As a follow up to the post I wrote a few days ago about the new consumer protection laws and the possibility that thrift stores would have to stop selling children’s items, I was happy to come across this article tonight. Looks like second hand stores will be ok. Now we just have to make sure that the same is true for mom and pop businesses that make clothing and toys for kids… call your congressional reps!
And now for my two cents on credit scores. Since we’re considering buying another house, we decided to take a peek at our credit scores. We get our credit reports every six months or so, but have never paid to see our credit scores until now. We went to the annual credit report site and picked Experian. Credit scores were $5.95 each, and the credit report is free (we normally just get the free report). We got my husband’s score first, and it was great. It put him in the “super prime” category, which is what Experian calls their best credit scores. No surprises there. Then we pulled my credit report, and I was in their “prime plus” category. I was two points below the cutoff for super prime, and my credit score with them is still considered very good. But I’m a bit of a perfectionist, and when there’s a super prime option out there, I don’t want to be prime plus (pout). My husband, who is very good at finding humor in just about any situation, thought it was quite funny that I (Miss Frugal Babe, and household money czar) somehow had a lower credit score than he did.
Just about all of our accounts have been joint for at least the last six years. But I’ve never had a car loan, and he had one when we met. He hasn’t had a car loan since 2002, but it does still show up on his credit report, and I’m sure that’s giving his score a bit of a boost.
But here’s the part that gets me. Experian gave me a list of things that are lowering my score. Of course time was a factor (when will this not be the case? I’ve been in their files since 1997). But the number one reason they listed was “The average loan amount across open, recently reported real estate accounts, such as a mortgage, is too low. Having low loan amounts has a negative impact on your credit score.” Are you kidding me??! After the mortgage debacle that has ripped through the American economy over the last year or so, that is still considered a valid reason for a credit score to be lowered? Maybe someone should let them know that people are defaulting on mortgages all across the country right now, and a big reason is that mortgage lenders approved people for loans that were too big (and used creative financing to seal the deal).
Ugh. I checked my report closely, and everything is in order. And I gotta say, I’d rather have a credit score that is two points below what Experian considers “super prime” than have a higher score and a higher mortgage balance. Mostly I’m just amazed that any credit reporting agency is still encouraging bigger mortgages right now, and penalizing for smaller ones, considering the state of the mortgage industry.
Have any of you ever paid to see your credit score? Ever been surprised by what you saw, or by the explanations given?
The Happy Rock says
That is why it isn’t it is a debt score. One that is designed solely for getting you into more debt and how well you manage debt. It doesn’t say much about how intelligent you are with money. It is a stupid system and one that encourages unwise financial action IMO.
With those type of scores you will be fine, but if you have problems with the lenders that do ‘rubber stamp’ lending than make sure you find a company that does manual underwriting. One that will make an actual person look at your history, only then will they realize that you are an extremely low risk for them.
It is a dumb system.
lolgator says
The system is “messed up”. Doing the responsible things hurts your FICO score. Paying off a credit card and then canceling the card hurts your score. Go figure.
Green Me says
We just re-fied and had a similar experience. Except that I had the super and hubby had the plus. He has always pulled in more mulla than I and now I get paid in baby grins and kisses. But, we paid off my car loan 1.5 years ago and we still have his. I’d say it hurts you to not have a loan or to have one unpaid, but helps you to have paid it off.
Kelly says
My husband and father in law have the same birthday and same first, middle initial, and last name. When we pulled our credit report a couple years ago to buy our house, we were interested to discover my husband had a Sears charge card open since 1977. He was born in 1976. Ummm…a one year old with a charge card? I don’t think so. We have had many little mix ups in that regard. My husbands stuff on my FIL, my FIL on ours. It is a very imperfect system and hugely frustrating.
FrugalBabe says
Kelly, My brother and father have the same name, but not the same birthdays, and obviously not the same ssn. And the credit reporting agencies still get their stuff mixed up. It is absolutely a frustrating system, especially since so much is riding on a credit score if and when a person tries to get a loan.
