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"What it takes to have a perfect credit score"
Old 01-06-2013, 10:48 AM   #1
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"What it takes to have a perfect credit score"

I enjoyed this Yahoo! finance article, mostly for its acknowledgment of the futility of the goal:
What it Takes to Have a Perfect (or Near-Perfect) Credit Score - Yahoo! Finance

Quote:
Approximately 0.5 percent of consumers reach the 850 mark, according to a 2010 estimate by the Fair Isaac Corporation, creator of the widely used FICO credit scores. Although chances are slim of climbing to the top of the 300 to 850 range, there are many people who have made it over the 800 hump. In fact, FICO released a report in April that found 18.3 percent of consumers have a score in the 800 to 850 range--the highest percentage since October 2008.
...
For consumers looking to join the ranks of people with exceptional credit score scores, Fair Isaac revealed new information in November about the characteristics of credit-score "high achievers." According to the report, those with scores greater than 750 exhibit similar credit habits. They use 7 percent of their available revolving credit, their oldest credit account was opened an average of 25 years ago, and they have an average of seven credit cards, including both opened and closed accounts.
Ironically, the scores of my spouse and I went up after we stopped earning a paycheck. I wonder if Fair Isaac scores for ER, too...
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Old 01-06-2013, 10:52 AM   #2
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My wife and I are both over 800. Not of much value to me since I have no debt or plan to acquire any.
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Old 01-06-2013, 10:57 AM   #3
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Besides joining the Membership at MyFICO.com, and then un-subscribing, what is the best web site to obtain one's FICO score once, even by paying for it?
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Old 01-06-2013, 11:00 AM   #4
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Originally Posted by Lazarus View Post
My wife and I are both over 800. Not of much value to me since I have no debt or plan to acquire any.
Me as well. Always thought it strange mine was lowered because I didn't have enough CCs and more debt history.
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Old 01-06-2013, 11:32 AM   #5
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Originally Posted by Richard4444 View Post
Besides joining the Membership at MyFICO.com, and then un-subscribing, what is the best web site to obtain one's FICO score once, even by paying for it?
You can get free credit score at Free Credit Score & Credit Report Data. No Credit Card Needed It was recommended by Alan Roth or someone like him so I felt safe going there.

My credit score is 758 or 768 and has been for the couple of years I have used this site to check it. I have just 2 credit cards, one with a $10,000 limit that I usually have $600-1200 a month balance that I always pay off and another with maybe $2000 limit that I use maybe once a year. Would another credit card with a large, $5000 maybe, limit boost me into the 800 range? I'd like to be at 800 for no other reason than it's a high score.
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Old 01-06-2013, 11:42 AM   #6
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I don't want a perfect score. That suggests I am not taking advantage of enough arbitrage opportunities. Actually, prior to checking out of my day job, I want the most credit limit I can get since it won't be easy to get it without a day job. That means big credit crad limits, a fat HELOC, etc. A free option and more flexibility.
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Old 01-06-2013, 12:40 PM   #7
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From my perspective credit scores are weighted to keep people in debt, rather than to congratulate and encourage those to use it responsibly and pay it off quickly. Everything I own is paid for; I maintain two credit cards (Chase & Citi with no annual fee or vanity colors) and pay BEFORE the bill is due. Car was paid off 4.5 years early. The only reason it was financed was to boost my score & I got the lowest interest rate. And for being prudent and responsible, my score went from EXCELLENT to GOOD. But I can sleep at night and not worry about repo men & bill collectors.
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Old 01-06-2013, 01:56 PM   #8
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I wonder how accurate these scores are. I just looked up my credit report, and after three years, it still does not mention our one, ongoing debt, the mortgage. Also, we apparently have 8 credit card accounts open, of which, we only use two. Of these we NEVER run a balance. I suppose the 6 unused cards are a drag on our credit number. Just guessing.
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Old 01-06-2013, 02:14 PM   #9
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I'm not sure credit scores are predictable after high, medium, and low. When I was nearing retirement I found a house I wanted in the town I now live in. Since my current house had not sold, I needed to temporarily take a mortgage at PenFed. I thought to have a really high credit score you needed to use a lot of credit and show yourself making payments on time. I do not use credit that much and had paid off my house and cars years prior. But my credit score was 840 and my husbands was 832. I can't imagine why the slight difference.

