Question on FICO score

[grsthegreat]

My insurance company just used my fico score to lower my rates on my new work truck. And i pay cash for everything, but keep a good fico score.

 

[ultrarunner]

Mine will vary 30-35 points depending on how much of my combined limit is in play…

I use to run a lot of my employers expenses through my card and get reimbursed… it would take a hit when I had a lot on it even though paid in full each month.

When my hospital merged with a very large provider… somehow the ATT phone bill went unpaid at Corp during the transition… as accounts payable moved to Corp.

As the phones, fax, Internet was going down I learned it was due to non payment…

The administrator and the corp card both declined so I reached into my wallet and paid the $14,500 charge to restore service within the hour.

My score took a hit for that but then came back higher than ever…

 

[lman]

We froze all of our credit reporting several years ago for security reasons and haven't removed the freeze since. It was recommended after unauthorized credit card transactions. So, it sounds like that is a mistake for insurance?

 

[grsthegreat]

When i purchased the tundra, the salesman came back and told me they could not access my credit score. I simply pulled out my phone and logged into true credit and unlocked the scores. They were able to check them then, after which i relocked them. I really like this feature, as it prevents someone opening a card or credit line against me.

 

[Jstpssng]

I have one card which I use to track expenses on my truck. Usually it's just gas, but last month I had a $500 repair bill, and also insurance due. My balance is a bit over $1100, which caused my score to drop by by 7 points. I will pay it off this month, and it will climb back up again. It means more to me that I had the bank's money free for a month plus, than to worry about those few points on my score.

 

[Joel/ak]

Especially if your not trying to buy a house, etc

 

[Dunno]

I have not read the full lot of answers, so this may have been covered. The credit bureaus are looking at ‘responsible’ credit usage on the balances you have. If you have a $10k limit, and spend over $4000 per month on the card, that is not good usage and your credit will suffer. Get multiple cards, and use them revolving, one then the other. This way the balances on the cards stay lower than putting it all in one card. I think you don’t want to spend over 35% on a card’s limit to stay on the good side of the reporting bureaus.
Pro tip here - Use cards that will reward you with something. I have a Hilton Honors card, an American Airlines card, and another airline card. I stack them in my wallet so when I use one, it goes to the bottom of the stack and the others are used. See where this is going? - free airline trips and free hotel stays (though I absolutely hate flying nowadays). Lots of different rewards, pick what works for you.

 

[jyoutz]

I’m not discounting the need for a good FICO score, but I’m at the life stage where I don’t care what mine is (even though it’s mid 800s). I’m on my last mortgage, have nothing more than a few hundred dollars of credit card debt, and my only other loans are vehicles and my zero interest Kubota loan. If I ever move again, I’ll pay cash on the next place from the sale of my current home. Whenever I need a loan, my credit union gives me the best rates.

 

[Sprinkler Fitter]

I have not read the full lot of answers, so this may have been covered. The credit bureaus are looking at ‘responsible’ credit usage on the balances you have. If you have a $10k limit, and spend over $4000 per month on the card, that is not good usage and your credit will suffer. Get multiple cards, and use them revolving, one then the other. This way the balances on the cards stay lower than putting it all in one card. I think you don’t want to spend over 35% on a card’s limit to stay on the good side of the reporting bureaus.
Pro tip here - Use cards that will reward you with something. I have a Hilton Honors card, an American Airlines card, and another airline card. I stack them in my wallet so when I use one, it goes to the bottom of the stack and the others are used. See where this is going? - free airline trips and free hotel stays (though I absolutely hate flying nowadays). Lots of different rewards, pick what works for you.

We have an $8000 dollar limit on our citibank credit card and we run 3-4000 dollars a month on it for our business but we pay it off as soon as the charges clear the card and I have a decent credit score.

And, it is our only credit card.

 

[Oaktree]

I have one card which I use to track expenses on my truck. Usually it's just gas, but last month I had a $500 repair bill, and also insurance due. My balance is a bit over $1100, which caused my score to drop by by 7 points. I will pay it off this month, and it will climb back up again. It means more to me that I had the bank's money free for a month plus, than to worry about those few points on my score.

When I was still working fulltime, I had one card I'd use for all expenses on the company truck. It was kind of a gas hog and required a lot of repairs, so I racked up quite a bill each month. I let all the rewards accumulate...it almost completely covered a vacation road trip my wife and I did a few years ago.
Gotta say, all that credit (paid in full each billing cycle) goosed my credit score!

I have not read the full lot of answers, so this may have been covered. The credit bureaus are looking at ‘responsible’ credit usage on the balances you have. If you have a $10k limit, and spend over $4000 per month on the card, that is not good usage and your credit will suffer. Get multiple cards, and use them revolving, one then the other. This way the balances on the cards stay lower than putting it all in one card. I think you don’t want to spend over 35% on a card’s limit to stay on the good side of the reporting bureaus.
Pro tip here - Use cards that will reward you with something.

