If you want to beat debt and build wealth, you have to break the cycle. #DaveDaily http://daveramsey.com/blog
If you want to beat debt and build wealth, you have to break the cycle. #DaveDaily http://daveramsey.com/blog
I just got this email below from collegue and mentor of mine about what is going on with “fake credit scores”. I don’t want to say much let Stephen, explain it detail.
Equifax couldn’t hold out. The greed of the almighty dollar finally found its way to Atlanta.
Temptation got the best of them.
Equifax has recently joined Experian and TransUnion in the business of marketing their own proprietary credit scores (translation: FAKE scores) to unknowing consumers who think they’re buying real FICO credit scores.
Here’s the good news… it’s very clear they are not selling a FICO score (if you search for the web page that explains it). To get that information out of the other two, you basically need to beat it out of them.
Here’s what they say…
Both the Equifax Credit Score and the FICO Score are general-purpose score models used to predict credit risk. The Equifax Credit Score is a proprietary model created by Equifax. The FICO Score is a model created by Fair Isaac Corporation (FICO) for Equifax’s use. All Equifax consumer services and tools make use of the Equifax Credit Scores unless otherwise indicated. The Equifax Credit Score uses a numerical range of 280 to 850, where higher scores indicate lower credit risk. The FICO Score uses a numerical range of 300 to 850, where higher scores also indicate lower credit risk. The Equifax Credit Score can be used to calculate a score for not only your Equifax credit file, but also your Experian and TransUnion credit files. This gives you the ability to compare your credit scores across all three credit reporting agencies, which is a very important part of understanding your credit. Though both score models predict similar types of risk, it is important to remember that because they were created independently by separate companies, they should not be expected to deliver identical scores. In some cases, an Equifax Credit Score and a FICO Score calculated at the same point in time may be similar. However, in some scenarios the scores may differ, perhaps significantly, based on how the different models calculate risk.
Here’s what they left out…very few (if any) of your lenders care about or use the Equifax Credit Score. That’s selective omission if you ask me.
What this means to you and me is…more confusion.
What it means to Equifax is…more money.
I’m all for making money…but not at the expense of doing the right thing.
I don’t know how they sleep at night.
Less than 5% of the population even knows what a real credit score is.
We performed an on-the-street survey in downtown Indianapolis a few years back asking people if they knew what their credit scores were. 2.3% of the people interviewed knew…the others were clueless.
All three credit reporting agencies now take advantage of this consumer ignorance. Without it…they wouldn’t have a sustainable business model.
That’s right, the credit reporting agencies profit on our stupidity…Experian much more than anyone else. You see, they bank on the fact that when someone uses the term “credit score” we’ll think it actually means a credit score that a lender uses…silly us.
The FTC last year came out with an impressive counter-punch to one of Experian’s fake credit score websites. They created and aired two accurate videos. You can watch them here…
Although they are somewhat funny and true…the Federal Trade Commission doesn’t have the marketing budget to promote the truth like Experian can promote fake scores and other useless services.
So what can we learn from this?
If you like a free credit consultation please call me direct at (909) 512-6418
Having said that, an article was published on the MSN website that purports to disclose the amount of points that you will lose if you make certain credit report mistakes. The information from that article was picked up and misrepresented by a different writer and posted on Yahoo!’s homepage for several hours. It was titled “FICO Reveals How Common Credit Mistakes Affect Scores”, which is not what FICO did. By 8:15 am the next day, I already had six calls or emails from reporters asking me about the data and the “points lost” information.
Once again, I’m left to clean up the mess caused by someone else. So, in an attempt to clarify the “points lost” chart floating around on the Internet, I called and spoke with Craig Watts from FICO. Craig is their Director of Public Affairs.
The hypothetical examples used for their score impact charts are just that: hypothetical. According to Watts, the different score scenarios “aren’t meant to reflect every consumer experience” and that your own personal experience “could vary significantly.” Basically, this turns “FICO Reveals How Common Credit Mistakes Affect Scores” into false advertising.
Watts and I both agree that the ONLY way to determine the impact of changes on your FICO scores is to use their FICO Score Simulator tool that’s within the myFICO website. The downside is that you’d have to buy a credit report from them. The upside is that the score simulations will actually use your credit data and not data belonging to hypothetical consumers.
