My FICO Score

[LateToFIRE]

We know several people that rent without a FICO score. It may be true that some large management companies prefer automation and using credit scores. But it is not difficult to rent without.

Insurance rates from some companies / agents may use credit score as part of their costing algorithm. With no credit score, it is a manual process - and manually decision on risk. We have not had higher insurance rates as a result of no score.

I think a bad score would hurt in both scenarios. But no score forces a different method than plain vanilla, online automated costing using credit scores.

As a landlord, I always run a credit check and require an application with financial info. You find out some whacky things about people's approach to finances when you review this stuff. Often, I have had to tell people "no, you seriously cannot afford this amount of rent."

 

[LateToFIRE]

I have heard some big horror stories here in Washington state about deadbeat tenants skipping out on rent for months or years and our leaders letting them stay. If I were a landlord in Washington (I would shoot myself first) I would require a credit score of 800 minimum.

I've been lucky to not run into that, but for sure NYC Housing Court sounds a lot like what you describe. I'm getting out of the landlord business - too much headache, time to relax.

 

[Fermion]

It is because of this:

https://kuow.org/stories/landlords-must-rent-first-come-first-served

"On Thursday, the Washington State Supreme Court ruled in favor of a Seattle law that requires landlords to rent on a first-come, first-served basis. It’s called the “first-in-time” rule.

Landlords first have to write and publish a list of requirements for prospective tenants.

The state doesn’t determine those, so they can be anything that the landlord wants that’s legal: a minimum credit score or income, or requirements around rental history or even things like “applicant removed shoes while visiting unit.” Then, the first person who fulfills all those requirements and turns in an application has to be offered the unit."

 

[rodi]

I don't care about my credit score because it's above 800. However, my sons are in college and just starting to build their credit scores. One has 1 card, one has 2. The one with the second card saw his credit take a big hit when he opened the second card. The one with only 1 card has a 740 score after 1 year if credit. The other is only at 690. I've told them both to continue to pay in full every month and give it time. Time of credit account is the thing that has the biggest effect for them ATM.

 

[Texas Proud]

Interesting way to help one’s relatives. What could possibly go wrong?

IMO being a child is way different than any other relative...



If the child says 'I am not going to pay you back'... it is very easy to say 'I am not going to leave you anything when I pass'....

 

[OldShooter]

Oh ok.

I'll just use 7% x portfolio for income.

And as far as cards go, it looks like the Wells Fargo card with 2% cash back and no fee is currently the best?

I tried writing in "Adequate" once. Didn't work.

 

[jazz4cash]

Interesting way to help one’s relatives. What could possibly go wrong?

I don't think anything can go wrong unless you actually give them a card. It's not like co-signing a loan, is it? I am ambivalent about this practice but to me it is more evidence that credit scoring may not be a strong indicator of credit risk. Too many ways to game the system.

 

[Markola]

^^^^ It is unclear whether bada bing provided a card, what the loans were used for, whether the relatives helped pay anything back or what the risks were to bada bing if a company figured out the ruse, etc. If someone got in a wreck or got very sick, my assumption is that lawyers sue everyone with resources in sight. I’d probably want the relatives to have liability insurance. YMMV.

 

[athena53]

^^^^ It is unclear whether bada bing provided a card, what the loans were used for, whether the relatives helped pay anything back or what the risks were to bada bing if a company figured out the ruse, etc. If someone got in a wreck or got very sick, my assumption is that lawyers sue everyone with resources in sight. I’d probably want the relatives to have liability insurance. YMMV.

It's not really a ruse; I had DH added to my card as an Authorized User so he'd have a good credit rating (he was retired and his only income was SS) and he could use the card to get airline and hotel points, which went on my accounts but were used in our travels together. I suppose that bada bing could be held liable for healthcare costs put on the card- not sure how he/she would be liable if the relative got in a serious at-fault accident and had inadequate limits unless it was a rental that said relative charged on the card- but then I'm not an expert at searching for deep pockets.

