What's a good credit score?

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awintensiveporpoises
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What's a good credit score?

Post by awintensiveporpoises » Mon Apr 07, 2014 3:59 pm

relative to getting the cheapest rates on auto loans and home loans? I'm assuming 730+?

rec7
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Re: What's a good credit score?

Post by rec7 » Mon Apr 07, 2014 4:19 pm

760+ is the top step

rbrown599
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Re: What's a good credit score?

Post by rbrown599 » Mon Apr 07, 2014 4:26 pm

760+ is the top tier for mortgage rates.

Source: I worked in the mortgage industry, directly responsible for mortgage pricing.

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awintensiveporpoises
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Re: What's a good credit score?

Post by awintensiveporpoises » Mon Apr 07, 2014 5:21 pm

rbrown599 wrote:760+ is the top tier for mortgage rates.

Source: I worked in the mortgage industry, directly responsible for mortgage pricing.

Thanks. This is a big help. According to credit karma, my credit score is 738, due to my only debt being credit card related (paid off in full every month) and my lack of credit longevity - only a couple years or so.

Any advice for how to raise the credit score? How will I know once it reaches 760? I have a feeling credit karma overestimates my true number. TIA.

jh-1391
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Re: What's a good credit score?

Post by jh-1391 » Mon Apr 07, 2014 5:29 pm

I'm curious how to raise your score also. My debts are an auto loan and mortgage, 4 years of history (credit card), 2 credit cards paid off in full every month, and I can't seem to get to the top tier. Is time just the only thing that will raise it?

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Steelersfan
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Re: What's a good credit score?

Post by Steelersfan » Mon Apr 07, 2014 5:34 pm

jh-1391 wrote:I'm curious how to raise your score also. My debts are an auto loan and mortgage, 4 years of history (credit card), 2 credit cards paid off in full every month, and I can't seem to get to the top tier. Is time just the only thing that will raise it?
It probably varies somewhat by company, but here's a general description from one of them:

http://www.myfico.com/crediteducation/w ... score.aspx

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pjstack
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Re: What's a good credit score?

Post by pjstack » Mon Apr 07, 2014 5:40 pm

One way is to decrease your debt to credit ratio. If you can increase your credit limit (and possibly decrease your credit usage) that will help your ratio.

Even if you pay off the balance(s) every month (good), you probably have a balance whenever the agency decides to check it, therefore you will always have debt balance of some sort when they check. (Unless you cease using it for a couple of months)
pjstack

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Re: What's a good credit score?

Post by placeholder » Mon Apr 07, 2014 6:03 pm

Frankly a lot of it's just longevity like my FICO has gone up substantially (Discover says to 829?!) from 1999 mainly because I got mortgages and paid them without missing payments and had multiple credit cards and paid those without missing payments etc.

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Re: What's a good credit score?

Post by FlyOverState » Mon Apr 07, 2014 6:32 pm

awintensiveporpoises wrote:
rbrown599 wrote:760+ is the top tier for mortgage rates.

Source: I worked in the mortgage industry, directly responsible for mortgage pricing.

Thanks. This is a big help. According to credit karma, my credit score is 738, due to my only debt being credit card related (paid off in full every month) and my lack of credit longevity - only a couple years or so.

Any advice for how to raise the credit score? How will I know once it reaches 760? I have a feeling credit karma overestimates my true number. TIA.

Why? Are you planning to borrow money soon?
Thanks, | John | | FlyOverState

Angelus359
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Re: What's a good credit score?

Post by Angelus359 » Mon Apr 07, 2014 6:53 pm

awintensiveporpoises wrote:
rbrown599 wrote:760+ is the top tier for mortgage rates.

Source: I worked in the mortgage industry, directly responsible for mortgage pricing.

Thanks. This is a big help. According to credit karma, my credit score is 738, due to my only debt being credit card related (paid off in full every month) and my lack of credit longevity - only a couple years or so.

Any advice for how to raise the credit score? How will I know once it reaches 760? I have a feeling credit karma overestimates my true number. TIA.
Credit karma gives you a fake credit score.
It's not the FICO score. They use their own system for creating a score, based off of your report. They can be an upwards of a hundred points different.

