Okay, When I moved in to my apartment I had a fico of 785. I since have PAID OFF all of my student loans, and all other debts execept my car payment which has never been even a minute late. I did miss two phone bill payments by two weeks each, but that is only think I can think of. Could this have dropped my score from pretty much okay down to 725? Anybody?
2007-12-23 14:27:36 · 8 answers · asked by Liz 7 in Business & Finance ➔ Credit
Actually, believe it or not, paying off your student loans brought your credit score down. Everytime you close an account, you ding 15% of your credit score and reduce your available credit, which dings an additional 35%, and those loans are on the fast track off your TRW which affects an additional 30%. Obviously, it does not drop your score 80%, but it does affect three areas of what makes up your credit score.
Also, the phone bill has absolutely NO EFFECT on your TRW. It only affects your TRW if you go to collections. Otherwise, TRW's only display loans.
If you want to bring your score back up, ask for your credit cards to raise your limits. The more available credit, the better the score.
Lastly, 725 credit score is considered excellent. You should be able to get any kind of credit that you want with that.
Hope this helps.
2007-12-23 18:38:44 · answer #1 · answered by E.T. Barton 5 · 0⤊ 0⤋
First to what it is not. It is not the phone payments. Those are not lines of credit and not on your credit report unless they went to collections. Which after 2 weeks they would not have.
It could actually be the fact that you did pay off your student loans. One of the things with the FICO score is that they penalize you for not having debt. Since you paid off the student loan you have no current payment history on the loans so your score will drop some. The other issue you did not say was your utilization on your credit cards. You need to use them every month, but for the best scores you need to not go over 30% of your available credit line. The farther above that you go the more of a negative effect you have.
However, on the bright side you still have a 725 which will get you very close to(if not) the most favorable rates for most loans.
BTW: The above poster is incorrect. The only site you can get your FREE credit report from is http://www.annualcreditreport.com This is the official site that is run by the big 3 credit reporting agencies.
2007-12-23 14:58:00 · answer #2 · answered by OC1999 7 · 0⤊ 0⤋
Yes, paying off debt lowers your credit score.
As far as my finances were concerned, I use to live for having a high FICO score. However, I started listening to the Dave Ramsey show, which basically describes FICO as a get into debt so that you can get into more debt score. After hearing it like that (instead of the Suze Orman "don't marry someone with a low FICO score" philosophy), all I care about is not having any debt at all and saving for the items I need.
Yes, FICO now affects job prospects, auto insurance, and even apartment rentals, but if these companies are too lazy to actually RESEARCH my past instead of just looking up a three-digit number (which a first grader could do), they don't deserve my business.
2007-12-23 23:39:52 · answer #3 · answered by coolman293472 2 · 0⤊ 0⤋
What could have affected your score was the payoff of the student loans and other debt. It sounds odd, but in essence you closed those accounts by paying them off and that can lower a score (because they are no longer active accounts in good standing). If you closed the accounts on the other debts (if they were credit cards) then you don't have the same number of active credit trade lines with a history. The phones bills should really have no effect since they did not go to collections (you weren't even 30 days late).
The good news is that you have paid off your debt and you still have a good score (720 and above for a middle score is great).
2007-12-23 15:00:02 · answer #4 · answered by Anonymous · 0⤊ 0⤋
725 is awesome!. 785 is way more than "pretty much ok." If it did drop you must have been late on a cell phone bill, I doubt it was a land line, they would have just added the one month on to the next month's bill or sent you a shut-off notice. The lesson I hope you learned is that just one late payment can cause your scores to drop!
2007-12-23 15:59:37 · answer #5 · answered by Anonymous · 0⤊ 0⤋
Follow the link below and get a free copy of your credit report. You are allowed 1 free report per year from each of the 3 largest Credit Reporting Agencies. You can download the reports and take a look at what's showing on your report. There could be some bad information showing. If so, you can dispute it. I usually space out my free reports throughout the year - you know, I'll get 1 in January, 1 in April, and 1 in September. But, your FICO score isn't bad - don't sweat it!
2007-12-23 14:46:11 · answer #6 · answered by Dominicks Granny 4 · 0⤊ 0⤋
Your score varies from day to day.
With a 700 plus score you almost walk on water! I take it that the 725 is the medium score or is it the lowest score? Anyway it is nothing to worry about you can qualify for a loan from the credit score viewpoint. There may be limits as to how much you can borrow but that is not due to your credit score.
2007-12-23 14:38:16 · answer #7 · answered by Othniel 6 · 0⤊ 0⤋
Scores will vary - as long as all your payments are on time and you are over 700, I wouldn't worry. FICO has everyone obsessing about their stupid scoring system.
2007-12-24 00:33:23 · answer #8 · answered by Anonymous · 0⤊ 0⤋