I have 2 cards, a Discover and a Visa. Cashback rewards are different on each one in any given quarter. I'll use whichever one has the rewards that match what I'm buying.

I’m not discounting the need for a good FICO score, but I’m at the life stage where I don’t care what mine is (even though it’s mid 800s). I’m on my last mortgage, have nothing more than a few hundred dollars of credit card debt, and my only other loans are vehicles and my zero interest Kubota loan. If I ever move again, I’ll pay cash on the next place from the sale of my current home. Whenever I need a loan, my credit union gives me the best rates.

I hear ya. At that same stage of life myself. No monthly payments of any kind (other than recurring bills), don't see myself needing a loan ever again. Have always paid cash for vehicles, same for my current house. Still take some pride in having a score that hasn't dipped below 800 as far back as I can remember even if I don't need to take advantage of it.

 

[JasperFrank]

I have an 840+ score also. Online bank portal lets me check it for free. I have never carried a loan of any kind, aside from using and always paying off the C-Cards.

 

[Jstpssng]

My CU and bank each offers credit monitoring now... I didn't even sign up for it. Yesterday I received a notice that TransUnion reported I have a delinquent account, causing my score to drop 53 points. WTF?!?!!

Upon probing further it shows that I defaulted on a balance of $0.00, and $0.00 was overdue. I contacted the bank and they said that TransUnion had a glitch which affected many others besides me and they were working to fix it. No big deal to me but if somebody was trying to close on a house when this came up it could be a problem.

 

[ultrarunner]

Excellent point when errors happen it's not that big a deal when business is the one with the errors.

 

[bdhsfz6]

When I got my first job at 17, I opened a checking account with my father as guarantor. Almost immediately, checks began to bounce. My father called me a bunch of names and threatened to have the account closed until we found out it was the banks fault.

The exact same thing happened a year later with the same bank. I can just imagine what my credit score would have been after those incidents.

 

[ultrarunner]

I opened checking account at 16 with a nod from my dad... the bank had no problem with me opening a savings account alone when I started cashing my weekly paycheck age 13 but checking was different.

The first check I wrote bounced and dad was upset to put it mildly... he said irresponsible!

I showed him I had plenty to cover but then my account went to zero.

We both went in and spoke to the manager... turns out the account number I was given was somehow tied to back taxes and the IRS had all my money!

The bank had it cleared up by the end of the day but it was not easy having done nothing wrong to see Dad so upset..

 

[M59]

This is driving me bat crap crazy....

If you average about 3-4K a month in credit card bills, and they are always paid off on time, but then for a couple of months have a 10K credit card bill (likewise paid off in full before due), would that lower your FICO score?

Sigarms,

First, excellent forum ID from someone who owns many 936s. One for each vehicle.

FICO score/ credit rating scores have some serious problems and your increasing decreasing FICO score based on percentage of credit usage, albeit fully paid off each credit cycle, is a major identified problem and one that may be part of a class action lawsuit. Credit rating agencies do NOT include as part of their rating calculation timely full payment each credit cycle as part of their credit use calculation even though they profess to compute credit ratings based upon a users ability to properly manage credit usage which actuality is the ability to not get behind in credit payments or be constantly running a credit balance by paying the minimum due.

In the big picture a FICO score is only relevant is the following cases
1 Insurers use it to calculate insurance premiums
2 Mortgage, auto loans, and credit card issuers use it to calculate interest rate.

My personal credit score went from 800ish to low 700ish when I sold my business due to "no" weekly reportable income since I'm no longer part of workforce even though the sale generated a large capital gain. This is another significant problem with FICO calculation.

Shifting company expenses from your personal to a company issued credit card will reduce the monthly percentage credit used and will improve your personal score BUT this is only relevant if your credit score drops below 700 since 700 is roughly the breakpoint for extension of preferred credit rates.

In some ways, the FICO or credit scores are a racket because credit issuers are lazy and don't want to individually evaluate each credit requestor for financial liquidity and credit issuers want to shift credit users into higher interest brackets thus plumping up their bottom lines.

ps. My wife, who shifted from paid employment to running the household 37 years ago has twice the credit limit that I personally have. Makes no sense since the monthly payments come out of the same bucket.

pps. I'm dinged on my credit score because I have "too much available credit" per credit rating agencies even though I pay in full each month.

Hope this helps

 

[ultrarunner]

Don't overlook credit reporting when applying to rent...

 

[garry1p]

Several years ago I called one of the reporting agencies and asked why my score was always so low.
They said it was because I had no mortgage payments. DUH my house was paid off.

I was dinged last year for a one time $4000 CC charged that was paid off at the end of the month.
I think I went from 832 to 815.

If you have a low score a car loan officer told me they take someone with a low score and bundle their application with others that have a higher score and can usually get the loan approved that way,

 

[Jstpssng]

I think I went from 832 to 815

That's very temporary though; it should go back the following month.