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Thread: Meet the Credit Score Perfectionists

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    fgg
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    Default Meet the Credit Score Perfectionists

    Meet the Credit Score Perfectionists

    Learn from some credit scoring superstars.
    While most Americans strive for good credit scores, others take special care to achieve great ones. Meet some credit score superstars -- and learn why and how they keep those precious three digits so high.

    Good Scores Key to Financial Health
    Credit scores were developed as tools to help banks and businesses make objective decisions. To generate them, a mathematical formula pulls credit report data and transforms it into a numerical rating. FICO (FICO) scores range from a low of 300 to a high of 850, and according to MyFico.com, mortgage lenders consider anything above 760 as ideal. While it is the dominant score, FICO isn't the sole scoring model. For example, the three major credit reporting bureaus -- TransUnion, Experian and Equifax (EFX)-- produce the VantageScore, with a scale ranging from 501 to 990.

    Despite ranking system differences, a higher score always indicate less risk, and having them makes you more appealing to lenders, employers and landlords.

    Consequently, focusing on scores is only natural. "People are drawn to this subject because it allows them to measure something that they equate to financial health," says Jose Rivas, national education manager for Consumer Credit Counseling Service of San Francisco.
    That focus, however, can turn into anxiety, with conflicting information often to blame. "One article states that consumers should close their unused accounts," says Rivas, "another states that consumers should never close their accounts." For this reason, getting the facts from reliable sources is essential. Like the following high achievers, you can create a terrific credit score with real knowledge and a specific sense of purpose.

    Credit Score Vigilante

    Dan Nainan, a professional comedian who constantly travels between New York and Los Angeles, has carefully built an 830 FICO score. Doing so enabled him to negotiate preferential terms with his premium reward card. "I was able to drop the annual fee for my $450 per year American Express card to $150!" Nainan also cites the "feel-good" factor: "It's a comfort to know that wherever I go and whatever I apply for, I can get it."

    Vigilance is Nainan's strategy. "If there's anything at all that might affect my score, I ask a ton of questions and go to the Internet and do as much research as possible. If I test drive a car, or sign up for a health club, I look at the fine print very carefully to see if they have a right to hit my credit file with an inquiry." He's also programmed everything online "so that all of the bills pay themselves, and any and all credit card balances are paid off immediately."

    Protecting a Long History of Timely Payments

    Want the very best vehicle loan available? Let your numbers do the talking. When Brenda Avadian, founder of TheCaregiversVoice.com, out of Pearblossom, Calif., was applying for a car loan, her 849 score helped her secure top financing. "Saving thousands on interest charges is a tremendous motivator," says Avadian, who locked in 0 percent interest for five years. A loan with a 4 percent rate would have cost her an extra $3,200 on the same vehicle.


    Avadian attributes her impressive score to a long history of timely payments. "And on those rare moments when a bill sneaks under some paperwork and it's either late or due that day," says Avadian, "I call and take care of it." She believes her loyalty to the same banks (three credit accounts -- not too many, not too few) also helps. "Instead of constantly shifting to capture the best deal, discount rate, rebate points, etc., I've stuck with the same folks for years."

    Regular Charging, Zero Balances

    At last check, marketing company president Paul Entin, from Bloomsbury N.J., holds a 990 VantageScore. For him, it's a matter of honor and integrity. "A high credit score indicates your name and your signature on a contract have meaning. It's an indicator of certainty ... of character. It would be difficult to trust someone with a poor credit rating to the same extent you can trust someone with a higher credit rating."

    Entin maintains his high score by using his business and personal credit cards regularly and paying them off every month. "It's not magic -- pay your bills on time and pay the debt. Make it a priority. Pay attention to spending."

    Keeping the Right Mix of Credit

    "Every time someone runs my credit they say, 'Wow, I almost never see someone with credit that high,'" says Carrie Rocha, founder of pocketyourdollars.com in Minneapolis. She keeps it first-rate to preserve her autonomy. "As someone who got out of $50,000 in debt in less than three years, I take a lot of personal pride in my financial freedom." Though Rocha has no plans to borrow money again, "I have no barriers when it comes to employment, insurance or other areas of life where my credit score is used to assess the kind of risk I am."