For the first time ever, I will disclose the amount of points I would lose based on a variety of score-damaging actions. I used my own personal FICO score report from myFICO and it just so happens that my score is 780. These score changes are based on my own credit files and thus are not speculative or hypothetical.
| Credit Event
FICO Score Damage to a Starting Score of 780
|Apply for a store credit card||~ 10 points|
|Take on a new $30,000 car loan||~ 15 points|
|Take on a new mortgage loan of $350,000||~ 15 points|
|Miss a payment on one account that wasn’t already late||40-75 points|
|Miss the payments on ALL of my accounts this month||60-110 points|
|Max out ALL of my credit cards. Utilization percentage is now 100%||50-100 points|
|File for bankruptcy||195-255 points|
John Ulzheimer – Credit scoring and credit reporting expert and author, John is the President of Consumer Education for Credit.com. Formerly with Equifax and Fair Isaac, John shares his unique insight of the inner workings of credit scoring models and the credit reporting industry on CreditBloggers.com.
Wells Fargo sticking it to consumers their last chance! It makes you sick!!
Oct. 7 (Bloomberg) — Wells Fargo & Co. plans to raise interest rates on a majority of credit-card customers by 3 percentage points before new rules limiting such increases take effect, according to a company executive.
“This is something we’ve been contemplating for quite a period of time,” Kevin Rhein, group head of card services for the San Francisco-based bank, said today in a telephone interview.
Read more at: http://www.huffingtonpost.com/2009/10/07/wells-fargo-creditcard-ra_n_313155.html
In early 2009, Credit.com contracted me to blog for them after they read a post I wrote on Boing Boing about my unpleasant experience with freecreditreport.com.
Today, Credit.com launched a new and truly free online tool called Credit Report Card, which gives you an easy-to-understand snapshot of your credit report, along with estimated scores from the different reporting agencies. It clearly shows you how your credit score was calculated, along with suggested steps for taking action in each of the five main areas that make up your credit ratings. It does a great job of clearing up the mystery of credit scores and has made me more conscious of how my financial behavior and decisions affect my credit score.
Side note: This kind of transparency is terrific — I hate it when giant institutions have information about me that I don’t have ready access to. That’s why I ran a how-to article on making a magnetic card stripe reader in Make magazine, which I edit. People should be allowed to see what kind of information is being stored on their own credit cards!
Above is a screenshot of what Credit.com’s Credit Report Card looks like. It’s my own credit report card. (I’m only showing the top part of the report card, as I don’t want to share my personal data) As you can see, I have excellent credit :), but I’ve made too many “Inquiries” in the past year, which has knocked my overall rating down a bit.
Interestingly, the day after I generated my Credit Report Card, I went to Macy’s to buy a gift for my wife. The sales clerk wanted me to apply for a Macy’s credit card, promising all sorts of discounts on this and future purchases. If I hadn’t used Credit Report Card, I might have taken her up on the offer, which might have damaged my credit rating. So this tool has come in handy already.
The FAQ for Credit Report Card (linked from the front page) will answer the most obvious questions (executive summary = it’s free; using it won’t affect your credit score; you can request a new report card every 30 days; there are no strings attached; and the data you provide to generate your report will not be used for any other purpose).
Give Credit Report Card a try, and let me know what you think of it!
to what the credit bureaus would like you to believe, credit repair does work
and can work for 100% of people in most circumstances. This is, of course,
provided you are getting the best advice and have an experienced professional
working on your case.
with a credit score below 720 can benefit long-term from the advice and
information provided through credit repair; however, there are times when your
own limitations make adhering to this advice impossible. The two limiting
factors are: 1) your financial situation and 2) the time frame within
which you need results. It is possible to remove anything from a credit
report, even accurate items, if the creditor does not adhere to the law that
outlines the steps of what needs to be done and by when. But just because
you have a certain type of account removed at one time does not mean other,
similar items are going to be able to be removed, even with the same circumstances. A
hit-or-miss aspect exists in credit repair, because credit repair relies not
only on the strategies of the person attempting to repair the credit, but also
on the effectiveness or ineffectiveness of the creditors and credit bureaus in adhering
to the laws. Sometimes you want the credit bureaus and creditors to follow
the law, sometimes you don
I learned early on that credit card companies love people
who max out their credit cards. They love them because of the income stream
they get as a result. However, if you max out your credit, the companies may
also view this as a sign of desperation and assume that you are a risk. It is a
catch-22: If you are barely using your credit, the credit card companies do not
have much reason to increase your limit; on the other hand, using your credit
too much will make them feel you are a risk.
Consequently, to make the credit card companies happy, you
have to do two things. First, make them feel you are not a risk. Second, let
them know that by increasing your credit, they can make more money from you
without increasing their risk.
How do you do this? Easy