Not Excellent FICO Score

[lem1955]

I was thinking of using a VSAC Advantage loan to help a grandson with college expenses. The promotion materials quoted 0% origination fee and 5.5% interest for 10 years if the co-signer (that would be me) has excellent credit. I figured I was a shoe-in. When I filed the app I was told I would have to pay a 3% origination fee because my credit score is 781. Everywhere else I look any score above 760 is excellent. Anybody else out there been told 780+ isn't excellent? I think I will contribute to his college bills using another method, 5.5% isn't all that great either.

 

[DROPOUT]

Depends on the scoring model (type of FICO model) they pulled.

There are a ton of different types. With that said, normally anything north of 750/760 is Super Prime, so it seems like it may be false advertising/marketing and they are using it as a bait and switch for the unsuspecting.

 

[Walt34]

I think I will contribute to his college bills using another method, 5.5% isn't all that great either.

That is what I would do. And I'd suggest they do something that is generally not physically possible but a popular suggestion anyway.

 

[Bamaman]

I think someone's lost track of reality. Those with high 7's are considered low risk and to have excellent credit. Some can have perfect payment histories and be much lower. What the fallacy is that my wife's FICO score often runs 815-830 and she hasn't even worked in 15 years--and has little capacity to pay any loans.

 

[Lakewood90712]

Sure seems like a bait and switch situation. Go with someone else if you can.

PS, My FICO had been dropping, so with a little research, and small changes, it has risen about 20 pts. in 6 mo, back to where it had been for many years.

Keep credit usage in the 10-15% of credit line on each card, and when the bill comes, check the current "Total Balance", not just the " Statement Balance". I pay the total balance. Keeps credit line utilization low.

 

[Senator]

A FICO score runs 300 - 850. Others run as high as 950.

See what score they ran and what their 'excellent score' ranges are.

 

[MichaelB]

That is what I would do. And I'd suggest they do something that is generally not physically possible but a popular suggestion anyway.

+1

 

[Amethyst]

Boy, what a scam for a generous grandparent to run afoul of. 781 is a great score. Have you thought of getting a HEL instead? Penfed's rates have been rising, but they are still offering better than 5.5% for 10 years, and of course no fees, except an appraisal in certain cases.

120 months 4.49% $259.10

Amethyst

I was thinking of using a VSAC Advantage loan to help a grandson with college expenses. The promotion materials quoted 0% origination fee and 5.5% interest for 10 years if the co-signer (that would be me) has excellent credit. I figured I was a shoe-in. When I filed the app I was told I would have to pay a 3% origination fee because my credit score is 781. Everywhere else I look any score above 760 is excellent. Anybody else out there been told 780+ isn't excellent? I think I will contribute to his college bills using another method, 5.5% isn't all that great either.

 

[Texas Proud]

I think someone's lost track of reality. Those with high 7's are considered low risk and to have excellent credit. Some can have perfect payment histories and be much lower. What the fallacy is that my wife's FICO score often runs 815-830 and she hasn't even worked in 15 years--and has little capacity to pay any loans.

LOL... same with my DW.... she has one card in her name and does not use it much... make about $15K subbing at school.... so at least she makes some money....

 

[bclover]

I was thinking of using a VSAC Advantage loan to help a grandson with college expenses. The promotion materials quoted 0% origination fee and 5.5% interest for 10 years if the co-signer (that would be me) has excellent credit. I figured I was a shoe-in. When I filed the app I was told I would have to pay a 3% origination fee because my credit score is 781. Everywhere else I look any score above 760 is excellent. Anybody else out there been told 780+ isn't excellent? I think I will contribute to his college bills using another method, 5.5% isn't all that great either.

I'll do you one better Lem,

April of 2014 I was in the market for a new car. I decided to treat myself to a new model. 1) in 55 years lol I've never brought a brand new car and 2) I had gotten a sizable bonus from work and I figured with a hefty downpayment I would only need maybe a 2 year loan.

Anyhoo, Lexus had a finance deal for 0.9% on certain models for those with "excellent" credit. ok, check my credit with the 3 big agencies come up with 813.