I agree that you need to be very careful about who gets added on to your card. I did offer to co-sign a mortgage for DS when he got his first house- it was amount I could have paid on my own if he defaulted but I would have been MOST unhappy. Fortunately he found a program for first-time buyers with a good rate and it wasn't necessary.

 

[jazz4cash]

^^^^ It is unclear whether bada bing provided a card, what the loans were used for, whether the relatives helped pay anything back or what the risks were to bada bing if a company figured out the ruse, etc. If someone got in a wreck or got very sick, my assumption is that lawyers sue everyone with resources in sight. I’d probably want the relatives to have liability insurance. YMMV.

Ok, this caused me to go back and reread thinking I had missed something but I still don’t follow this response at all.

 

[AudiDudi]

A couple yrs ago I checked my card balance (only have one) 2 days before the cut-off period. I paid the balance in full so they reported $0 balance to the credit bureau - my credit score dropped 27 points. The next month, it came back up when they reported a balance.

 

[zippy2020]

Once your work record is established, it carries less weight as time goes by. What counts most over time is your average monthly debt to credit limit percentage, and how fast you pay it off.

Income counts to establish your charge card credit limit, but has nothing to do with HOW you are managing your debt-to-credit ratios.

 

[bada bing]

^^^^ It is unclear whether bada bing provided a card, what the loans were used for, whether the relatives helped pay anything back or what the risks were to bada bing if a company figured out the ruse, etc. If someone got in a wreck or got very sick, my assumption is that lawyers sue everyone with resources in sight. I’d probably want the relatives to have liability insurance. YMMV.

There is no "ruse". This is a well documented feature of the FICO system, it has been utilized by many thousands of people. It is not an unintentional oversight on the part of credit agencies, it has been available for at least 2 decades. I am not an advocate or proponent, just reporting what is available for reasons why a senior might care about maintaining their credit report.

As far as risks, no actual loans are made (google what a shared secured loan is if you are unfamiliar). I provided no one a credit card and no charges were made, nor was actual access to making charges. Credit unions provide shared secured loans as part of their services. Credit card companies provide for authorized users and the ability to manage or shut off authorized users. Credit card companies and credit unions are both primary customers of credit reporting agencies. They all know this is done, the companies facilitate this, and its done by many thousands of people every year. It is not a "ruse".

Now whether its the proper way to structure a credit reporting system, that discussion is beyond this thread's topic. But like structuring income by multi-millionaire retirees for ACA subsidies, it isn't an unintended loophole, or they would change it.

 

[brett]

My fico score at the moment is 846.

It is quite meaningless to me. Retired, have not had a mortgage or loans for decades. Most of our income is from investments. As much as possible goes through our credit cards. I cannot ever remember paying any credit card interest...ever.

It has fluctuated from time to time from the low 800's. No idea why, nor do I care.

We are just not bothered about it. I was told by someone that your credit score was reflected in your home and auto insurances premium. Not certain if there is any truth to this.

 

[rayvt]

I’m still miffed that to change our cell phone provider they wanted to do a credit check for a plan that was under $100/month. .... I think this day and age to have credit checks for all these superfluous things is ridiculous since they can just cut you off for non payment.

It's worse than that.
If you want to open a new bank savings or CD account they will pull a credit check. If you have frozen your credit report at the 3 agencies, the bank will turn down your application.

How does that make any sense?? You want to give them your money and they insist on checking your credit report.

I got refused on opening a couple of high-yield online savings accounts and they would not/did not say why, just "We decline your application." Finally I called and asked one and was told that having a credit freeze would cause an automatic decline. So I did a one-week thaw at all 3 agencies and re-applied.......and got the account instantly.

Then went back to the 1st bank that declined me, called and told him that I had just un-froze my credit, and he said "Ah! You are one of the smart ones. Your application should go through okay. Our computer system will automatically decline an account application if it can't pull the credit report."

