Speaking of getting married - I've often come across the misconception that married couples have some kind of shared/combined credit file/score.

That and not understanding that not all Equifax/Experian/Transunion scores are actually FICOs, and that if they're not FICOs, they're no use to anyone. People are always posting excitedly about their fantastically high EQ/EX/TU scores on myFICO.com's forums, only to be very disappointed when they figure out that those PLUS scores etc are worthless, and their real FICOs turn out to be nowhere near that high.

What about Innovis?

@MsAnthropy: I'm in the middle of refi right now. And when I got the package from my lender, the first page showed my EQ/EX/TU scores. So, I don't know if they're worthless, per se.

And if one in a marriage, is a significantly higher earner, with significantly higher scores, you might want to have that partner carry the mortgage in his/her name. You can deed the house together, but only one partner have his/her name on the mortgage statements.

@MsAnthropy: I think the reason that there is a misunderstanding about marriage stems from some kind of actual linkage from the past. My mother always complained about how, even though she had a very reasonable income, and her husband was unemployed at the time, that places like Macy's and Sears wouldnt grant her credit without putting it into her husbands name.

Although this isnt the case anymore, I am sure that there is still quite a .. well for lack of a better term.. old wives tale about it.

@missdona:

That's not what I meant. FICO scores from EX/EQ/TU = useful. "PLUS" scores and the like, which pull information from your EX/EQ/TU credit files but use a different scoring formula to come up with some wildly different number = not so much. Probably didn't explain myself very well - I'm not quite awake yet!

We are in the middle of a REFI and my credit score is much higher than my husband's (he doesn't have any real debt [no credit card debt, no student loan debt, etc.] but he ignores all bills so he has collections from a couple of medical bills and the collections are for amounts like $100 and one is for $27). My bank told me that Mr. Sam's score doesn't really matter because I'm the primary wage earner. I still want to get Mr. Sam's score cleaned up but he could care less.

@SadSam:

Is the loan in both your names? I thought if they were taking both spouses income into account, they'd use the middle FICO score of the spouse with the lowest scores (if that makes sense - as I said above, I'm not awake yet, and the ability to be coherent won't kick in until I've had another cup of tea!), in which case your husband's scores would be especially important. Maybe it's different with refis? I remember when buying our house, my scores were irrelevant because they were a lot higher than my husband's, so we were working like crazy on trying to get his as high as possible.

@Davan:

Wow, that is craziness! And that aspect of it hadn't occurred to me - I can imagine that in the past, when married women were less likely to have any independent income, all accounts would be in the husband's name. But if the wife is the one with an income and the stores STILL insist the husband has to be the accountholder... yup, that'd explain where ideas like that come from!

Actually, that reminds me - I've heard of similar things happening in the UK, with the husband being automatically put as the primary accountholder for a loan, first name on the mortgage, etc, even if the loan was based solely on the wife's income. Hopefully that doesn't happen anymore!

@missdona:

Oops, missed the last part of your comment about having the mortgage in just one partner's name. I'd agree on that one, definitely - if one partner has really high scores that would qualify for the best interest rates, and a high enough income to qualify for the loan on that income alone, getting the mortgage in just that partner's name could be the best plan. I have a vague feeling you can't do that (have both partners names on the deed if they're not both on the loan) in every state, though.

What I was told about joint credit line is that the lender usually goes with the lowest score. Is this right?

I never understood this obsession with FICO scores. If you are someone who is buying a home or car every month then yeah, maybe you have to worry about the score...

But for the average Joe who pays his bills as he should there is no reason to worry. For some people it is like they are obsessed with have a high FICO as if it is a challenge.

My only flaw in this credit game is that I pay $11 to AmEx each month for monitoring, I'm more worried about my identity being stolen than my score...

On a interesting side, AmEx did take away the ability to me to repay large purchases over $200 or travel on my charge card.. a feature I never used and reduced my credit line with my Blue to a far more reasonable limit that they originally gave me. Granted I have only been with them for about six years but still, I have great credit and I only carry a small balance that is paid off at the end of the month.

@Nick1693: Good question.

Innovis is the "fourth CRA" that's commonly neglected and if I say so myself, rightly so.