Go to the lexus dealer ready to buy and told that 813 was not considered excellent (evidently 825 and better) WTF!!!
they'd be happy to finance it at 4.9%

(In honor of Flyboy) I drive an Infiniti.

 

[Danmar]

I continue to be surprised with Americans' fixation on their credit scores. Where I come from to be truly FI you have no debt or any reasonable prospect of ever having debt again. I have no idea what my credit score might be.

 

[LOL!]

I think the lender did you a favor. I don't think grandparents should co-sign loans for college students. Your idea to help another way is most excellent.

 

[lem1955]

My plan had been to take advantage of the decent terms on the Advantage loan and reserve my HELOC for other needs. My intent was to pay the loan myself all along. But I have room on the HELOC with a 2.99% interest rate and cash too that I can use to support DGS's education. Not a big deal, just surprising. The Lexus story where FICO 813 isn't excellent floored me.

 

[hnzw_rui]

I continue to be surprised with Americans' fixation on their credit scores. Where I come from to be truly FI you have no debt or any reasonable prospect of ever having debt again. I have no idea what my credit score might be.

To be honest, I wouldn't even care about my FICO score if I hadn't been considering buying a house. Unfortunately, I don't quite have $500K cash to pay for one without a mortgage.

I reckon a home purchase is one of the primary reasons Americans take care with their credit score.

 

[2017ish]

I continue to be surprised with Americans' fixation on their credit scores. Where I come from to be truly FI you have no debt or any reasonable prospect of ever having debt again. I have no idea what my credit score might be.

We don't have any plans to incur new debt, but it is conceivable, although unlikely, that we'd opt not to buy our next place with cash to maintain liquidity.

OTOH, I know that we will continue to purchase liability insurance--and, at least in the US, those rates are affected by your credit score. As "they" say on the web, that is "one WEIRD trick," but nonetheless ....

 

[Cobra9777]

I continue to be surprised with Americans' fixation on their credit scores. Where I come from to be truly FI you have no debt or any reasonable prospect of ever having debt again. I have no idea what my credit score might be.

I tend to agree. I have no debt and only a vague idea what my FICO score is from about a year and a half ago. I don't routinely look it up. Our credit has been frozen for quite a while and so far I've had no reason to thaw.

In my simple mind, debt is something you take on when it's the only option... like when you're 25 and need a reliable car for your new job; or when you buy your first home. I know that many FI people here advocate holding a low-rate mortgage to keep more funds invested; or a HELOC as an alternative source of emergency funds. I think there is some merit to such uses of debt, and would not rule it out for us in the future if the situation made sense.

 

[ExFlyBoy5]

I haven't really paid too much attention to it in the last few years, but in the last couple of months, it's posted on my Amex account. Oddly enough (or not) it varies from 810 to about 820 depending on how the balances on my cards work out for that month (I usually pay the balance a day before the statement closes out, so I rarely have a total balance of $20 on all accounts). I find it entertaining that they still show negatives that I should address to "increase my score". Well, I don't intend on leasing or financing a Lexus, so I should be good to go.

One thing about the FICO that I DO NOT like is the insurance scoring. It hasn't affected me, but my Dad got dinged for "bad credit" with Farmer's Insurance a few years back. He hadn't financed a damn thing in probably 30+ years and he has two credit cards with low available credit lines...so he was deemed to "have bad credit". That is just annoying and wrong in my opinion.

Oh yeah...to the member who bought an "Infinity"...it's actually an InfinitI. Geez.

Oh yes...I agree on the HELOC. I opened one a couple of years ago through PenFed before retiring. I didn't know how my income reduction would affect the loan decision process, so I went ahead and got it as a source of emergency funds (as in more than $10K that I would need in the matter of days). The LTV is about 20%, so there were no closing costs or appraisals and the adjustable rate is at 3.75% (I assume it hasn't adjusted since 2013) for a 15 year term. It was very easy to open and took about 2 weeks from start to finish.

