Credit Score Scale
300 - 620
Below Avg
621 - 700
Average
701 - 760
Good
761 - 850
Excellent
If your credit score suddenly rises after July 1, here's why
Starting July 1, the credit scores of up to 14 million people could begin to rise as credit reports are scrubbed of nearly all civil judgments and many tax liens.
Consumer advocates hail the data's deletion as a long-overdue victory for people whose scores were unfairly dinged by inaccurate information. others worry the changes could inflate the scores of risky borrowers and have a catastrophic impact on lenders.
People shouldn't expect an immediate jump in their scores, however.
On July 1, the three major credit bureaus - Experian, Equifax and TransUnion - will exclude new records of civil and tax liens that don't have minimum identifying information including Social Security numbers or birth dates as well as any record of judgments or liens that hasn't been updated within 90 days. The bureaus also will begin to remove old records of judgments and liens that don't meet the enhanced standards, a process that's expected to take several weeks, says Francis Creighton, president and CEO of the Consumer Data Industry Association, a trade group that represents the bureaus. Credit scoring company FICO estimates that 6 to 7 percent of people who have FICO scores will have a tax lien or civil judgment purged from their records. Tax liens stem from unpaid state or federal tax bills, while civil judgments are court filings from lawsuits filed over old debts, unpaid child support, evictions and other noncriminal matters. Judgments and liens show up in the public records section of credit reports and can seriously damage credit scores.
Does a judgment or lien make you riskier?
The credit bureaus aren't being forced to delete this information. They're doing it voluntarily, in large pat because these public records weren't properly verified or updated, generating many consumer complaints and disputes.
The credit bureaus might have found a way to keep the records if the data was overwhelmingly valuable to lenders, their primary customers. But that doesn't seem to be the case.
The credit bureaus, creditor scorers FICO and VantageScore Solutions and mortgage buyer Fannie Mae have all said that removing the data will have at most a minor impact on lenders' ability to predict risk.
Almost all - 92 percent - of people who have liens or judgments in their credit reports have other negative information in their files, says Ethan Dornhelm, FICO's vice president for scores and analytics. That's why independent studies by FICO and VantageScore Solutions found that scores went up an average of just 10 points when liens and judgments were removed.
A much smaller group of people - about 1 million of the 200 million people with FICO scores - whose credit reports are otherwise clean could see their scores rise more.
Not all players think the change is benign. A representative of LexisNexis Risk Solutions says the outcome could be "catastrophic." The company is marketing reports with the deleted public records data to lenders.
The data and analytics provider found that people with judgments and tax liens on their credit reports are more than fie times as likely to default on a mortgage as people without those records, says Tim Coyle, senior director for real estate and mortgage at LexisNexis Risk Solutions.
Why did FICO and VantageScore Solutions reach a different conclusion? LexisNexis compared people with negative public records to those without. The credit scoring companies used databases stripped of the questionable records, then calculated scores based on the information that remained.
Will lenders move the goal posts?
It's an open question how many of the affected folks will look more creditworthy than they actually are and how many are actually good credit risks who were victimized by erroneous data.
Lenders will find out by monitoring default rates, and they will adjust their lending critieria accordingly, says Jeff Richardson, a VantageScore Solutions spokesman. That could mean raising cutoff limits for acceptable scores - which means in turn that those who see their scores improve only modestly could find the loans they want still out of reach.
Lenders' ability to course-correct varies. Credit card lenders, for example, can quickly ratchet down credit limits, raise interest rates on new balances or accept fewer applicants. Mortgage lenders, by contrast, make much larger loans that can take months or years to start going bad in significant numbers.
So it's understandable that mortgage lenders may be a little twitchy about the change - and why Fannie Mae sent a letter urging them not to be. The mortgage buyer promised "lenders can continue to have full confidence" in its approval decisions - but it also said it will continue to monitor the situation.
That is what consumers should do, as well. Knowing what your scores are, and taking actions to keep the as high as possible, is an important part of managing your finances skillfully in the 21st century.
