One additional thing that I find interesting is that our credit score dropped 30 points (60 total) for each of us because we missed one payment, even though we have made payments on time for four to five properties going all the way back to 1999. A quick mortgage calculation of 4 properties at 12 months, and 9 years yields 432 payments on time not to mention the additional payments of credit cards, utilities, medical payments, etc, which would probably double the number to around 800 payments on time over the last decade. I am not sure how the numbers are calculated, and according to the search that I did, neither is the rest of the country.

http://www.ezinearticles.com/?FICO-Score-Scale&id=408238

What is clear to me is that after reading the following paragraph,

“Calculating one’s FICO scores is a closely guarded secret, companies consider several factors prior to interpreting one’s FICO score. Usually, finance firms and banks take into account as much as five credit accounts that have been in use for at least a year in order to determine one’s capacity to be given credit to and his/her ability to pay for loans or credits. Pre-determined weighted factors are then used to calculate one?s FICO scores which are then checked against the given FICO score scale”.

is that it behooves the financial corporations to have people with low FICO scores so that the interest rate charged on lended money is high enough to provide financing/Lending institutions the largest ROI for any corporation sector in the US for the last several decades. It seems to me that there is a bit of a conflict of interest when it comes to the lending institutions calculating ones ability to repay loans. Maybe it is time for the closely guarded secret to be a little less opaque.

This is a deceptive way to herd people and their finances off the cliff. Meanwhile the institutions that have made bad decisions on who to lend money, are getting a big bailout. I wonder what the FICO score is for Fanny Mae?

Thanks for the link for the national average. I see those ads on Yahoo claiming the average but wonder if they are correct – LOL.

I have obtained all three credit reports and none had errors (thank goodness). But the one agency didn’t have my Prosper loan included since Propser only reports to the one agency.

That’s pretty aweful that someone else’s credit history was with yours! I think I’d faint if I saw that!

Have you obtained your actual credit history from each of the 3 agencies? ( http://www.annualcreditreport.com ) If not, you might be surprised to see some differences between them — different subsets of your credit, or actual errors. One of the agencies had someone else’s credit history mixed with mine.

Welcome to this week’s edition of the Carnival of Personal Finance. I’m sticking with my usual method of hosting a carnival — listing a summary of each piece with the author’s reason for submitting the post to the carnival (for…

Jason – I guess I will just keep paying down my debt and watch my TransUnion score. The main confusion about the length is that my revolving credit length = my credit history length. The one card I received in college was the beginning of my credit history and I still have that card.

Jen – thanks! Thankfully my scores are fairly high and I am happy about that.

KIM – I guess that makes sense if you close a card. I plan on keeping mine open at least for a while. That’s awesome that you locked in a 5.75% rate. A few years ago when we tried to get a mortgage, the best we could get was 8%. But back then my credit was in the 600 range.

As for the contradictory comments on lengthof credit history AND debt amount, I’m wondering if it’s a difference between your overall history and the history of one card. For instance, since you have at least card for a while, that gives you a long history. But if you have on card that’s fairly new, then maybe that’s in the negative for a short history? Nutty, I know…

And for the debt amount. Maybe Equifax was looking at the combined debt and available credit across all your accounts, and Transunion was factoring in a credit card that has most of your debt? I had the same comment on my credit scores when the bank pulled them for my mortgage app. But, I have one card that I put 90% of my charges on, so maybe that one card signaled a high debt ratio, even though all my other cards don’t have a balance.

As far as the positives and negatives…I think its best to think of the positives fico gives you as reason why your scores are high and the negatives as reasons that it is not perfect, ie not 850.

So thats why having a long history has helped your score but a “short” history, ie not 30+ years long, is why your score isn’t perfect. In regards to the balances I would bet that 30ish% is where it really starts to hurt your score. So some of the agencies have you on one side of the fence while others have you on the other.

And yet, from my perspective it is not a negative at all, I’m making my money work harder for me, or getting more rewards for my actions, which is a smart thing.

From the company’s perspective, they want my business, which is why they are making a better offer, so they shouldn’t be concerned that I switch to take advantage of better offers, since that is how they intend to get me as a customer.

It seems like the credit reporting agencies are still using the model they used when everyone offered the same thing… maybe we need to point out to them the benefits that exist in switching regularly.