I have concluded that all the talk about how one gets high scores is just not correct. We had even recently been a part of that BoA indiscriminate slash of credit limits on cards and it didn't seem to hurt us to have this decrease our ratio.
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Old 01-06-2013, 02:19 PM   #10
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I checked recently and my credit score is in the 820 range. Like Nords said, you can never get to a perfect credit score. One of the things I did six months ago was to get my score up basd on some facts that the credit agencies utilize. Tried to increase my credit card debt to limit ratio. Called all the card companies and asked to raise my limit to at least $25000. Some granted my request while others said they would consider and answer shortly. One raised my credit limit but denied the figure I requested and told me why. One of the things they pointed out was that I lacked a mortgage and therefore could not track my ability to pay a debt such as this on a large amount. What? So, I am told, you might have a $1M in the bank, own your home free and clear and not have much if any debt, but that doesn't prove you will pay your bills on time. Someone has to explain to me how these credit agencies operate. Who comes up with the standards? I no longer worry about it.
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Old 01-06-2013, 02:23 PM   #11
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Originally Posted by JOHNNIE36 View Post
I no longer worry about it.
That is what I have decided as well.
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Old 01-06-2013, 10:26 PM   #12
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Who cares what the score is, as long as I qualify for jobs and the lowest loan rates? The score is for lenders to rate you as a default risk.

Besides, they come up with the stupidest "adverse factors". Here are my credit scores and adverse factors listed on my credit reports from a couple of years ago when I applied for a mortgage. I had either one card with about $1800 debt or no carried debt, and two or three cards I pay off monthly and no other debt at all. (For some reason the adverse reasons were in all caps, and I copied/pasted them here so they remain shout-y.)

Equifax: score 796 of range 300-850 (what's with the unnormalized score ranges?)
Key Adverse Factors:
1. TIME SINCE MOST RECENT ACCOUNT OPENING IS TOO SHORT
2. PROPORTION OF BALANCES TO CREDIT LIMITS IS TOO HIGH ON BANK REVOLVING OR OTHER REVOLVING ACCOUNTS
3. AMOUNT OWED ON REVOLVING ACCOUNTS IS TOO HIGH
4. TOO MANY ACCOUNTS WITH BALANCES

Experian: score 800 of range 340-820
Key Adverse Factors:
1. RATIO OF BALANCE TO LIMIT ON BANK REVOLVING OR OTHER REV ACCTS TOO HIGH
2. TOO MANY INQUIRIES LAST 12 MONTHS
3. TOO MANY ACCOUNTS WITH BALANCES
4. LENGTH OF TIME ACCOUNTS HAVE BEEN ESTABLISHED

Transunion: score 782 of range 300-850
Key Adverse Factors:
1. TIME SINCE MOST RECENT ACCOUNT OPENING IS TOO SHORT
2. LENGTH OF TIME REVOLVING ACCOUNTS HAVE BEEN ESTABLISHED
3. TOO MANY ACCOUNTS WITH BALANCES
4. PROPORTION OF REVOLVING BALANCES TO CREDIT LIMITS IS TOO HIGH ON BANK REVOLVING OR OTHER REVOLVING ACCOUNTS
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Old 01-07-2013, 02:51 AM   #13
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I no longer worry about it.
Me neither. Since I owe the banks money, they're the ones that should do the worrying.

I've never checked my credit score.
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Old 01-07-2013, 09:21 AM   #14
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All the "what if" calculators that show how various events would impact my credit score show that it would improve if I took out a mortgage. No thanks, I'll prefer to stay debt-free*, thanks.

* -- Apart from the credit card debt which is paid in full every month, anyway
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Old 01-07-2013, 09:37 AM   #15
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I had intended to pay cash for my Prius, but Toyota gave me a loan for 0.9%, so I decided that was a small enough price to pay to keep $25k in my pocket. The finance guy at the dealership said my score was over 800. Only debt for years has been the mortgage.
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Old 01-07-2013, 09:43 AM   #16
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Funny thing is that I did not see in the article what it actually takes to get a perfect score!!!