Many creditors don't report to them (even if they report to a combination of the 3 major CRAs) and I have yet to hear anyone being denied credit due to an Innovis pull.

I've even heard that Innovis seems to get more information about you whenever you request for a copy of the Innovis file (though I cannot comment on the validity of this comment; if it's true, I wouldn't be too surprised).

@snowburnt: Every creditor has a different policy.

What you described might be correct for some creditors. It may not be the case for others.

@Trick:

The obsession with fico scores is that so much of everyday life is based on it. If you have any of the big credit cards, Amex, BOA, they do a periodic check of your credit and adjust interest accordingly. One small mistake, like paying a bill just one day late, will impact your score by as much as 20 points. I had a credit card with a zero balance that I use periodically and pay off in full when I do use it, that makes my score drop because I only use it once or twice a year. And that score affects all of my other cards. Not to mention that some car insurance companies are now pulling your credit score to base what they charge you for insurance.

I worked for a mortgage broker for quite some time (thankfully, I moved on to a better career). One common misconception was that you should close accounts that have been paid off.

I saw numerous people who were so proud, as they should be, to have recently paid off revolving accounts so they would be in a better position to take on a mortgage. However, many had closed the recently paid off accounts only to find their credit score had actually taken a hit due to the change in credit-debt ratio. This problem was most common with long-standing accounts that had been closed. For people who already have good credit to start with, this will usually not be a problem. But for those who are already on the borderline (subprime territory), it could be an issue.

Unless you have many accounts, you will most often be better off to leave the accounts open. Open accounts with low balances, especially long-standing accounts, will almost always have a positive impact on your credit score.

@jrobcet:

Ah, I have been that exact same person! About 10 years ago I had a ton of credit card debt I'd accumulated during college. I worked on paying off each and every one of those cards, and then each time I got one down to zero, I'd call and close the account. Poor clueless me! :(

@Trick:

If you're applying for a mortgage or car loan, every last point can be vital. But even when you have no intention of applying for anything, even if you don't need to keep quite such a close eye on your FICOs, you'd still do well to keep your credit scores in mind if you want to avoid adverse action such as ratejacking and credit line decreases from lenders you already do business with. AmEx in particular is big on this right now, but they're far from the only ones. Even if you have a card report to the CRAs in such a way as to appear maxed out (regardless of whether you pay it off in full by the due date), that could trigger a score drop and adverse action from a jumpy issuer. There have been plenty of cases of people having their credit lines slashed or accounts closed outright because a company they're already doing business with doesn't like what they see on a recent credit report. It used to be the case that you wouldn't suffer these kind of consequences from an issuer unless you went over your limit with them or missed a payment. Now they don't just care about how you handle their account, they care about how you handle ALL your accounts - and you don't even need to have a late payment etc reported on any account at all to trigger adverse action, something like a score drop due to increased utilization could cause them to panic and take action.

All sounds a bit paranoid but it happens. You don't need to be "obsessed" with your FICO scores by any means, and you don't need to constantly check your scores to have a good idea of what kind of range you're in at any given time, but it IS wise to think about how your credit picture looks even if you're not planning on applying for a mortgage anytime soon. I don't want to be the one paying inflated interest rates (OK, NOT paying inflated interest rates, as I don't carry a balance) or having my credit line cut, if there's anything I can do to avoid it.

Good article, but the first point is misleading. You do have many different credit scores and different banks and lenders look at different scores. AnnualCreditReport does not give you a score, you need to either go to all the credit agencies to pay for your score, or go to a site like www.GoFreeCredit.com and get your report and score for free, along with a free Credit Monitoring trial to help protect your credit and combat Identity theft

@MsAnthropy: By virtue of being married it is REQUIRED that both spouses sign the mortgage documents. Being married makes a home a spousal asset. In fact if you have a home prior to being married and then get married and refinance yoru spouse will need to sign the documents

I don't even care about my FICO score. The times I really need to be loaned money no institutions will lend to me and the times I don't need it they are always willing to do so. The system is stupid and crooked in favor of whoever is owed the debt. I refuse to participate in it and I buy things cash only.

Some states allow insurers to use FICO scores to rate insurance risk, and higher FICO scores can result in significantly lower (or higher!) home and car insurance rates. So for those of you saying FICO scores are only for credit and therefore don't matter to you - think again.

