Strange score reasoning for truecredit.com

[WilliamKF]

Hi,

I have a tri-bureau monthly report and score from truecredit.com

It is reporting scores of TU: 665 EXP: 686 EQX: 694 on scale of 500 to 990.

It reports the following four items are impacting my score:

• None of your real estate accounts show a credit amount. [TransUnion, Experian , Equifax] Lenders may be able to better evaluate your creditworthiness if there is more information about your accounts on your credit report.
  
• The available credit on your open revolving credit accounts is too low. [TransUnion, Experian , Equifax] Having credit available to you is a sign that you are able to manage your finances responsibly. Lenders usually like to see that consumers have a large amount of credit available to them.
  
• The balances on your installment accounts are too high in comparison to their credit limits. [TransUnion, Experian , Equifax] It is a good idea to use your accounts regularly, but remember to keep your balances low in comparison to your available credit limits. Having a high ratio of balances to credit limits on open accounts may be viewed negatively by lenders.
  
• There is a bankruptcy on your credit report. [TransUnion, Experian , Equifax] Negative records, such as a bankruptcy, can substantially impact your credit score.
  

I understand the first and fourth items, but the middle two have me confused. I have a new secured credit card with Public Bank with limit of $2000 and balance of $100. I have educational loans that were not discharged that are all current. I don't see how balance on my educational loans impacts the score? Its not a revolving line of credit, but fixed term loans.

Please suggest how I might improve my score here?

Thanks.

-William

[willingtocope]

Its all horse pucky. Nobody who's going to lend you money looks at those scores (they're FAKos) or that report.

Read my signature.....

[WilliamKF]

If the truecredit scores are useless, what brand of monitoring gives good tri-bureau scores?

[jq26]

truecredit scores are for you to assess your monthly progress. If your truecredit scores are trending up, then it is likely that your FICOs are trending up. However, it doesn't mean that your TC score has any correlation between FICO scores.

In regards to your specific question:

- Balances on educational loans impact your score as they should. That is money you need to pay every month. Someone with a $100,000 balance and a $1200 monthly student loan is definitely a higher credit risk than someone with a $10,000 balance, $120/month student loan payment. All other things being equal, the student loan is a drag on both the balance sheet and the monthly income statement. And it impacts a credit score, regardless of payment history. Think about it from a potential future lender's standpoint.

- Having a large amount of unused unsecured credit is also an indicator of excellent credit. This tends to show that you have the opportunity to spend large amounts but do not because you are responsible. My wife, who has FICOs greater than 800, has a modest salary but has total available credit card limits greater than $50,000. She uses each card once per year just so her creditors don't close them and then pays off the balance in full within 3 days. Compare that to someone with a total available credit of $2000. Once you build that up, your scores will improve.

IMO, TrueCredit is a waste of money. You'd be better off saving that money. If you continue to improve your credit through paying all bills on time, opening new credit, and letting the BK age, your scores will trend up. TC is telling you something you already know.

[willingtocope]

Having a large amount of unused unsecured credit is also an indicator of excellent credit. This tends to show that you have the opportunity to spend large amounts but do not because you are responsible.

I think I'd agree with everything but this statement. This will indeed increase your FICO Bank Card score (the "sucker score") but has an adverse affect on your FICO mortgage score. The mortgage companies know you're just one misfortune away from using all that credit...