 

[rayvt]

I haven't altered my auto-pay schedules in 10 years and my scoring is still working. I have 5 cards total and I've set 3 of them up to be paid off to zero balance a day before their respective reporting dates.

How does your auto-pay know the balance? Do you run this? Or is it the auto-pay you have set up at each card account? If that, I didn't know you could do that.

 

[Closet_Gamer]

I think the mechanisms of FICO are just a sign of how screwed up our society is in regard to debt, living-above-your-means, etc.

I'm about the best credit risk you can find. Probably better than the federal government right now. LOL.

But I'm not the best credit customer you could find. You will only get a dollar of interest or a fee out of me if I completely fumble the ball.

Ultimately, that's what this is about.

 

[Chuckanut]

IIRC, the banks have some legal obligation to confirm that you are you, and not up to something illicit. Apparently, getting a credit report helps them fulfill that obligation. Perhaps those in the banking industry and confirm or debunk this.

 

[athena53]

It's worse than that.
If you want to open a new bank savings or CD account they will pull a credit check. If you have frozen your credit report at the 3 agencies, the bank will turn down your application.

Yeah, I was caught with a version of that when I went to get myself added to the Garden Club's checking account as Treasurer. Went in, talked to the nice young man, signed a lot of stuff, got home and he called to tell me they'd been unable to run a credit check on me because my credit was frozen. I assume that permission was buried in the paperwork but it was the first I was aware of it. I asked him why they needed than and he claimed that they didn't look at my reported income, spending, etc. "It's just to verify you are who you say you are".

Except that they'd already seen (and scanned) my driver's license.

 

[bada bing]

"Know Your Customer" procedures are required by current Anti-Money Laundering Laws. Basically, large financial transactions require venders to check off boxes showing they have properly identified who they are dealing with. Pulling a credit report is one way (but not the only way) to comply. A lot of lazy institutions will go right for pulling a credit report as the easiest/quickest way to check the box. That's one reason why car salespeople will tell you they have to pull your credit to sell you a car. Same thing for a lot of financial transactions with a bank you are not established with.

 

[Koolau]

My score hovers around 820. If I cared to, I could increase that by several points (perhaps 840) just by prepaying my CC bills (IOW letting the CC company have my money before I charge anything.) Sorry, it's not that important to me. My "high" score didn't help much in getting our last mortgage as that was the late 00s.



SO, I just pretty much ignore the whole "score" thing. YMMV

 

[athena53]

SO, I just pretty much ignore the whole "score" thing. YMMV

In some states your credit score can be used for auto and homeowners insurance rating. There's a clear correlation between loss potential and credit scores (people with lower credit scores are more prone to losses). It's also forbidden in some states since there's no clear causation so they can't let credit score affect your rate- but that's the main reason I make sure mine is respectable.

 

[thatguy]

Within a few months
1.My bank transferred the servicing of my mortgage to another service provider, whatever it is that they are called. The new service screwed up the rate, which was resolved with a phone call. Apparently this looks like another mortgage on my credit report

2. I was able to refinance from the old ARM to a fixed low interest home equity loan. Reduced my payment by $170. It's set up for automatic payment. Another mortgage on my credit report.

3, My bank got bought by another bank. New bank name. New bank has my mortgage. Looks like another mortgage on my credit report.

So all I got is one mortgage. The credit report shows 3 recently closed mortgages and one active mortgage. That's the only thing I can see that's different. I've got several decades of good credit history.
My credit score has dropped 40 points. At least it has not gone below 800.

 

[PointBreeze]

Part of what will help credit score is showing that if you have debt that you will pay it. If you have no debt then lenders have no way to know if you would pay any debt. If you have debt, though, you will be helped by making on time payments.

Agreed. My credit rating was always 840+ until I paid off the mortgage. Now it is 790-800.

 

[tryan]

My score varys by 20 pts between BOA and credit Karma....certainly not an exact science