My sister and I recently refied our mortgage.... I am currently employed with a salary much higher than her pension... I have 7X more savings than her... I was surprised that my score was just around 800 and hers was in the high 820s....

I think that the zero rate CCs that my BIL arbatraged back when he was living bumped up her score... she has over $150K available from CCs.... I have a measly $50K....
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Old 01-07-2013, 10:37 AM   #17
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Originally Posted by veremchuka View Post
You can get free credit score at Free Credit Score & Credit Report Data. No Credit Card Needed It was recommended by Alan Roth or someone like him so I felt safe going there.

My credit score is 758 or 768 and has been for the couple of years I have used this site to check it. I have just 2 credit cards, one with a $10,000 limit that I usually have $600-1200 a month balance that I always pay off and another with maybe $2000 limit that I use maybe once a year. Would another credit card with a large, $5000 maybe, limit boost me into the 800 range? I'd like to be at 800 for no other reason than it's a high score.
FWIW, I don't believe that site gives you your FICO score. The credit agencies average credit score and FICO are different. Most inquiries use FICO. You usually have to pay or subscribe to credit monitoring to get a free FICO score.
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Old 01-07-2013, 11:32 AM   #18
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Who cares what the score is, as long as I qualify for jobs and the lowest loan rates? The score is for lenders to rate you as a default risk.
Besides, they come up with the stupidest "adverse factors". Here are my credit scores and adverse factors listed on my credit reports from a couple of years ago when I applied for a mortgage. I had either one card with about $1800 debt or no carried debt, and two or three cards I pay off monthly and no other debt at all. (For some reason the adverse reasons were in all caps, and I copied/pasted them here so they remain shout-y.)
Equifax: score 796 of range 300-850 (what's with the unnormalized score ranges?)
Experian: score 800 of range 340-820
Transunion: score 782 of range 300-850
Your scores are probably higher than mine!

I saw a sad situation last night, and I'm not sure how it's going to turn out. Our neighbor up the street was widowed just over a year ago, and she's been doing fine on her own. This month she's remodeling her house, and she's applying for a PenFed home equity line of credit.

She's employed full-time. Plenty of assets. She has two credit cards and pays her balance off every month. No mortgage or other debt, not even a car loan. Yet PenFed said that her credit score was barely over 700, and one of her "weaknesses" was too high a credit use with the accounts open for too short a time.

It turns out that for the entire time she's been married (over 40 years) she's used credit cards with the account in her spouse's name. (Her card was on his account.) She only started her own credit history after he died, when she changed the accounts from his name to hers. Everything went well with the credit-card companies when she had to do that, but to the credit rating agencies it's as if she's starting from scratch.

I hope PenFed doesn't screw around with her HELOC interest rate.
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Old 01-07-2013, 11:57 AM   #19
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Your scores are probably higher than mine!
Probably. As I understand it, they score based on credit history, not assets. So a billionaire that never used a credit card, car loan or mortgage probably has a much lower credit rating than I do.

I don't think the formula accounts for paying off a credit card monthly. The reports show a balance every month (varying with my monthly spending) for the 2-3 cards I use and pay off monthly, and some of my adverse factors indicated I was scored down for carrying either too many or too high balances. It's not worth the effort, but it would be mildly amusing to find out whether it would be better credit-score-wise to use and pay off CCs monthly or use a debit card for purchases and keep CC balances at zero. Or if using only one CC for purchases/payoff or even rotate which CC I use each month so each month only one (different) CC has a balance. (Definitely not worth the effort.)

As far as scores go, I don't think they care that you have the ability to pay; they care that you have a history of paying on time. Not early, not extra, but on time.
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Old 01-07-2013, 01:32 PM   #20
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In my earlier post I mentioned that I "no longer cared" about my credit rating, and others chimed in that they no longer cared. I will change the word "cared" to "worry". Well, if your credit rating is good you don't have to worry. For those who have less than great (or good) credit, you should worrry because it will impact your ability to get the best rates on insurance. I have first hand knowledge of how this affects car insurance premiums. Also, homeowners. Trust me. You want the highest credit score you can readily attain. Work to get it to around 800.
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