Want some advice on how to raise your credit score? Simple. Get atleast 3 annual fee free credit cards.

I recommend one of them being Discover IT, as they give you your *actual* credit score on your statement, every month.

Use 2 of them once per year. Do a full statement balance autopay.
The third one, get a small reoccuring expense that is less than 8% of your credit limit. Place it on the card. Set it to full statement balance autopay.

Take all 3 cards, put them in a drawer.
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Johm221122
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Re: What's a good credit score?

Post by Johm221122 » Mon Apr 07, 2014 7:00 pm

Walmart CC also gives free Fico score and it's a easy card to get.I think they still give cash reward for opening(must make purchase) Good way to add to your available credit
John

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awintensiveporpoises
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Re: What's a good credit score?

Post by awintensiveporpoises » Mon Apr 07, 2014 7:58 pm

Angelus359 wrote:
awintensiveporpoises wrote:
rbrown599 wrote:760+ is the top tier for mortgage rates.

Source: I worked in the mortgage industry, directly responsible for mortgage pricing.

Thanks. This is a big help. According to credit karma, my credit score is 738, due to my only debt being credit card related (paid off in full every month) and my lack of credit longevity - only a couple years or so.

Any advice for how to raise the credit score? How will I know once it reaches 760? I have a feeling credit karma overestimates my true number. TIA.
Credit karma gives you a fake credit score.
It's not the FICO score. They use their own system for creating a score, based off of your report. They can be an upwards of a hundred points different.

Want some advice on how to raise your credit score? Simple. Get atleast 3 annual fee free credit cards.

I recommend one of them being Discover IT, as they give you your *actual* credit score on your statement, every month.

Use 2 of them once per year. Do a full statement balance autopay.
The third one, get a small reoccuring expense that is less than 8% of your credit limit. Place it on the card. Set it to full statement balance autopay.

Take all 3 cards, put them in a drawer.
I don't think Credit Karma gives a "fake" score, the score is just the highest of the 5 scores (normally averaged) - maybe the Transunion score? Also, if I were to follow this advice and get three new credit cards, my "average age of credit" metric - a HUGE percentage of determining my total credit score - would crash, dragging my overall credit score with it.

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I like CreditKarma

Post by davebarnes » Mon Apr 07, 2014 8:11 pm

Not the absolute number, which is crap, but the trends.
My credit union tells me my FICO (one of them anyway) every month.
I do recommend using CreditKarma for what it is good for as it is free.
A nerd living in Denver

Angelus359
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Re: What's a good credit score?

Post by Angelus359 » Mon Apr 07, 2014 8:42 pm

awintensiveporpoises wrote:
Angelus359 wrote:
awintensiveporpoises wrote:
rbrown599 wrote:760+ is the top tier for mortgage rates.

Source: I worked in the mortgage industry, directly responsible for mortgage pricing.

Thanks. This is a big help. According to credit karma, my credit score is 738, due to my only debt being credit card related (paid off in full every month) and my lack of credit longevity - only a couple years or so.

Any advice for how to raise the credit score? How will I know once it reaches 760? I have a feeling credit karma overestimates my true number. TIA.
Credit karma gives you a fake credit score.
It's not the FICO score. They use their own system for creating a score, based off of your report. They can be an upwards of a hundred points different.

Want some advice on how to raise your credit score? Simple. Get atleast 3 annual fee free credit cards.

I recommend one of them being Discover IT, as they give you your *actual* credit score on your statement, every month.

Use 2 of them once per year. Do a full statement balance autopay.
The third one, get a small reoccuring expense that is less than 8% of your credit limit. Place it on the card. Set it to full statement balance autopay.

Take all 3 cards, put them in a drawer.
I don't think Credit Karma gives a "fake" score, the score is just the highest of the 5 scores (normally averaged) - maybe the Transunion score? Also, if I were to follow this advice and get three new credit cards, my "average age of credit" metric - a HUGE percentage of determining my total credit score - would crash, dragging my overall credit score with it.
The credit score is the credit karma credit scoring algorithm applied to your transunion credit report.