 

[bclover]

I tend to agree. I have no debt and only a vague idea what my FICO score is from about a year and a half ago. I don't routinely look it up. Our credit has been frozen for quite a while and so far I've had no reason to thaw.

In my simple mind, debt is something you take on when it's the only option... like when you're 25 and need a reliable car for your new job; or when you buy your first home. I know that many FI people here advocate holding a low-rate mortgage to keep more funds invested; or a HELOC as an alternative source of emergency funds. I think there is some merit to such uses of debt, and would not rule it out for us in the future if the situation made sense.

and that's a totally fine option but not everyone feels like that nor do they have to,
Hence a good credit score.

I'm not a "debt is evil" person and since the fico score is the system this country uses, I care.

Also it's not only about debt, car insurance companies, health insurance premiums and even if you don't purchase a house, in order to rent an apartment in many places you need a good credit score.

I'm well over 25, I plan on retiring next year, I will have a mortgage. have absolutely no problems with that.

 

[PhrugalPhan]

I continue to be surprised with Americans' fixation on their credit scores. Where I come from to be truly FI you have no debt or any reasonable prospect of ever having debt again. I have no idea what my credit score might be.

I agree and really don't care what my score is (though I know its over 800). But at least in the good 'ole USA, they use credit scores for more than loaning money. As an example, last month my GF forgot to renew her renter's insurance so it was cancelled. When she was told she needed to renew by the rental office, when she went to get insurance again, they based it on her credit score. And since she has been with me her credit is improving, so her insurance actually dropped almost 50% .

 

[Danmar]

Interesting. I own cars and a home in Arizona, obviously insured. If they need a credit score they never mentioned it. State Farm.

I did have a lot of difficulty getting approved for a US domiciled credit card but this was because I didn't have a US SS number. Eventually got around that by getting AMEX Canada to vouch for me.

I probably have been a little sheltered from credit scores because I used to work for a full service bank and got all my services from them. I figure if I ever need a lot of cash for some reason I would just draw on my securities margin account. No credit score needed there, I don't think.

 

[braumeister]

Interesting. I own cars and a home in Arizona, obviously insured. If they need a credit score they never mentioned it. State Farm.

They wouldn't mention it, but they almost certainly considered it when they gave you the rate.

Not a big deal, but sometimes it can be useful. Thanks to a very good score, I was able to get a 2.5% mortgage when we bought our condo earlier this year. That rate is for the first five years, so I plan to keep it going for a while despite selling the previous house. I get a tax deduction for the interest and I can certainly do better than 2.5% with the money elsewhere. Or at least I hope so!

 

[Danmar]

They wouldn't mention it, but they almost certainly considered it when they gave you the rate.

Not a big deal, but sometimes it can be useful. Thanks to a very good score, I was able to get a 2.5% mortgage when we bought our condo earlier this year.

I wonder what kind of a score they could get given the fact I don't have a SS number? Maybe that's why I seem to be paying a lot. Thanks.

 

[braumeister]

I wonder what kind of a score they could get given the fact I don't have a SS number? Maybe that's why I seem to be paying a lot. Thanks.

I don't know about Equifax, but Experian and Transunion both calculate credit scores for people without SS numbers.

 

[harley]

I continue to be surprised with Americans' fixation on their credit scores. Where I come from to be truly FI you have no debt or any reasonable prospect of ever having debt again. I have no idea what my credit score might be.

Where I come from debt is a tool, just like a hammer or a gun. If used correctly it can be really useful. If used incorrectly it can cause significant damage. If you use a credit card you have debt, even if only until you pay it off at the end of the month. A car payment or a mortgage is the same thing with a longer interval. A lot of people play credit card games for fun and profit. I don't, but there's nothing wrong with it. If you're purely cash on the barrelhead, more power to you, but you're just avoiding use of a particular tool. Which is a personal choice, and has nothing to do with being FI.

 

[kcowan]

I had my CC exposed to the Home Depot CC theft so I got Equifax monthly reporting for a year. A OK all the way. Of course I have carried no debt for 12+ years but I try to keep my credit-worthiness in good shape.