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No major blemishes. Credit Score steadily declining. Help?


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Okay, so, I'm new to this forum. You guys have lots of rules! Oy.

Anyhow, I have been fairly diligent about checking my score over the last few years. I only started getting really concerned about what my score was a few years ago too. I've never had any major blemishes, I am only 31 and do not own a home, but for the life of me, I cannot figure out why my score has dropped significantly in the last six months to a level that... is... well, not so good. I have no idea what I can do to make it better. I've read all the things I can do to increase my score and I'm pretty sure I have been doing those things for some time now, but it's only going down! What gives?

Is it possible to get help without details?... I'm not yet sure what kind of details y'all share here.

(I'm actually from California, not Texas. Hi!)

Blue

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Can we help w/o details....gee that's like asking a physician to heal you without an office visit. Don't have any admitted psychics on the site so....yeah, some details would be necessary.

1. How many CC's?

2. What is the utilization?

3. Last late pays?

4. Any closed by credit grantor?

5. How many installment loans? Are the signature loans or collateralized? How old are they and what is bal vs init loan?

6. How many INQs?

7. Are you looking at FAKOs or FICOs?

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Ha. Okay, besides the cough and sore throat... here it is...

1. How many CC's? - 26 total accounts ever, 12 inst., 14 rev. - all current - 6 rev. remain open, with 9 inst. still open (see question 5).

2. What is the utilization? - 12%

3. Last late pays? - One time that I know of, Dec 2006, 30 days late - it was an accident!!

4. Any closed by credit grantor? - Yes, unfortunately I've just discovered that my oldest card (opened when I was 18) was just closed, likely from not having been used in 4 years. I will try an reopen it. :(

5. How many installment loans? Are the signature loans or collateralized? How old are they and what is bal vs init loan? - One of the installment loans is my car (07), the rest are school loans. Evidently, whenever my school decides they need money, they get a new loan for me. As a result, I have discovered 7! open loans from the same lender all from this year!! (I'm guessing this is what's hurting me - I called the lender and they refuse to consolidate.) One of the loans is for $54!! Ridiculous! Now that I've discovered them, I will pay about half of them, but I cannot get them all closed right away, maybe 3 or so.

6. How many INQs? - 6 INQ's total. All last year save 1 from Jan 08 (two from when I bought my car that were one day apart!)

7. Are you looking at FAKOs or FICOs? FICO

One more thing, my report says that there are 3 delinquent/derogatory, but other than the one time I was 30 days late, I don't know of any other, nor do I see it in the account history. I can't believe how much one time being 30 days late - on accident - can hurt! I've paid probably close to a million payments on time!! What the eff?!

PS You have no idea how much I appreciate ANYONE taking the time to read about my problems and possibly respond. So very grateful....

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Looking over your post, there is little to be concerned about. And, if you aren't planning a major purchase soon, you don't really need a great credit score.

Scores relate to your perceived Risk as a potential borrower, insuree, employee, etc. Equating a drop in score to punishment gets in the way of understanding. Credit scoring software is heavily weighted to recent history. FICO & lenders both know that things change and look to what you done Lately to assess what you may do in the future. So a late payment within the past 12 months can have a huge impact on the 'magic number'. A late payment from 2 years ago isn't having much of an impact at this point. And the impact will continue to lessen as the slip-up ages even more.

FICO-based scores also typically dip when you have new accounts. They offer no data on how you (will) pay them; the unknown equals Risk. This impact also lessens as the tradelines age, even on deferred Student Loans.

The inquiries are nothing to worry about. FICO-based programs factor all inquiries within a specific time period as ONE. They can tell you were car shopping. And that ONE cummulative inquiry only factors as (up to) 10% of the total score.

It's likely that you experienced a drop from the closing of your oldest card. I wouldn't worry about that either. Try to get it re-opened, if you can. If you can't, focus on other things.

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I, too, suggest not to worry.

I have a little different take on the credit scoring process.

First, I would point out that the FICO score you're allowed to see is closest to the FICO Bank Card algorithm. (There are different algorithms for mortgage and cars, plus about 15 different other things.)

Second, I would point out that the FICO Bank Card (I call it the "sucker score) score, in truth, is used by the credit card companies to predict who they will make money from by charging interest and occasionaly late fees and overlimit fees. So therefore, in truth, having a low sucker score (within limits of course) means that you are more likely to be offered even more credit cards.

As Ahntara saisd, a dropping sucker score is not a punishment. It's pretty much a non-event.

Look at my signature....

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Thanks you guys for you input. Seriously, I appreciate it.

It's hard not to view a credit score as a grade for how I manage my finances. I think I do a pretty good job and when I'm scored at "medium risk" (a C!), it bothers (read: infuriates) me.

I actually am hoping to buy a condo in the next few months so that's why my paranoia is ever-increasing on the topic. I hear that it's really difficult to get a loan these days without a really high score. We'll see what happens though.

I guess I have to start looking at it more as the supposed "sucker score" in order to feel better about it. 'Cause the credit companies are definitely not making money off me....

.... hmmm, I have so much to learn! (I'll keep reading for more input for sure!)

Blue

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"...hoping to buy a condo..."

That's different. You do, indeed, have reason to be concerned. In fact, this is the EXACT time to worry about your score.

It's hard to figure out without actuallly seeing your report, but from your follow-up post I still see little to worry about here. If you can wait 'til your most recent SL ages past 6 mos., you should see a little bump.

The ever-increasing SL tradelines is typical. Most student/consumers aren't aware because their SL company tends to lump the loans together when speaking of payments or balance. But what you describe is commonplace for how SL's report. Lenders will be totally fine with it, as long as your DTI remains favorable.

The inquiries and other derogatory data also seems fine. You will be asked to write a letter of explanation for any derog data. Just let them know that you missed a payment, by accident, and that it's never happened again. They'll see that confirmed by your CR.

Your inquiries are fine. The same compiling of inquiries within a specific time period will happen when you apply for a mortgage loan, so keep that in mind. You can take a Consumer-oriented CR to a mortgage broker or banker and begin the qualifying process. (Yes, they will WANT their own CR with their own format, so be ready and be ASSERTIVE.) You can assure them that you are simply protecting your score and will allow a pull once things are (almost) finalized.

Consumers control most of the factors that make up a great score. In specific, this refers to a lack of derogatory data (like you learned with that one missed payment) and Utilization, which is totally within your control. Mortgage lenders like to see a balance on active CC's. For maximum points, it's recommended that you keep between 1% - 9% balance of the highest credit (limit) reported. Keep a rolling balance of that minimum until your loan closes.

One more note from my own experience, since we don't know how comfortable or familar you are with the process...be sure to hire your own Real Estate Attorney to protect you through closing. I think one of the reasons for the current meltdown is too many consumers just signing their names to a big pile of papers without understanding what they mean.

Good luck on your new place!

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Again, agreed, but I think I would word it a little differently. As I said before, what a mortgage underwriter sees is different from your sucker score. Two of the main items in the sucker score..."available credit" and "utilization"...are treated differently in the mortgage score.

The sucker score likes a utilization of around 9%...in other words, CCs are making some money by charging you interest.

The mortgage score likes utilization of 0%...and, prefers available credit somewhere around 5% of your salary. (The mortgage underwriter would prefer you not have CCs that you can run up after qualifing for the mortgage).

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