Usually very closed-mouth about how it calculates scores, FICO released a whole bunch of data about how being late on your mortgage payments affects your credit score. For instance, being 30 days later on a mortgage payment can chop your 780 credit score down to 670. And a short sale or deed-in-lieu of foreclosure will hurt your score just as bad as a foreclosure if the service reports it as having a deficiency amount or an unpaid balance. Yikes! Here’s some sexy tables with more details: [More]
Feel the hair on your neck rising? Your bank is watching, with greater scrutiny then ever before. Banks are figuring out new scores and models to figure out your credit worthiness, using everything from how you deposit and withdraw money to how you pay your rent. [More]
Ed and his wife successfully filed a chargeback against Expedia for a canceled trip earlier this year. Now he’s being dunned by a collection agency for the amount that Amex refunded him. [More]
Before the recession hit, roughly 15% of Americans had FICO credit scores below 600. But after the past couple of years of late payments, defaults, and foreclosures, that number has grown to 25%, or about 43 million people. At the same time, the number of people with excellent scores (800 to 850) has increased nearly 5% from pre-recession average, which the Associated Press says is partly a result of people cutting spending and working to pay off loans more quickly. [More]
Now that everyone is so obsessed with their credit reports and FICO scores, credit monitoring services have popped up everywhere. For a modest recurring fee–one that easily adds up to over $100 a year–you can have a company constantly watch your credit report and alert you of any changes in it, so you can always be on top of your creditworthiness. But should you bother? The consumer director of the U.S. Public Interest Research Groups federation (U.S. PIRG) tells BusinessWeek that credit monitoring is a “protection racket” that turns people into “financial hypochondriacs… who are scared of their own financial shadows.” [More]
A perfect credit score of 850 is technically possible, according to FICO spokesperson, Craig Watts but may not be possible for anyone. [More]
New answers pried from the secretive FICO corporation that overlords our credit scores kill a longstanding myth. It turns out that cancelling your credit cards won’t destroy your credit score. [More]
Reader James writes in with a story we hear a lot lately. During the run up to the credit meltdown –Bank of America kept raising James’ limit. He ran up a balance while caring for someone who eventually died — and now that he has paid off his debt, his limit has been cut. In the long run, however, he feels that he’s better off without credit cards. [More]
Donny just bought a bunch of credit scores. But they’re all from different companies and none of them are the same. What gives? [More]
We don’t like services that charge for access to your credit reports, but we are in favor of making it easier to learn about the risks of runaway debt. So, we think you should go ahead and take a look at this chart from . Just stay away from those “Free Credit Report” links and head over to AnnualCreditReport.com instead.
Under new rules issued by the Federal Trade Commission and the Federal Reserve Board, lenders will be required to tell consumers why they’re sticking them with high rates or other lousy terms. How will creditors perform this incredible feat? By lying, of course. No, just kidding. They’re going to give you a free credit report and a note explaining their decision. [More]
When Wally first got his Capital One credit card, the interest rate was 12 percent. Then they raised it to 22.9 percent. Now they’re going to raise it again—the day after Christmas—to 25.9 percent.
An update to how the new FICO ’08 scoring system got revamped this year:
Paul Smith, who lives in San Diego and has a credit score of 751, had his HSBC credit card limit lowered from $7,000 to $1,400 recently for mysterious reasons. He called HSBC to find out why.
Lenders can use the data from your credit report to deny you credit for any one of several reasons. If you are denied, you receive a letter identifying the credit reporting agency that provided the report, along with a risk factor reason code. Bargaineering published a list of the common risk factor codes that lenders use to deem you unworthy of credit. For all three reporting agencies, the cardinal sins are owing too much and failing to pay your bills. The list of codes, inside.
If you’ve fallen into a debt pit and can’t make your credit card payments, and now you’re watching them steadily mount with penalties, fees, and steep interest rates, consider negotiating a lower payment. The New York Times reports that while most card companies won’t admit it officially, they know when they’ve got a customer who can’t pay, and they’re much more willing to settle for a lower amount than they were a year ago.
Citibank Comes Up With Elaborate Cash Back Offer That Reduces Credit Limit And Temporarily Suspends Card
Compared to what some other banks and card companies are doing to reduce their exposure to debt, we guess Citibank’s cash back offer isn’t that bad—it’s sort of a “let us help you help yourself get rid of your debt” scheme. It’s funny, however, if only because it’s such an elaborate way to get customers to self-select for a reduction in credit.