As to getting 3 credit cards, I didn't say get 3 **new** credit cards. I said get 3. If you already have 3, that fulfills the requirement.

If you have student loans, or a mortgage, either of those can replace a credit card in my method. You need atleast 3 credit accounts, with some usage, and a credit card, that is regularly used but at a low usage percentage.

Having 3 open credit accounts, actually will give you a temporary reduction in credit score, but over time will actually improve it.
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awintensiveporpoises
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Re: What's a good credit score?

Post by awintensiveporpoises » Mon Apr 07, 2014 8:52 pm

Angelus359 wrote:
awintensiveporpoises wrote:
Angelus359 wrote:
awintensiveporpoises wrote:
rbrown599 wrote:760+ is the top tier for mortgage rates.

Source: I worked in the mortgage industry, directly responsible for mortgage pricing.

Thanks. This is a big help. According to credit karma, my credit score is 738, due to my only debt being credit card related (paid off in full every month) and my lack of credit longevity - only a couple years or so.

Any advice for how to raise the credit score? How will I know once it reaches 760? I have a feeling credit karma overestimates my true number. TIA.
Credit karma gives you a fake credit score.
It's not the FICO score. They use their own system for creating a score, based off of your report. They can be an upwards of a hundred points different.

Want some advice on how to raise your credit score? Simple. Get atleast 3 annual fee free credit cards.

I recommend one of them being Discover IT, as they give you your *actual* credit score on your statement, every month.

Use 2 of them once per year. Do a full statement balance autopay.
The third one, get a small reoccuring expense that is less than 8% of your credit limit. Place it on the card. Set it to full statement balance autopay.

Take all 3 cards, put them in a drawer.
I don't think Credit Karma gives a "fake" score, the score is just the highest of the 5 scores (normally averaged) - maybe the Transunion score? Also, if I were to follow this advice and get three new credit cards, my "average age of credit" metric - a HUGE percentage of determining my total credit score - would crash, dragging my overall credit score with it.
The credit score is the credit karma credit scoring algorithm applied to your transunion credit report.


As to getting 3 credit cards, I didn't say get 3 **new** credit cards. I said get 3. If you already have 3, that fulfills the requirement.

If you have student loans, or a mortgage, either of those can replace a credit card in my method. You need atleast 3 credit accounts, with some usage, and a credit card, that is regularly used but at a low usage percentage.

Having 3 open credit accounts, actually will give you a temporary reduction in credit score, but over time will actually improve it.
Ah, gotcha. Hmm, interesting. Why does the 3 number matter - used only to increase available credit?

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Re: What's a good credit score?

Post by munemaker » Mon Apr 07, 2014 9:31 pm

awintensiveporpoises wrote:
rbrown599 wrote:760+ is the top tier for mortgage rates.

Source: I worked in the mortgage industry, directly responsible for mortgage pricing.

Thanks. This is a big help. According to credit karma, my credit score is 738, due to my only debt being credit card related (paid off in full every month) and my lack of credit longevity - only a couple years or so.

Any advice for how to raise the credit score? How will I know once it reaches 760? I have a feeling credit karma overestimates my true number. TIA.
My family's experience is credit karma scores are about 10 points below fico scores used by lenders. This is based on a sample size of 3, so it may not be universally true.

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Re: What's a good credit score?

Post by Ketawa » Mon Apr 07, 2014 9:46 pm

I have been applying for lots of new credit cards for the signup bonuses. Four of them now show up on my credit report. My Credit Karma score went down 46 points from December to March. Over the same time period, my official FICO score reported through Barclaycard went down only 11 points. The VantageScore reported by Credit Karma went up 27 points. YMMV.

I think the Credit Karma web site doesn't count hard inquiries correctly, since my official Equifax report shows a lot more inquiries than Credit Karma. Credit Karma seems to count the number of different companies that made inquiries, as that matches the number reported on the web site.

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Re: What's a good credit score?

Post by carorun » Mon Apr 07, 2014 9:53 pm

If your score is 760ish, would you get the same mortgage rates as someone with an 820?

