Free Credit Scores

[polo1665]

Not the ones you can get one per year of. These are the ones that Credit Unions, Banks, or Credit Card Companies sometimes provide on the on-line accounts each month as a service.

I had a conversation with the Branch Manager of my Credit Union yesterday and asked why the CU score was consistently 20 points or so lower than the one reported each month by one of my credit card issuers. His answer was surprising.

He told me that those services are a subscription service the lenders subscribe to. There are multiple programs available to them from the credit rating companies. Each subscription looks at different parameters of the borrowers and therefore, the numbers posted will vary by as much as 20 points or more even though both lenders are using the same rating service (both were using Trans Union in this case).

He told me don't put too much into these numbers. Even if someone were to apply for a loan, the credit score they pull would definitely be based on a different program and again the numbers would vary from the free one posted on the website. In an example, he further stated that if one person with say a 720 score and another with an 820 score applied for a loan. They would both be deemed credit worthy and granted the loan if all other parameters were similar as well.

I commented that these free credit scores were really worthless then, and his reply was pretty much! They are just a big picture snap shot in time.

Funny, I've always paid attention to the credit score I am provided by Capital One every month. When I bought my truck a couple of years ago the finance guy said he was impressed by my credit score. He had me at 10 or so points higher than what Capital One reported.

 

[Diggin It]

^^^ Some years back I was at my agent getting quotes for auto insurance. She punched all of the information in and then sort of blinked at her screen. Looked at the numbers a couple of times. Made a comment she'd never seen such a discount based on credit score. Not sure exactly which numbers she was seeing, but it knocked enough off my premium to make her notice.

My tractor loan was approved without any hesitation.

Even if you pay your cards in full every month, you're still 'profitable ' to them if you use them due to the swipe and other transaction fees they get for every purchase.

If you don't use a card, they may either reduce your limit or cancel the card altogether for non-use. I had that happen once several years ago.

To maintain and possibly improve your scores, rotate your cards. Use each one every couple of months, but don't charge more than you can pay off in full at the end of the statement period.

They also look at credit mix ... cards, loans, mortgage, etc. When I paid off my tractor loan recently, my scores dropped due to 'no secured loan'.

 

[polo1665]

^^^ Some years back I was at my agent getting quotes for auto insurance. She punched all of the information in and then sort of blinked at her screen. Looked at the numbers a couple of times. Made a comment she'd never seen such a discount based on credit score. Not sure exactly which numbers she was seeing, but it knocked enough off my premium to make her notice.

My tractor loan was approved without any hesitation.

Even if you pay your cards in full every month, you're still 'profitable ' to them if you use them due to the swipe and other transaction fees they get for every purchase.

If you don't use a card, they may either reduce your limit or cancel the card altogether for non-use. I had that happen once several years ago.

To maintain and possibly improve your scores, rotate your cards. Use each one every couple of months, but don't charge more than you can pay off in full at the end of the statement period.

They also look at credit mix ... cards, loans, mortgage, etc. When I paid off my tractor loan recently, my scores dropped due to 'no secured loan'.

Same thing happened to me a few years back when I paid my house off. I expected my credit score to go up, but it went down instead. It did rebound fairly quickly though (within a few months).

Anyone else notice the trend lately to charge a convenience fee to people using credit cards? I've been noticing it more lately at restaurants, and even more so, gas stations.