Watching "Maxed Out" (see my last post) inspired me to pull my credit report. You can get three free credit reports per year, one from each of the three agencies. You need to go to www.annualcreditreport.com to receive the actual free reports as there are many scams, just google "free credit report" to see a few examples.
After reviewing my report with nothing out of the ordinary I decided to get my credit score as well which costs an additional $7.95 from TransUnion. It came back that I am in the 43rd percentile, much below where it seems I should be based on my faultless payment history. So I sought out a second opinion. Over at MyFICO.com (this is the big dog of credit scores) you can receive your FICO score free for thirty days (make sure to cancel or it is $90/year after the free trial). I signed up for the trial and found out that their credit score ranks me in the 85th percentile. So what's the deal?
Based on the same information one company lists me as a risky borrower and another rates me as "GREAT." If I were in the market for a home loan the difference between the two scores could easily make for a several hundred dollar increase in the monthly payment (nearly $200,000 over the life of the loan). I don't know what is weighing down the TransUnion score as they wanted more money to analyze my results. The MyFICO came with a break down which listed the one negative on my account a new line of credit within the last year (hooking up gas and electricty to our apartment rates negatively on my credit!?!)
As I stated earlier: the credit score is bull shit.
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2 comments:
I feel your pain!
As with many people, credit and its scores are complete BS on how they are set up and with three different companies to choose from. It gives the lenders / banks more free reign to deny who ever they want. As you stated one company rated you as great and the other rated you as not so great. So this would give a lender free reign to either deny you or jack up your rate on any type of loan or credit since he himself can see all three scores as well.
I like how the Credit system works as well. You pay bill for how many years and have a checking account for how many years. In no way does paying bills or keeping a balance in a checking account help your credit in any way. But if you default one time on not paying a bill because of hard times or having a zero balance for to long due to begin laid off. The bank or utility company will report you and down the tubes goes your score.
Ohhh wait I paid bills for how many years and it helped me in no way but the first time I mess up. They are like a pack of ravaging animals and they want nothing more than to take me down. These companies can be as slow as they want to fix your problems or return money they owe you but the second you cant pay, they want to persecute you.
Credit scores are nothing more than the corporations of America and the lenders screwing its fellow people over and giving nothing in return other than a score that mean nothing and is based on shady numbering system.
Not to bring up a dead topic here, but I'm with you on this. I believe the credit score fallacy is basically just systematic extortion against those who NEED to borrow to attain funds. For people who don't need to borrow, the credit score has always been worthless. They pay cash. Well, with the gub-ment printing currency like it's on hyper-print, the dollar is worth less than ever before, so you gotta have more. We bought into the home-buying myth, with help from our lender-enablers, so cash is low. Now, when we need to borrow money, the banks are nervous and pulling everyone's credit line, so that further lowers your "score". Oh, and the previous poster who was very astute in observing that paying for years doesn't improve your score, but one missed month on the car or credit card, and they jack the heck out of you on the report. One more note: if there are three different agencies reporting very different numbers, what validity do any of them have? None, but it's another reason to decline credit or employment, because there are already more mouths to feed than jobs available.
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