Myth: You must have a social security number to obtain credit, Your credit is based off your SSN or "we *need* your SSN to check your credit".

Unless specifically required by law, such as opening a bank account which falls under the Patriot Act, a SSN is not required to apply for, retrieve, or obtain credit or a credit report, nor does your SSN determine your credit worthiness. Nor do the big 3 file your credit report by your SSN, if you ever order your credit report, you'll notice each bureau has a unique report number, which is not your SSN. When applying for credit the credit bureaus use computer matching to attempt to locate your file, your name, date of birth, address, previous address, and yes, ssn[IN COMBINATION, *NOT ALONE*, with the other data]. Individuals who don't provide SSNs will still have a credit report as the big 3 care about data mining and marketing that information.

There's even more than 3 scores. Each bureau has specialty products geared toward a specific industry. A mortgage based FICO score model will give you different scores than just a general FICO. In addition there are multiple models for different bureaus which are not industry specific: example TU98, TU04 and the still non-existent TU08.

@thrid001:
Wrong. Just because you're married doesn't mean the mortgage has to be in both names. I did a stint as a loan officer. Husband has a 520 and the wife has a 750? Yep. That loan is not going to have the husband in the equation at all. I'm not sure where you've gotten this information from.

@MsAnthropy: You've got the middle score part right, but when I used to be a Loan Officer, we'd use the middle score of both spouses if the loan was in both of their names. As long as it was in an acceptable range it was fine.

@thrid001: FWIW, it is not functioning that way in our home and mortgage today. My husband and I were married for a year before we bought our condo. The condo was entirely financed under my name, income and credit scores, but both of our names are on the deed and tax documentation.

And the refi is solely in my name, too.

@thrid001: Utterly,completely wrong. I bought before marriage and refi-ed after marriage. No changes were required on the title and only my signature went on the new loan.

While this won't help me any if we ever divorce, it did keep my spouse from signing for some ridiculous amounts of home equity loans during the bubble. Which is why that person's name is still not on the deed.

@MsAnthropy: Married folks don't share files or scores, but in some states, creditors can come after you for the spouse's debts. That's probably the biggest source of this "combined score" myth.

Related to Myth #1: Doesn't FICO keep its own version of your score? So aren't there actually four different versions of it?

And Myth #2: Checking your score won't hurt it, unless the institution doing the check screws up and does a hard check when they are supposed to do a soft check.

@Blaaaah:

Yes the loan is in both of our names, but I earn significantly more than Mr. Sam. I also have an 805 FICO score and we don't have any debt except for the mortgage. Although, I guess that's not really true since Mr. Sam does have some small unpaid medical bills that have gone to collection.

@missdona: Since his name is on the deed he has EVERY right to determine any financing that you do with it. The mortgage may be done in your name only, BUT your husband had to sign off on anything he did with HIS property. Think about it logically. You cant sell the house without his signature, and a mortgage is a promise based on HIS property. The income, and credit can come from anybody, but if your husband did not sign it, the mortgage company could be shit out of luck should your husband and you break up.

@bwcbwc: I do not know what state you are in, but most states he becomes an owner based on the fact he married you. Any refi you do after marriage has implications on him as well, thus he has the right to say you mortgaged his property without his consent, unless of course he signed off on this. It does nto require he be on the loan, BUT he would be required to consent to any mortgage period. No mortgage company would allow you to knowingly refi without a spouses permission and signature due to his standing as a part owner of the asset.

@thrid001: Of course. It's his property as well as mine. I did not finance the property alone to make it "mine" and to protect it from my husband. We financed it that way because it was most advantageous to us as a couple. I'm solely the "responsible party" for the mortgage, so if we were to split, the mortgage company would still expect me to pay, even if my husband has equal rights to the property.

My mortgage company is totally aware that we are married, and he is not on any of the mortgage or refi documents. Of course he's aware that the refi is happening, yet he does not have to legally consent to the fact that the mortgage terms are changing.

Is it a myth that blemishes on your credit report absolutely won't disappear before 7 years or so? Or is 7 years just the maximum amount of time a bureau is permitted to report an account that went to collections?

2 of the 3 credit bureaus no longer show my unfortunate incident with Verizon, even though it happened in 2005.