Some black marks fall off credit reports this month
Starting this month, the credit scores of up to 14 million people could begin to rise credit reports are scrubbed of nearly all civil judgments and many tax liens. Consumer advocates hail the data's deletion as a long-over-due victory for people whose scores were unfairly dinged by inaccurate information. Others worry that the changes could inflate the scores of risky borrowers and have a catastrophic impact on lenders. People shouldn't expect an immediate jump in their scores, however. On July 1, the three major credit bureaus -Experian, Equifax, TransUnion - will exclude new records of civil judgments and tax liens that don't have minimum identifying information including Social Security numbers or dates of birth as well as any record of judgments or liens that hasn't been updated within 90 days. the bureaus will also begin to remove old records of judgments and liens that don't meet the enhanced standards, a process that expected to take several weeks, says Francis Creighton, president and CEO of the Consumer Data Industry Association, a trade group that represents the bureaus. Credit scoring company fico estimates that 6 percent to 7 percent of people who have FICO scores will have a tax lien or civil judgment purged from their records. Tax liens stem from unpaid state of federal tax bills, while civil judgments are court rulings from lawsuits filed over old debts, unpaid child support, evictions and other noncriminal matters. Judgments and liens show up in the public records section of credit reports and can seriously damage credit scores. Does a judgment or lien make you riskier? The credit bureaus aren't being forced to delete this information. They're doing it voluntarily, in large part because these public records weren't properly verified or updated, generating many consumer complaints and disputes. The credit bureaus might have found a way to keep the records if the data was overwhelmingly valuable to lenders, their primary customers. But that doesn't seem to be the case. The credit bureaus, creditors scorers, FICO and VantageScore Solutions and mortgage buyer Fannie Mae have all said that removing the data will have at most minor impact on lenders' ability to predict risk.
Some are worried
Almost all - 92 percent - of people who have liens or judgments in their credit reports have other negative information in their files, says Ethan Dornhelm, FICO's vice president for scores and analytics. That's why independent studies by FICO and VantageScore Solutions found that scores went up just an average of 10 points when liens and judgments were removed. The credit scoring companies used databases stripped of questionable records, then calculated scores based on the information that remained.
Lenders skittish
Will lenders move the goal posts? There's an open question about how many of the affected folks will look more creditworthy than they actually are and how many are actually good credit risks who were victimized by erroneous data. lenders will find out by monitoring default rates and adjust their lending criteria accordingly, says Jeff Richardson, a VantageScore Solutions spokesman. That could mean raising cutoff limits for acceptable scores - which means in turn that those who see their scores improve only modestly could find the loans they want still out of reach. Lenders' ability to course-correct varies. Credit care lenders, for example, can quickly ratchet down credit limits, raise interest rates on new balances or accept fewer applicants. Mortgage lenders, by contrast, make much larger loans that can take months or years to start going bad in significant numbers. So it's understandable that mortgage lenders may be a little twitchy about the change - and why Fannie Mae sent a letter urging them not to be. The mortgage buyer promised that "lenders can continue to have full confidence" in its approval decisions - but it also said it will continue monitoring the situation. That is what consumers should do as well. Knowing what your scores are, and taking actions to keep them as high as possible, is an important part of managing your finances skillfully in the 21st century.