    Besides "the obvious things like pay my bills," Rocha says she increased her score by talking to her credit union loan officer, who said an overabundance of idle retail accounts was driving it down. She had opened the cards randomly during in-store promotions, but never really charged on them, so there was no history to protect. After formally closing the accounts, her scores that were previously in the 720 to 740 mark rose to the 800s.

    Does the Perfect Credit Score Exist?

    Pursuit of excellence is often wise, but does 'perfect' exist? Yes, says Craig Watts, public affairs director for FICO. "Several thousand consumers do in fact have the highest possible FICO score."
    While not everyone will reach the credit score apex, you can get close by consistently following three simple guidelines:

    1. Pay all bills on time.
    2. Keep credit card balances low.
    3. Take on new credit only when you really need it.

    Don't obsess over small credit score variations. "Lenders decide what score they will accept for their best interest rate product," assures Watts. "They genuinely don't care if your score is 50 or 100 points higher than that."

    Clearly, A-plus credit has its advantages, but there is no reason to go overboard. Find balance between attentiveness and fixation by understanding what those numbers can do for you and knowing how you can improve them. And remember -- credit scores gauge your borrowing history, not your intrinsic value as a person.

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    Friend of Gossip Rocks! buttmunch's Avatar
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    God, whatever happened to the days when you could have a relationship with your bank manager, pay your bills more or less on time, be forgiven if you fucked up once in a blue moon and generally got on with life. I hate the way the world has become. No one's perfect but it seems we're supposed to be. Blah.
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    Quote Originally Posted by fgg View Post
    Credit Score Vigilante

    Dan Nainan, a professional comedian who constantly travels between New York and Los Angeles, has carefully built an 830 FICO score. Doing so enabled him to negotiate preferential terms with his premium reward card. "I was able to drop the annual fee for my $450 per year American Express card to $150!" Nainan also cites the "feel-good" factor: "It's a comfort to know that wherever I go and whatever I apply for, I can get it."
    And what is the fucking purpose of having a near-perfect credit score if you still have to pay annual fees? Your fee is cheaper thatn everyone else's? Whoop dee fucking do.
    FUCK YOU AND GIVE ME MY GODDAMN VENTI TWO PUMP LIGHT WHIP MOCHA YOU COCKSUCKING WHORE BEFORE I PUNCH YOU IN THE MOUTH. I just get unpleasant in my car. - Deej

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    Friend of Gossip Rocks! buttmunch's Avatar
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    We chucked out our Amex cards a few years ago. The fees were stupid and they were assholes about everything.
    'Those who sacrifice liberty for security deserve neither.' Ben Franklin

    "When fascism comes to America, it will be wrapped in the flag and carrying the cross."
    --Sinclair Lewis

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    Elite Member lurkur's Avatar
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    LOL, he goes through all that trouble for a perfect credit score for the resulting lower interest rates and then opts for an annual fee card where he is forced to pay whether he charges a cent or not.

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    What's the point in a good credit score when the bank doesn't want to give out loans anymore? It's all a bunch of shit meant to control us & own us. Fuck that, I've become cash only. I won't have a bank own me EVER again. They can take that credit score bullshit & shove it up their ass.
    I'm not quite drunk enough to really care, but is this her violation of her violation of her violation of her violation of probation or her violation of her violation of her violation of her probation????? ~MontanaMama on LL's latest arrest.

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    Elite Member Quazar's Avatar
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    People worrying that the government has too much information on us are looking in the wrong place. The US is really controlled by banks and big business. They're the ones who collect the detailed information about each one of us and then dictates what we can and can't do in this society. People are worrying about filling out a Census form when they should really be looking at what the credit agencies have collected, and who is looking at that information.

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    Elite Member crumpet's Avatar
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    It is beyond fucked up that your credit score takes a hit any time someone merely looks at your credit history. That is the biggest steaming pile I've seen in a long time.
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    ^Totally agree with that and have never understood the reasoning behind it.

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    Quote Originally Posted by greysfang View Post
    And what is the fucking purpose of having a near-perfect credit score if you still have to pay annual fees? Your fee is cheaper thatn everyone else's? Whoop dee fucking do.
    My thoughts exactly.