@snowburnt:

Pretty much all mortgage lenders go with the lowest score of any applicant on the loan.

@FDCPAGuy:

People definitely need to know this - especially if they've been doing "quick fixes" for higher scores like reducing net fraction of revolving debt hoping it will help out with a car loan (but having a few slow pays on auto loans). Yes, your general score could shoot up to the 700s by paying down credit card debt, but your Auto Fico is not going to be good if you have poor car credit.

No one's ripping you off - lenders are looking for specific models to see your likelihood of repayment for automotive, mortgage, and credit card debt.

There are also non-FICO scores that are used - like the Bankruptcy Risk score. That score is one where you want a low score. It's used in conjunction with FICO.

On top of that, most major lending institutions will also develop internal scores that work in conjunction with the FICO score. They will measure the risk factors that have been most important to their portfolio for the last 3-5 years and have fewer factors, but be just as important as FICO when it comes to making their decision.

Basically, don't believe singing pirates. General FICO isn't the end-all-be-all. There's a lot more to the lending process - it's multi-dimensional so banks and lenders can feel more confident that they're making the right decision (especially automatic decisions).

The line about hard inquiries not hurting your score if you are shopping for a loan is bogus. My credit score took a 60-80 point hit over the course of a week while shopping for a mortgage. This was a drastic concern because it almost disqualified me from the mortgage I wound up choosing.

@mahpartysocks: A lawyer told me that there are three ways to get a claim removed: the creditor removes the claim voluntarily; sue the creditor, forcing them to remove the claim; or wait until 7 years after the start of the claim.

You can also dispute the claim with the CRAs, but that often won't end in your favor--the creditor would have to completely ignore it, because they can just say "yes, it's correct" and the CRAs will believe them. The real dispute must occur between you and the creditor or between you, the creditor, and a judge to ensure results.

Now, the "start of the claim" is when the damage occurs, not when the claim appears on your credit report. So, when the last payment was made on a loan, when a contract is broken and the rest unpaid, etc. Each claim must be made with a date that indicates when that debt was due and went into delinquency, and the claim disappears entirely 7 years from that date.

The myth as you stated is wrong. They can and will disappear (or change) before 7 years are up. After 7 years, they are gone. There may be exceptions (I could have sworn it was 10 years for bankruptcies).

@ohiomensch: In these cases it's not necessarily the drop of 20 points that the credit card company is reacting to -- often times they'll look at other variables (such as "how many times have they paid late in the last 3 months") to make quick decisions.

It doesn't help that the current condition of the economy is leading credit card companies to tighten up the leeway you get before they decide you are much riskier than they originally thought.

@SadSam: @SadSam: Maybe you should repay those medical bills then, and not just because of his credit score. Since your husband used their products/services, he should, you know, pay for them.

I equally took a 60-80 point hit shopping for a car loan, with the combination of loosing a lease (that started at 40k) with a tiny balance for the remainder of 2008. Once that came off my score, within minutes I went from 740 to 698. Which changed my loan status from automatically approved, to just about automatically denied with this economy.

Will it hurt my credit score if I pay it off every month, or should I keep a running balance?

@azntg: i believe the gov't reports public record data to innovis (which explains why they have more personal info than the big 3), but you're right - most lenders don't report to them. oh & i think the GSEs also report data to them.

they definitely have more personal data - my innovis file has every address/phone #, employment info & aliases going back at least 10 years, whereas a typical big 3 report will only show current & last previous (& sometimes not even that if it's older than 2-3 years).

@Lucky225: At least for mortgage credit reports, the credit bureaus require you to enter the person's SSN to get their credit report. If you enter something else like all zeros, you generally get some of the information back but often they will actually block you, because they think you're trying to get access without the consumer's permission. So that is not entirely a myth.

@BaronVonHawkeye: The way the system works ideally is that every time your credit report is pulled for the purpose of a mortgage, the inquiry is coded to indicate that purpose. In reality, some places that pull your report may not be returning the proper code to the credit bureaus. And your recourse in those instances is.... NOTHING

@Blueskylaw: won't hurt your credit score to pay it off every month (won't affect your credit score either way). The credit card companies probably won't report the zero balance anyway, they'll report your balance at whatever time of month they decide to report to the credit bureaus.