PERSONAL FINANCE
LIZ WESTON
lweston@nerdwallet.com
Relief is here for bad credit scores
Consumers who are dogged by poor credit scores - and have trouble getting credit cards or loans as a result - will soon get some relief. On Saturday, the three credit reporting companies stopped using some records that are especially damaging to credit scores: tax liens and civil judgments. So if someone has gone after you in court for failing to pay what you owe, or a government has placed a lien on your assets, those records will likely disappear from your credit report. An estimated 12 million people could be affected by the changes. Of course, most Americans don't have such a troubling past dragging down their credit history. But the new rules could also offer some benefit to people with unblemished pasts. According to the Federal Trade Commission, about 21 percent of consumers have damaging mistakes in their credit reports. So you could be meticulous about paying back every cent you owe on time and still have false information placed on your credit history by the computers that generate the information. The new rules should cut down on those mistakes, at least when it comes to liens and civil judgments. The three reporting companies -Trans-Union, Equifax and Experian - will no longer use those records when evaluating your credit unless they can match your name, address, and either your Social Security or birth date to the records. Fair Isaac Corp., which blends credit histories into a FICO score for each individual, estimated in a recent report that about half of tax lien public record data will not be usable under the new rules. On the other hand, FICO said the new rules probable will not make a major difference in credit scores anyway. typically, 92 percent of people with liens and judgments have other derogatory information in records that raise red flags,, according to FICO. bankruptcy records will continue to be used. Consumer advocates have long complained that many Americans are unfairly tarnished by credit reports that are wrong. The July changes are an outgrowth of a settlement involving 31 states attorneys general challenging errors in credit reports. Errors are frequent because computers often match the wrong information to the wrong name; especially when two people have the same or similar names. The problems go beyond the public records covered by the new rules, and create headaches for people trying to correct their records. Bruce McClary, a spokesman for the National Foundation for Credit Counseling, said that a credit counselor he observed two women struggle for almost a year to get one item on a credit report changed One digit in a Social Security number had been used incorrectly, so that an account that belonged to one woman was recorded instead as an account held by the other woman. Payments on the account were up to date, and even though the two women worked together to get the mistake fixed and credit histories corrected, the process was grueling, he said. The two women were strangers at first and fund each other in the process of cleaning up the error. "There's no guarantee of a rosy ending," McClary said. If one of the women had been behind on bills and had not wanted to cooperate, the outcome could have been very different. The credit reporting systems is supposed to be an early warning system for banks and other entities who are considering doing business with an individual and want to know if that person can be counted on to pay their debts. Sometimes potential employers request credit reports, although some states have stopped that practice. Landlords often request credit reports before renting to a tenant. Banks rely on credit reports while also doing additional research before granting a mortgage or other loan. But while credit reports are designed to use a person's past to predict the future, critics have said the system is flawed. For example, people often wait to pay medical bills while trying to resolve questions over payments and insurance coverage, which in the past has dinged an individual's credit report. Under a new change that's to be adopted soon by the three credit reporting agencies, unpaid medical bills won't be reported until they are 180 days past due. because mistakes are so frequent, and the ramifications so serious for people who need or want to borrow money, McClary suggests that people review their credit report at least once a year and demand changes if errors appear. He also suggests that people ask for a free credit report every three months from one of the three credit reporting bureaus so that by year-end all three have been reviewed. This should be done through annualcreditreport.com, he said, which should not be mistaken for the multitude of sites that charge for credit scores or reports.
High FICO score is great, but don't get smug
Michelle Singletary
The Washington Post
COLOR OF MONEY
Washington- Often when it comes to people's personal finances, it's all hushed tones and secrets. You're too embarrassed to admit how little you've saved for retirement. Debt is kept in the dark - sometimes even from your own spouse. But if you've got a good credit score, it's all bravado. And if some new figures are any indication, a lot of people are likely bragging about their credit score. The average national credit score hit a milestone recently, according to FICO, the company that created the scoring model used by most lenders. FICO scores range from 300 to 850. The higher your score, the better. A stellar number can place you in a tier for receiving the best lending deals. FICO looked at consumer credit data from April and found that the average score hit 700 - a jump of 10 points from just before the Great Recession. That spread might not seem like a lot, but it could make a huge financial difference during the length of your loan. Let's say you want to buy a home or car. A lender reserves its lowest interest rates for consumers with certain lending criteria that include a credit score range of 720 or higher. Fall below this threshold and you pay more for the money you borrow. In a blog post about the data, FICO says it's been seeing a lot of movement in the lower and higher ranges of its scoring model. The percentage of consumers in the bottom ranges, people who typically have late payments or other negative credit information, has been dropping. And the share of people with "super-prime "scores of 800 or more has been increasing. FICO also announced another milestone: Borrowers with credit scores of 800 or more outnumbered those with scores of 600 or below. What's with the uptick? Better economic times and greater awareness of a credit score's importance, the folks at FICO say. Plus, more lenders are giving people free access to their credit scores. I keep track of my score through a service provided by my mortgage lender. Here's my latest score data:
FICO score: 841. (If you don't have a perfect score, don't sweat it. After a certain point, it doesn't matter. If a lender is giving the best deals to customers wit credit scores above 720, having a higher number - even the highly sought after 850 - won't give you any more advantage other than bragging rights.)
