Fri, 06-09-2006 - 10:16am

wow, thanks everyone for the great advice, it's very helpful. I figured they would just look at the credit score and that's it. I'm on time with pretty much all my bills...but I definitely need to get caught up on my student loan...i hate that thing, but it's not going away. I have to pay about $125 a month...

I do have 20k in savings, do you know if this would help when getting approved for a loan or in terms of when i go to get a condo? I'd like to save up a bit more, I'm going to try and do that this summer, so we'll see what happens.

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iVillage Member
Registered: 11-09-2004
Fri, 06-09-2006 - 10:56am

Hello,


You mentioned that you have 20k in savings. How much do you owe in student loans? It's worth it to go ahead and pay down the student loan with all but $1000 of your savings and then continue to save up for a down payment. You're paying interest on the debt and your savings account is earning interest. If your savings account is not earning more interest than your student loan, then the money would be better spent paying off that debt. If it's getting a better return in your savings account, then consider using some of the interest you are earning to pay down your student loan.


Basically, you mentioned hating that student loan payment. I used to pay $50 per month for my student loan because it was an income-dependent payment. At the time I asked for the lowest payment they offered, I was making less than $8000

Sincerely,
Lindsey Schocke

Geeks on Tap: Mission Accomplished

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