Know Where To Fix Your Credit Score By Getting Your Reason Codes
If you want to improve your credit score, a score from 300-850 that lenders use to determine whether you qualify for a loan and how much interest to charge you if you do, you'll want to know your "reason codes." These are 2-digit numbers that come with you credit score when you purchase it. Each bureau usually gives you four reason codes with their report, so get your score from each one for a total of 12. One wiki tutorial says that reason codes are listed in order of importance. Armed with that, The Mechanics Of Credit site decodes all the reason codes and prescribes solutions for each one. With this info and tactics, you should be able to boost your score a couple of points and save a bundle.
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Let me ask you all this: what is the difference between a FICO score and a PLUS score? My info got stolen from Horizon BCBS (emphasis on the BS) and they gave me a free year of credit monitoring from the three big agencies...and I could view my credit score, but it was called "PLUS" and not FICO. Is there a difference?
FICO score is the Experian branded credit score. There is more information at the bottom of the page from the article inked to in this post.
Where are these "Reason Codes" listed? I just checked my two most recent credit reports (Thank you annualcreditreport.com) and couldn't find anything remotely close.
@teh: That's because they're not on your credit report, you can only get the reason codes when you buy your credit score.
oh that one guy bid $679, what a dick!
The FICO score is a joke. It's based on an algorythm by Fair Isaac Company, and it weighs things like number of accounts, types of accounts, balance vs. credit line, number of times 30, 60 & 90+ days late, public records, etc. The trouble is, there are so many different scores, weighted to specific industries (Auto for example - many lenders look for the "Auto Enhanced" score) that we don't have just ONE score. It's impossible to keep an eye on your number. The best advice - pay on as agreed, on time, and don't carry a balance on your credit cards.
@Tank: agreed. when applying for a loan, credit score is of little value. an underwriter is more concerned with looking at the actual accounts. i believe credit cards, are probably one of the only things based off credit scores.
i've seen 740's but the individual were like 18 and only had one credit card. doesn't mean they could handle a $10,000 loan. i've also seen 540's with perfect pays on everthing but medical bills (which they don't pay at all)
@Tank: & check your free report once a year from each of the 3 major bureaus thru [www.annualcreditreport.com] (NOT FREECREDITREPORTRIPOFF.COM) to make sure there aren't any inaccuracies.
@snoop-blog: Unfortunately, the credit score is the first acid test for many loan underwriters, and if the score isn't in the proper range they won't even bother looking at the rest of the customer's application or credit history. Gone are the days when people actually made loan decisions based on the "Four C's" - Credit, Character, Capacity, and Collateral. Now if the first one doesn't meet the guidelines of some board of directors, none of the rest of it matters. A credit score is not a credit history.
For many credit cards, humans don't even look at reports and scores. It's all automated, no matter how sophisticated the algorhythm, unless you call in and ask for a manual recon.
why is the range 300-850. is that just to make the folks with terrible credit feel good? why not 0-550? sort of like tennis i guess... one point is really 15, and zero = love!
SirKeats: the tennis scoring system was created so that the 'simple' people of the time would not know whats going on. it was another way to seperate the elite and poor.
@ ekthesy: The FICO score is a score developed by Fair Isaac Corporation (FIC). The three bureaus have licensed the algorithm from FIC for many years (FIC has been around since the 1950's), until recently when they worked together to come up with their own score to compete with the FICO score (VantageScore). Ultimately, they are trying to unseat the FICO score as the leading score used by lenders to identify a person's credit-worthiness.
One or two of the agencies have licensed and rebranded the FICO score and sell it as their own, so that may be what you were seeing (Plus Score).
And remember that you can always get your FREE credit check from annualcreditreport.com. By law, the big three agencies have to give you one report per year, free of charge. Oh yes, they will try to sell you services before they let you see your report, but keep clicking, it works
don't confuse credit report with credit score. they are two different things.
My FICO score often dips down into the mid 500's yet I've never had a late payment in my half-century life. I do, however, had a long history of taking advantage of zero interest balance transfers, credit card cash rebate offers, and other things that cost banks money.
So much for the correlation between credit scores and real risk.
The credit reporting agencies are getting stupidly specific with wording. They will give you a free credit report every year but there is no law that says they have to provide the actual score. I just got all three of my reports this year. None came with the FICO score. I had to sign up and then cancel a membership to get it. They will try to screw us out of every dollar they can.
@Ryan McFarland: Not true. Experian's branded score is the PLUS score.
The wikiHow article states "Credit scores aggressively marketed by TransUnion and Experian are their own proprietary credit scores."
FICO stands for (F)air (I)saac (CO)rporation, which has nothing to do with Experian other than Experian sometimes sells FICO scores. FICO is simply the most common score.
You have to be careful when getting scores from the credit agencies that you're getting the FICO score, and not the agencies' branded score.
See the link and scroll down for more info.
At least I have found that knowing your score is a great way to impress the hardcore landlords and realty agencies in New York city. Helps them pick you for an apartment over someone with a lower score.
Rental real estate here is brutal if you are looking for a place, some a-holes demand first and second months rent, last months rent, deposit, and then a brokers fee. That can easily be a five digit check to move into an apartment.
Broken link, Ben.