Credit Rating: Excellent.
Credit Bureau: Experian.
Score Version: FICO
Score 9. (It's important to know that your score can vary because lenders may be using different and/or older versions of certain scoring models. You may get a score from FICO or VantageScore, which is a venture developed jointly by the three major credit bureaus - Equifax, Experian, and TransUnion.)
Score Frequency: Quarterly.
The rating came with this note from my lender: "The credit file used to calculate your FICO score is continuously updated, and as such your FICO score may not reflect the most current data on your credit file." If your credit-card provider or lender doesn't give you access to a free score, ask why. Press them. Knowing where you stand can help you manage your credit better. It's also a defense against unscrupulous lenders who may try to charge you more with the hope that you don't know how good your credit actually is. With a score of 841, I might be tempted to boast. You, too, might be proud if you've crossed the 700 or 800 mark. But don't get smug about your number. Keep in mind that your score represents your history of managing debt. I was reminded not to get arrogant about my score while watching an episode of ABC's sitcom Black-ish. In it, Andre "Dre" Johnson and his wife Rainbow realize their spending is out of control. "We owe what?" Rainbow says after opening a bill. "How did we spend this much on our credit cards?" "Don't worry about that," Dre says. "I have an 819 FICO score." Here's what radio host Dave Ramsey says about such bragging: "Like it or not, your credit score is not an indicator of winning financially. All it tells you is whether you are good at borrowing money and paying it back. That's it. I've counseled a lot of broke folks with FICO scores of 700 or higher. When it comes to your finances, it's not the only number that counts.
Below Avg
621 - 700
Average
701 - 760
Good
761 - 850
Excellent
If your credit score suddenly rises after July 1, here's why
Starting July 1, the credit scores of up to 14 million people could begin to rise as credit reports are scrubbed of nearly all civil judgments and many tax liens.
Consumer advocates hail the data's deletion as a long-overdue victory for people whose scores were unfairly dinged by inaccurate information. others worry the changes could inflate the scores of risky borrowers and have a catastrophic impact on lenders.
People shouldn't expect an immediate jump in their scores, however.
On July 1, the three major credit bureaus - Experian, Equifax and TransUnion - will exclude new records of civil and tax liens that don't have minimum identifying information including Social Security numbers or birth dates as well as any record of judgments or liens that hasn't been updated within 90 days. The bureaus also will begin to remove old records of judgments and liens that don't meet the enhanced standards, a process that's expected to take several weeks, says Francis Creighton, president and CEO of the Consumer Data Industry Association, a trade group that represents the bureaus. Credit scoring company FICO estimates that 6 to 7 percent of people who have FICO scores will have a tax lien or civil judgment purged from their records. Tax liens stem from unpaid state or federal tax bills, while civil judgments are court filings from lawsuits filed over old debts, unpaid child support, evictions and other noncriminal matters. Judgments and liens show up in the public records section of credit reports and can seriously damage credit scores.
Does a judgment or lien make you riskier?
The credit bureaus aren't being forced to delete this information. They're doing it voluntarily, in large pat because these public records weren't properly verified or updated, generating many consumer complaints and disputes.
The credit bureaus might have found a way to keep the records if the data was overwhelmingly valuable to lenders, their primary customers. But that doesn't seem to be the case.
The credit bureaus, creditor scorers FICO and VantageScore Solutions and mortgage buyer Fannie Mae have all said that removing the data will have at most a minor impact on lenders' ability to predict risk.