Serious question; I do some credit card churning for the miles (and I travel for work which is what runs up the tabs) so if I need to stop to get up to 820 before I get serious about house shopping, I will.

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Re: What's a good credit score?

Post by Angelus359 » Tue Apr 08, 2014 10:11 am

3 is actually a minimum

A negative mark on your credit, is actually owing money on too many accounts simultaneously.

If you have only one credit card, then owing money on it, makes it 100%.

If you have 3 or more, it's 33% or less.

Another positive mark is to owe money greater than 0%, but less than 10% of any given card's limit, but also your total limit.

Owing more than 20% of your limit harms you.
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rbrown599
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Re: What's a good credit score?

Post by rbrown599 » Tue Apr 08, 2014 10:50 am

vachica wrote:If your score is 760ish, would you get the same mortgage rates as someone with an 820?

Serious question; I do some credit card churning for the miles (and I travel for work which is what runs up the tabs) so if I need to stop to get up to 820 before I get serious about house shopping, I will.
The actual rate on the mortgage is a product of a lot of different variables - down payment, debt-to-income ratio, waiving or not waiving escrows, paying points, term, FHA/VA/Conventional product, standard or jumbo loan, etc.

However, if you and I had the exact same scenario on paper (purchasing same house, using same product, same liquidity, same DTI, same everything) except I had a 760 and you had an 820, we would both receive the same rate. 760 FICO is simply the lower boundary for the upper tier in one of the matrices of pricing mortgages. All else equal, a 760 is no different than a 761 which is no different than an 820. So I wouldn't worry too much, as long as you don't drop below 760.

Edit: Be advised that mortgage rates are tied to the bond market and can change within seconds. So a mortgage banker can call you and offer you a 4.5%, hang up, find out that the bond market has tanked while you were on the phone, and have to call you back an hour later to tell you that the lowest rate you can get now is a 4.875%. Hopefully, none of you have encountered that. Last year I experienced a market shift that was so dramatic that we had to close the pricing desk for a few hours. We came back and found that our 3.375% products had just become 4.25% products. We had a lot of unhappy customers because they tried to play the market. Nothing we could do.

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Re: What's a good credit score?

Post by kingomri » Tue Apr 08, 2014 12:14 pm

Ketawa wrote:I think the Credit Karma web site doesn't count hard inquiries correctly, since my official Equifax report shows a lot more inquiries than Credit Karma. Credit Karma seems to count the number of different companies that made inquiries, as that matches the number reported on the web site.
Credit Karma looks at your TransUnion credit report. When a company pulls your credit, they may pull it from one or more of the three bureaus (TransUnion, Equifax, Experian). The difference in inquiries between your Equifax and Credit Karma are not due to errors in Credit Karma (it's actually quite good for tracking inquiries - its calculated score, on the other hand, is almost worthless), but rather due to the distribution of where your creditors happened to pull from. They have largely pulled from Equifax and not from TransUnion.
vachica wrote:If your score is 760ish, would you get the same mortgage rates as someone with an 820?

Serious question; I do some credit card churning for the miles (and I travel for work which is what runs up the tabs) so if I need to stop to get up to 820 before I get serious about house shopping, I will.
Yes, 760 is as good as 820. I believe my score was in the mid-700s (around 740 or 750 or so) and I got the best available rate for my mortgage. Churn away! One thing to consider though, is stopping applications around 6 months to 1 year before applying for a mortgage. The mortgage company doesn't just look at your credit score, they also look at your reports as a whole. If they see you applying for a lot of credit in the past 6 months or the past year, it could make them skittish, fearing that you're desperately seeking credit because you're in financial trouble.

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Re: What's a good credit score?