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    Elite Member Mivvi21's Avatar
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    Credit scores are a big scam and always have been. Since when is it better to be swimming in debt than to be debt free? If you don't use credit you have no score. It's like punishment for not lining corporate pockets with even more loot. Plus,who even knows how they calculate those scores anyway? The credit scoring bureau's refuse to tell the formula they use to generate scores at all. The whole damn thing is one big legalized racket.

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    Quote Originally Posted by Mivvi21 View Post
    Credit scores are a big scam and always have been. Since when is it better to be swimming in debt than to be debt free? If you don't use credit you have no score. It's like punishment for not lining corporate pockets with even more loot. Plus,who even knows how they calculate those scores anyway? The credit scoring bureau's refuse to tell the formula they use to generate scores at all. The whole damn thing is one big legalized racket.
    Actually, you're not swimming in debt if you have a high FICO score (I have one, and I have no debt). They indicate a strong history of paying your debts on time and of not taking on too much. You can't find out the exact formula, but you can find out what goes into it (see - How Your FICOŽ Credit Score is Calculated - myFICO.com).

    The biggest problem with it is that it is just a number, so if the number is "low", it doesn't indicate why. The same number can result from a strong history, with recent financial problems or past problems, but you're cleaning them up now, or just being generally irresponsible. That's one reason FICO scores are not part of employment credit checks.
    Dear Buddha, please bring me a pony and a plastic rocket...

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    Elite Member Mivvi21's Avatar
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    ^^Actually,Fico scores are a part of employment checks in some cases. They are also checked when obtaining car insurance. Neither one of those things are credit related,and it should be illegal to run credit for either one.

    And,if you do not use credit you have no score;I don't believe that people should be identified by a three digit number some computer somewhere conjures up that is based on secretive,and one sided information obtained from shady credit bureaus. They still want people to have some sort of debt(credit cards,car payments,etc),and if you have none of those then you are sol,no matter how responsible you are. All one has to do is look at the mortgage crisis to see that credit scores are faulty,and that we need to go back to basics of underwriting and screening credit and repayment history the way it used to be.

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    Gold Member Linne's Avatar
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    WTH is a credit score? I don't think we have that at this side of the pond.
    People assume that time is a strict progression of cause to effect, but *actually* from a non-linear, non-subjective viewpoint - it's more like a big ball of wibbly wobbly... time-y wimey... stuff.

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    Silver Member albatross's Avatar
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    Quote Originally Posted by Mivvi21 View Post
    ^^Actually,Fico scores are a part of employment checks in some cases. They are also checked when obtaining car insurance. Neither one of those things are credit related,and it should be illegal to run credit for either one.

    And,if you do not use credit you have no score;I don't believe that people should be identified by a three digit number some computer somewhere conjures up that is based on secretive,and one sided information obtained from shady credit bureaus. They still want people to have some sort of debt(credit cards,car payments,etc),and if you have none of those then you are sol,no matter how responsible you are. All one has to do is look at the mortgage crisis to see that credit scores are faulty,and that we need to go back to basics of underwriting and screening credit and repayment history the way it used to be.
    FICO scores are NOT included in employment checks. All of the credit reporting agencies have special employment reports. These are reports and do not include the scores. They also exclude other pieces of information that is included in normal credit reports (for example, your date of birth is excluded from an employment report).

    FICO scores were established to cut costs - it's cheap and easy to simply set a "low level" and say "if the number is below X the loan is denied". Before FICO scores, loan officers actually had to look at applications and credit reports to make decisions - that took time, money, and relied on human beings, which in the corporate world is increasingly a very bad thing. Now, there's just a number, so you don't need people - a computer can simply make the decision.

    As for the mortgage crisis, that was caused by corruption and greed. FICO scores made it cheaper and faster to grant loans, but the banks decided what the low-water mark was for getting those loans. They figured out a second way to make money from risky loans, so they lowered the bar and made a lot of very risky loans. Now, they've gone in the other direction - they've raised the bar high, and it's hard to get a loan.

    Personally, I don't like FICO scores because they try to simplify complicated issues into a single number, but there is also a lot of mis-information about them, usually related to employment.
    Dear Buddha, please bring me a pony and a plastic rocket...

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