Cashing in on your good credit

It's comforting to know so many of us are sitting in front of our houses with the car running to keep it cool, wearing our horn rim glasses, and fiddling with our pocket protectors so we can make notes about a story on NPR.

Such a sense of community.

Actually, it is perfectly legal and I am truly surprised that it has NOT been made more public.


Remember... about a year and a half ago, I was posting about working on our credit and trying to buy a house?

Well, one of the things our mortgage company told us to do was to sign on to someones credit card that had been open for 5 years or more, was not over the limit, and had less then 3 late payments in 2 years.
I was told that this was going to cause an increase in our credit score that would allow us to give less then 10% down on a house and not get trapped into balloon payments and other financial dumps.
At that time, we both had credit around 600-620. Barely enough to be noticed by ANY company..

From the Sunday newspaper:

http://www.mcall.com/business/local/all-harney0617.5893350jun17,0,3495271.story

Evidently the loophole will be blocked in September.

hmmm...

It's a shame it will also be closed for those who have a good reason for wanting to use it. Like a young person who will responsibly pay his/her bills will no longer get mom and dads willing boost.

Actually, I've learned something from all this. We move our long term debt around onto different cards to get year long interest free periods. We just applied for a card under Mr. Teas name, as most of the debt is on my name at the moment.

This time, we knew not to put my name as an authorized user.

The article said the updated version will be available to lenders. Does that mean the lenders will use it. What if they choose not to. Since
this credit for rent is legal and a law isn't being broken who says the lenders will use this updated version.

Why September? Why not sooner? Just thoughts

I'm assuming that Fair Isaac is changing it's software programs that calculate FICO scores. It takes time to roll out new software. It's the lenders that object to the old (current) way of calculating the scores and have asked for a modification of the calculation schema. There's no reason to think these same lenders won't use the new version of software when it becomes available.

So, we have 3 main credit reporting agencies and according to my paperwork lenders can use the scores from those agencies or different scores from other models and it can vary from lender to lender.

What am I missing then?

I don't know...what are you missing?

Supposedly as of September, being an authorized user on a credit card will not mean that account will be on your credit.

It's not a matter of the lenders having a choice to "use" anything. The credit reports just won't show those credit accounts.

And yes, there are 3 credit reporting bureaus. Lenders can look at one, two, or all three. Up to them.

According to the paperwor from my credit score report it says:

"Your credit score may be different from the score used by a lender, and it may be different from lender to lender, depending on the scoring model used. Please be aware that there are many scoring models used in the marketplace, and each lender's scoring model has its own set of factors........."

I may be wrong, but I think that's referring to the fact different lenders look at different bureaus(one may use just one, another will use all three), and they can come up with different scores, because they may average your scores between multiple bureaus.

Either way: there are three bureau providers, and only these three are what lenders base their decisions on.

The three bureaus apply different weights to the different items on the scorecard. For instance, one might deduct 20 points for having over $10,000 in available revolving credit and another might not deduct anything for the same item. Or, one might deduct 50 points for late payment history, another could deduct 75, and the third deduct some other amount.

When I r'cd my credit report, it listed all three bureaus, their composite scores, and the items that were reviewed/classified, and the identification of any points that were deducted from the maximum.

An even bigger difference is some lenders will report to one bureau and not the other. So you may have a late payment ding with a bank, and one bureau could show it and another won't.

Which means you could have a huge swing in your score from one bureau to the next(if you've missed payments)...and that comes down to a yes or a no for a loan approval depending on which bureau(s) that lender you're applying with is looking at.

The 3 main credit bureaus use VantageScore. It is the 1st to be jointly used
by all 3. Not all financial institutions use the same scoring process. That is the
way I interpret everything I have read.


You can find the press release at the following:
http://www.equifax.com
bottom, left side, next to what is new. Click where it says VantageScore...

Here is another direct quote from this link:
https://www.experian.com/consumer/credit_score_faqs.html

"Is there just one credit score?
One of the most common myths about credit scores is that there is only one credit score.
Web sites or financial advisors who claim there is only one "real" credit score are either misinformed
or are being misleading. In fact, there are many different credit scores used by lenders - some
estimate more than 1,000 - although some
scores are used more predominantly than others.
While there are many credit scores on the market, VantageScoreSM is the first credit score developed jointly
by Experian and the other national credit reporting companies, Trans Union and Equifax.
Return to top"

If anyone knows something different in regards to this topic I sure would like to know about it.

This is a good thing and a bad thing. Good because no one can "steal" your good credit. Bad because authorized users USE the credit and can bring up the score just as well as bring it down.

I get the concept now except when I receive my "free" credit report from the 3 bureaus that is all I receive - a report, no scores.

If I want to see my score I have to pay for it and that report shows a score with no explanation of how the score was determined.

Now I understand more clearly this "loophole".
Thanks