Almost all - 92 percent - of people who have liens or judgments in their credit reports have other negative information in their files, says Ethan Dornhelm, FICO's vice president for scores and analytics. That's why independent studies by FICO and VantageScore Solutions found that scores went up an average of just 10 points when liens and judgments were removed.
A much smaller group of people - about 1 million of the 200 million people with FICO scores - whose credit reports are otherwise clean could see their scores rise more.
Not all players think the change is benign. A representative of LexisNexis Risk Solutions says the outcome could be "catastrophic." The company is marketing reports with the deleted public records data to lenders.
The data and analytics provider found that people with judgments and tax liens on their credit reports are more than fie times as likely to default on a mortgage as people without those records, says Tim Coyle, senior director for real estate and mortgage at LexisNexis Risk Solutions.
Why did FICO and VantageScore Solutions reach a different conclusion? LexisNexis compared people with negative public records to those without. The credit scoring companies used databases stripped of the questionable records, then calculated scores based on the information that remained.
Will lenders move the goal posts?
It's an open question how many of the affected folks will look more creditworthy than they actually are and how many are actually good credit risks who were victimized by erroneous data.
Lenders will find out by monitoring default rates, and they will adjust their lending critieria accordingly, says Jeff Richardson, a VantageScore Solutions spokesman. That could mean raising cutoff limits for acceptable scores - which means in turn that those who see their scores improve only modestly could find the loans they want still out of reach.
Lenders' ability to course-correct varies. Credit card lenders, for example, can quickly ratchet down credit limits, raise interest rates on new balances or accept fewer applicants. Mortgage lenders, by contrast, make much larger loans that can take months or years to start going bad in significant numbers.
So it's understandable that mortgage lenders may be a little twitchy about the change - and why Fannie Mae sent a letter urging them not to be. The mortgage buyer promised "lenders can continue to have full confidence" in its approval decisions - but it also said it will continue to monitor the situation.
That is what consumers should do, as well. Knowing what your scores are, and taking actions to keep the as high as possible, is an important part of managing your finances skillfully in the 21st century.
Some black marks fall off credit reports this month
Starting this month, the credit scores of up to 14 million people could begin to rise credit reports are scrubbed of nearly all civil judgments and many tax liens. Consumer advocates hail the data's deletion as a long-over-due victory for people whose scores were unfairly dinged by inaccurate information. Others worry that the changes could inflate the scores of risky borrowers and have a catastrophic impact on lenders. People shouldn't expect an immediate jump in their scores, however. On July 1, the three major credit bureaus -Experian, Equifax, TransUnion - will exclude new records of civil judgments and tax liens that don't have minimum identifying information including Social Security numbers or dates of birth as well as any record of judgments or liens that hasn't been updated within 90 days. the bureaus will also begin to remove old records of judgments and liens that don't meet the enhanced standards, a process that expected to take several weeks, says Francis Creighton, president and CEO of the Consumer Data Industry Association, a trade group that represents the bureaus. Credit scoring company fico estimates that 6 percent to 7 percent of people who have FICO scores will have a tax lien or civil judgment purged from their records. Tax liens stem from unpaid state of federal tax bills, while civil judgments are court rulings from lawsuits filed over old debts, unpaid child support, evictions and other noncriminal matters. Judgments and liens show up in the public records section of credit reports and can seriously damage credit scores. Does a judgment or lien make you riskier? The credit bureaus aren't being forced to delete this information. They're doing it voluntarily, in large part because these public records weren't properly verified or updated, generating many consumer complaints and disputes. The credit bureaus might have found a way to keep the records if the data was overwhelmingly valuable to lenders, their primary customers. But that doesn't seem to be the case. The credit bureaus, creditors scorers, FICO and VantageScore Solutions and mortgage buyer Fannie Mae have all said that removing the data will have at most minor impact on lenders' ability to predict risk.
Some are worried
Almost all - 92 percent - of people who have liens or judgments in their credit reports have other negative information in their files, says Ethan Dornhelm, FICO's vice president for scores and analytics. That's why independent studies by FICO and VantageScore Solutions found that scores went up just an average of 10 points when liens and judgments were removed. The credit scoring companies used databases stripped of questionable records, then calculated scores based on the information that remained.