Gord says
I would recommend everyone check their credit report. I couldn’t believe how many errors there were on mine. Some of those errors had a big effect on my score. Like the bank line of credit that was tied to a house I used to own….still showed me owing $75,000 even though the house had been sold and the credit line paid(it has to be, or the title won’t clear the sale). Numerous other accounts showed as being open and owing balances (but not in arrears) So, if for no other reason, check your report for errors! They are usually easy enough to fix, if you don’t mind being on the phone for a couple of days…..
Becca says
My husband and his father have the same first name, same middle initial, and same last name. We recently moved to a completely different state. We now get AARP mail for my father in law, credit card applications for his now defunct flower shop, credit card apps for his wife, and general junk mail for both of them. Luckily, the credit reports themselves are clean on our ends, but it is so irritating to have to deal with their junk mail. (I opted out of junk and credit card offers for ourselves a LONG time ago.) And of course, my husband wants to give our first son a similar name. Will the madness ever end?
MITBeta @ Don't Feed the Alligators says
I’m confused by the first link in this post. It links to the other post, not to any article that updates the information about the reselling of kids clothing. Am I missing something?
Thanks!
MITBeta says
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FrugalBabe says
MITBeta – Thanks for the heads up on the link! I fixed it, and now it goes to the news story about how thrift stores aren’t going to have to comply with the testing rules.
AnnJo says
A lot of credit scoring is counter-intuitive.
My auto insurance gives big discounts for high “insurance scores” which correlate highly with your credit score. I was a few points short of a higher discount and thought I could increase it by cancelling an old credit card that I was no longer using. Big mistake.
I’d had the card for probably 15 years, and gradually the credit limit had been increased (not by my request) to over $35,000. I hadn’t used it in 5 years, and figured the high credit limit, combined with all my other credit lines, must be hurting my credit score even though most of that credit wasn’t being used.
Turned out the higher the ratio between your available credit and the credit you actually use, the better. So it’s better to owe $1,000 on a $20,000 credit line than $500 on a $1,000 credit line. But I’m not sure that applies if you REQUEST the increases in credit lines, as opposed to just getting them from the company for whatever reason they give them.
Also, by eliminating a card with a very long history, even one that I wasn’t using, I lost a few more points.
My insurance company was very helpful in figuring out what would help and what had hurt. Wish I’d called them first.
Kacie says
i hate credit scores! They are super dumb. Mine is going down, since I’m no longer using credit cards or applying for loans or anything.
I don’t have a mortgage (but will probably try to get one in a few years) and I don’t want to pay a higher interest rate because of it. So, I might end up charging my cell phone bill or something each month just to keep my credit score active.
If you don’t want to pay for your credit score again (I’m sure you don’t!) you can visit http://www.creditkarma.com and view it for free. It’s ad-supported, I believe.
LM says
I just checked our scores, and am mystified that my husband’s score has not improved since we bought our condo. In fact, it’s gone down since we got the condo. We always thought his scores were lower than they should be because of the lack of a real estate mortgage. He makes substantially more money than I do and pays off his credit cards every month. The only debt he has is our mortgage.
Meanwhile, when refinancing my mom’s property with her, I discovered that my mom’s credit score is about 80 points above ours. She has been on SSI since 1987 and has about $4k in credit-card debt, making only $600 a month.
I’m continually confused.
suzannah says
i’m not sure that children’s product resellers are out of the woods, yet: “The new safety law does not require resellers to test children’s products in inventory for compliance with the lead limit before they are sold. However, resellers cannot sell children’s products that exceed the lead limit and therefore should avoid products that are likely to have lead content, unless they have testing or other information to indicate the products being sold have less than the new limit. Those resellers that do sell products in violation of the new limits could face civil and/or criminal penalties.”
the way that press release is worded, it doesn’t sound like it would be worth the legal risks to resell children’s stuff…
what a sad, terrible mess!
another crazy credit report thing–they lower it ever time anyone does an inquiry into your credit, for whatever the reason. dumb dumb dumb.
kim says
My FICO dropped 40 points when I paid off a high balance zero interest promo right before it was over. It was a high credit limit card and I canceled it. That was a really big shock to me.