Post by kingomri » Tue Apr 08, 2014 12:25 pm

Sorry for the double-post. I wanted to address another question.
jh-1391 wrote:I'm curious how to raise your score also. My debts are an auto loan and mortgage, 4 years of history (credit card), 2 credit cards paid off in full every month, and I can't seem to get to the top tier. Is time just the only thing that will raise it?
Time is certainly a factor. However, except for making payments on time and having no negatives on your report (35% of your score), by far the biggest impact on your credit score is your credit utilization (30% of your score). Your utilization is your balances divided by your credit limit. Also, when we talk about your balances here, we are typically talking about your statement balance (some CC companies report more frequently, but not typically). Even if you pay in full every month, it's typically your statement balance that gets reported to the credit bureaus. So if you have a relatively small $1,000 limit and you run $500 through your card every month, you're going to have a high utilization.

Ways you can improve your credit utilization are to increase your credit limit (which will, for many credit card companies, result in an inquiry, so it will ding your credit a small amount in the short term), or to pay off your credit card before your statement cuts (i.e., on the day your statement is generated, make sure you have $0 balance, or a low but trivial balance).

Also keep in mind that you should be looking at both your overall utilization (that is, the sum of all your balances divided by the sum of all your limits) and each card's individual utilization. Keeping both below 20%, or ideally below 10%, is a good starting point.

If you really want to optimize your utilization, it's generally thought that having a balance on only one card with a utilization of around 2% and 0% on all other credit cards is optimal. If you have zero balance on all your cards, it's frowned upon by the credit scoring algorithms. On the other hand, if you have a bunch of cards and have balances on many or all of them, even small balances, that's frowned upon as well. Hey, nobody said credit scores made sense.

Edit: Also worth mentioning. Scoring for credit card utilization does not have a historical component. That is, it only looks at the most recent data.

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Re: What's a good credit score?

Post by grabiner » Tue Apr 08, 2014 11:00 pm

awintensiveporpoises wrote:Thanks. This is a big help. According to credit karma, my credit score is 738, due to my only debt being credit card related (paid off in full every month) and my lack of credit longevity - only a couple years or so.
Credit Karma gives you two different credit scores, neither one FICO. The Trans Union score is significantly lower than FICO, and 738 is pretty good, the top of Trans Union's B range. The VantageScore is significantly higher, and isn't even on the same scale, as FICO is 300-850 and VantageScore is 501-990.

There isn't a direct conversion because the scales for different scores vary, and if you use Credit Karma for a while, you can see this effect; I have seen my VantageScore change significantly from month to month when my Trans Union score barely moved. If you are in the market for a mortgage and might be on the margin, you should pay for an actual FICO score.

Another benefit of getting an actual FICO score is that you will have reason codes which explain the reasons that your score is not better. Credit Karma's letter grades cover the main factors, but they simplify each factor down to a single number, which is often misleading. For example, the total number of accounts is a factor in your credit score, but so does whether they are open or closed, and what types of accounts they are.
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Re: What's a good credit score?

Post by NOLA » Tue Apr 08, 2014 11:26 pm

I'm not the OP, but wanted to thank everyone that has contributed. Been curious about credit scores as well.

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Re: What's a good credit score?

Post by scotthal » Wed Apr 09, 2014 12:03 am

grabiner wrote: Credit Karma gives you two different credit scores, neither one FICO. The Trans Union score is significantly lower than FICO, and 738 is pretty good, the top of Trans Union's B range. The VantageScore is significantly higher, and isn't even on the same scale, as FICO is 300-850 and VantageScore is 501-990.
Not sure if the Trans Union score reported by Credit Karma is always significantly lower than FICO - mine has been parked around 806 (+/- 2) for the past few years, while the "official" Experian FICO score ranged from 805..822
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Re: What's a good credit score?

Post by Angelus359 » Thu Apr 10, 2014 6:08 pm

scotthal wrote:
grabiner wrote: Credit Karma gives you two different credit scores, neither one FICO. The Trans Union score is significantly lower than FICO, and 738 is pretty good, the top of Trans Union's B range. The VantageScore is significantly higher, and isn't even on the same scale, as FICO is 300-850 and VantageScore is 501-990.
Not sure if the Trans Union score reported by Credit Karma is always significantly lower than FICO - mine has been parked around 806 (+/- 2) for the past few years, while the "official" Experian FICO score ranged from 805..822

My credit karma score is higher than my experian fico
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