Lenders skittish
Will lenders move the goal posts? There's an open question about how many of the affected folks will look more creditworthy than they actually are and how many are actually good credit risks who were victimized by erroneous data. lenders will find out by monitoring default rates and adjust their lending criteria accordingly, says Jeff Richardson, a VantageScore Solutions spokesman. That could mean raising cutoff limits for acceptable scores - which means in turn that those who see their scores improve only modestly could find the loans they want still out of reach. Lenders' ability to course-correct varies. Credit care lenders, for example, can quickly ratchet down credit limits, raise interest rates on new balances or accept fewer applicants. Mortgage lenders, by contrast, make much larger loans that can take months or years to start going bad in significant numbers. So it's understandable that mortgage lenders may be a little twitchy about the change - and why Fannie Mae sent a letter urging them not to be. The mortgage buyer promised that "lenders can continue to have full confidence" in its approval decisions - but it also said it will continue monitoring the situation. That is what consumers should do as well. Knowing what your scores are, and taking actions to keep them as high as possible, is an important part of managing your finances skillfully in the 21st century.
PERSONAL FINANCE
LIZ WESTON
lweston@nerdwallet.com
Relief is here for bad credit scores
Consumers who are dogged by poor credit scores - and have trouble getting credit cards or loans as a result - will soon get some relief. On Saturday, the three credit reporting companies stopped using some records that are especially damaging to credit scores: tax liens and civil judgments. So if someone has gone after you in court for failing to pay what you owe, or a government has placed a lien on your assets, those records will likely disappear from your credit report. An estimated 12 million people could be affected by the changes. Of course, most Americans don't have such a troubling past dragging down their credit history. But the new rules could also offer some benefit to people with unblemished pasts. According to the Federal Trade Commission, about 21 percent of consumers have damaging mistakes in their credit reports. So you could be meticulous about paying back every cent you owe on time and still have false information placed on your credit history by the computers that generate the information. The new rules should cut down on those mistakes, at least when it comes to liens and civil judgments. The three reporting companies -Trans-Union, Equifax and Experian - will no longer use those records when evaluating your credit unless they can match your name, address, and either your Social Security or birth date to the records. Fair Isaac Corp., which blends credit histories into a FICO score for each individual, estimated in a recent report that about half of tax lien public record data will not be usable under the new rules. On the other hand, FICO said the new rules probable will not make a major difference in credit scores anyway. typically, 92 percent of people with liens and judgments have other derogatory information in records that raise red flags,, according to FICO. bankruptcy records will continue to be used. Consumer advocates have long complained that many Americans are unfairly tarnished by credit reports that are wrong. The July changes are an outgrowth of a settlement involving 31 states attorneys general challenging errors in credit reports. Errors are frequent because computers often match the wrong information to the wrong name; especially when two people have the same or similar names. The problems go beyond the public records covered by the new rules, and create headaches for people trying to correct their records. Bruce McClary, a spokesman for the National Foundation for Credit Counseling, said that a credit counselor he observed two women struggle for almost a year to get one item on a credit report changed One digit in a Social Security number had been used incorrectly, so that an account that belonged to one woman was recorded instead as an account held by the other woman. Payments on the account were up to date, and even though the two women worked together to get the mistake fixed and credit histories corrected, the process was grueling, he said. The two women were strangers at first and fund each other in the process of cleaning up the error. "There's no guarantee of a rosy ending," McClary said. If one of the women had been behind on bills and had not wanted to cooperate, the outcome could have been very different. The credit reporting systems is supposed to be an early warning system for banks and other entities who are considering doing business with an individual and want to know if that person can be counted on to pay their debts. Sometimes potential employers request credit reports, although some states have stopped that practice. Landlords often request credit reports before renting to a tenant. Banks rely on credit reports while also doing additional research before granting a mortgage or other loan. But while credit reports are designed to use a person's past to predict the future, critics have said the system is flawed. For example, people often wait to pay medical bills while trying to resolve questions over payments and insurance coverage, which in the past has dinged an individual's credit report. Under a new change that's to be adopted soon by the three credit reporting agencies, unpaid medical bills won't be reported until they are 180 days past due. because mistakes are so frequent, and the ramifications so serious for people who need or want to borrow money, McClary suggests that people review their credit report at least once a year and demand changes if errors appear. He also suggests that people ask for a free credit report every three months from one of the three credit reporting bureaus so that by year-end all three have been reviewed. This should be done through annualcreditreport.com, he said, which should not be mistaken for the multitude of sites that charge for credit scores or reports.
