Income and Credit Scores

[ExFlyBoy5]

My DW and I were discussing this subject last evening. She is in the property management/leasing business and sees a LOT of applicants for some very high end properties here in ATL. What she has seen is that some very high earners have terrible credit. In the last week she has had over 20 applicants for a house that is listed for $5500/month. Most applicants have monthly incomes in excess of $15,000 and all but 3 had scores that were 700 or lower...and only one had a score above 800 (they currently live in California). She has also noticed that those with the higher scores will have older cars (they have to tell them what cars will be garaged at the location, I don't know why, though).

This is somewhat surprising to me. I get it that they very well may spend a lot of money, but I thought that the credit issuing folks LOVE to extend credit...and the more you have to spend, the more they would love you. Not sure the point of my rambling...just thought I would share with the group.

 

[Car-Guy]

I don't really care what my credit score is since I haven't bought anything on credit in ~20+ years and I don't plan to in the future. (Except for credit cards that I pay off in full each month) I check my score "just for grins" a couple of times a year and it's been over 800 as long as I've been checking. Always have a couple of new cars in the garage(s) and a bunch of older ones too. Been retired for over 5 years now so I'm not sure what really drives the credit score number. Just my rambling/thoughts.

 

[Major Tom]

I don't think the ability to earn good money is necessarily linked to the ability to pay bills on time. Even with the timely bill-payers, there could be other factors pulling their scores down, such as number of open accounts, and amount of balances in relation to income.

 

[OldShooter]

The book Millionaire Next Door will help you understand this.

 

[Fedup]

I found this out when my kids were thinking of rooming with 4 other kids. Out of the 4 only two had good credits, their kids told us their parents have bad credit scores, yet you never know by the kind of car they drive or house they own or the colleges their kids go to.

One kid's parent is a dentist and the other is a business person. They have two kids went to expensive private schools on both coast. The other kid's parent is a lawyer, I was told she earns $300 a year and is a single mom. The single mom kept insisted her kid's first car to be a brand new car. While my kid's first car is a hand over 400,000 miles Toyota Corrola.

 

[bw5972]

My DW and I were discussing this subject last evening. She is in the property management/leasing business and sees a LOT of applicants for some very high end properties here in ATL. What she has seen is that some very high earners have terrible credit. In the last week she has had over 20 applicants for a house that is listed for $5500/month. Most applicants have monthly incomes in excess of $15,000 and all but 3 had scores that were 700 or lower...and only one had a score above 800 (they currently live in California). She has also noticed that those with the higher scores will have older cars (they have to tell them what cars will be garaged at the location, I don't know why, though).

This is somewhat surprising to me. I get it that they very well may spend a lot of money, but I thought that the credit issuing folks LOVE to extend credit...and the more you have to spend, the more they would love you. Not sure the point of my rambling...just thought I would share with the group.

As far as I know income and net worth are not part of the credit scoring process.

i.e.

Million dollar annual income with 20 million net worth are "invisible" to the credit score agencies. You history of credit usage (good and bad) and current snapshot of open credit accounts (total of credit limits, balance outstanding, number of account etc.) and a couple of other considerations are basically it.

 

[Animorph]

Debt is a big factor in the credit score. I bet that's why you can be high income and low credit score.

 

[jollystomper]

Do not assume that those who seem to have money always pay their bills on time. That can impact credit scores as well. I have seen well off friends think nothing of waiting until something went to a bill collector before dealing with it, or having cars re-possessed due to being lazy with payments. Their attitude was "I am making a lot of money so my credit standing doesn't matter".