High FICO score is great, but don't get smug
Michelle Singletary
The Washington Post
COLOR OF MONEY
Washington- Often when it comes to people's personal finances, it's all hushed tones and secrets. You're too embarrassed to admit how little you've saved for retirement. Debt is kept in the dark - sometimes even from your own spouse. But if you've got a good credit score, it's all bravado. And if some new figures are any indication, a lot of people are likely bragging about their credit score. The average national credit score hit a milestone recently, according to FICO, the company that created the scoring model used by most lenders. FICO scores range from 300 to 850. The higher your score, the better. A stellar number can place you in a tier for receiving the best lending deals. FICO looked at consumer credit data from April and found that the average score hit 700 - a jump of 10 points from just before the Great Recession. That spread might not seem like a lot, but it could make a huge financial difference during the length of your loan. Let's say you want to buy a home or car. A lender reserves its lowest interest rates for consumers with certain lending criteria that include a credit score range of 720 or higher. Fall below this threshold and you pay more for the money you borrow. In a blog post about the data, FICO says it's been seeing a lot of movement in the lower and higher ranges of its scoring model. The percentage of consumers in the bottom ranges, people who typically have late payments or other negative credit information, has been dropping. And the share of people with "super-prime "scores of 800 or more has been increasing. FICO also announced another milestone: Borrowers with credit scores of 800 or more outnumbered those with scores of 600 or below. What's with the uptick? Better economic times and greater awareness of a credit score's importance, the folks at FICO say. Plus, more lenders are giving people free access to their credit scores. I keep track of my score through a service provided by my mortgage lender. Here's my latest score data:
FICO score: 841. (If you don't have a perfect score, don't sweat it. After a certain point, it doesn't matter. If a lender is giving the best deals to customers wit credit scores above 720, having a higher number - even the highly sought after 850 - won't give you any more advantage other than bragging rights.)
Credit Rating: Excellent.
Credit Bureau: Experian.
Score Version: FICO
Score 9. (It's important to know that your score can vary because lenders may be using different and/or older versions of certain scoring models. You may get a score from FICO or VantageScore, which is a venture developed jointly by the three major credit bureaus - Equifax, Experian, and TransUnion.)
Score Frequency: Quarterly.
The rating came with this note from my lender: "The credit file used to calculate your FICO score is continuously updated, and as such your FICO score may not reflect the most current data on your credit file." If your credit-card provider or lender doesn't give you access to a free score, ask why. Press them. Knowing where you stand can help you manage your credit better. It's also a defense against unscrupulous lenders who may try to charge you more with the hope that you don't know how good your credit actually is. With a score of 841, I might be tempted to boast. You, too, might be proud if you've crossed the 700 or 800 mark. But don't get smug about your number. Keep in mind that your score represents your history of managing debt. I was reminded not to get arrogant about my score while watching an episode of ABC's sitcom Black-ish. In it, Andre "Dre" Johnson and his wife Rainbow realize their spending is out of control. "We owe what?" Rainbow says after opening a bill. "How did we spend this much on our credit cards?" "Don't worry about that," Dre says. "I have an 819 FICO score." Here's what radio host Dave Ramsey says about such bragging: "Like it or not, your credit score is not an indicator of winning financially. All it tells you is whether you are good at borrowing money and paying it back. That's it. I've counseled a lot of broke folks with FICO scores of 700 or higher. When it comes to your finances, it's not the only number that counts.
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