My credit score: A tale of irony & contradictions

Okay, this is the week I will most likely find my new home. Although I think the deals improve after the 15th as landlords get more desperate, my situation is not straightforward and might take a few more days to process. What’s so complicated? That would be my second least-favorite thing about being self-employed: the need for a guarantor. It makes me feel like half an adult.

So this morning, I got my free credit report from TransUnion and bought my score: 864. Sadly, that’s not my FICO score – I have no idea what it is or how to find out out, though my guesstimate from CreditKarma is 778. That 864 translates to the 71st percentile. Really? In this economy? The most interesting thing about my “credit analysis” I got along with my TU score for $7.95 was the four things that had the greatest impact on lowering my score:

The available credit on my open revolving credit accounts is too low
Well, this isn’t due to high balances. I pay my $7800 limit Citibank Mastercard off in full every month, and the Bank of America Visa card that my mother is paying (her debt) has about $2000 owed on a $24,000 limit. So on paper, it looks like I owe $2K on $32K of available credit. How in the world does this hurt me???

I have no real estate accounts
In the current economic climate, non-homeownership should be considered a plus!!!

My oldest revolving credit account was opened too recently
I’ve had a Bank of America Visa since 2000, how the hell is NINE YEARS “too recent”?? And then there’s CitiBank… they talked me into a different card 2 years ago, I didn’t like it and changed back to what I had. I’ve had one card or another with Citibank since 1989. Um…sorry I’m only 38??

I have no recently opened accounts that show a payment status
First they tell me I don’t have accounts that are old enough, and now I don’t have any that are new enough? Is that what this means? And why would it hurt my score to not have recently-acquired debt?

I suppose I shouldn’t be surprised that I’m essentially being punished for having too little debt and pursuing improved terms every few years. Would I be wrong in deducing that this is at the core of our economic problems…you know, giving mortgages to people who are always borrowing lots of money on lots of cards…?

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4 Responses

  1. From what I know, FICO says that the average account length for people with high scores is approx. 19 years. Which in some respects seems a bit age-ist to me. I have a friend who was trying to buy a house at 21 (and being oddly smart about it) and they said that since she didn’t have a credit history that was at least five years, she didn’t qualify for a mortgage. So I guess now when we have children we have to put them as an authorized user on a credit card the day after they receive an SSN so they can have a long enough credit history. 🙂

  2. MMK, I would try Experian’s Vantage Score. Used to be FICO, but credit reporting agencies are now moving towards this Vantage Score. I think it will give you a clearer picture of your score as TransUnion isn’t always used by all cc companies.

    I just got my score, too. And the Vantage Score played out much better than the Credit Karma or TU score.

    Well, wishes on your apartment hunt! I hope that it all works out for you. 🙂

  3. I got hit because I love opening and closing cards for short term benefits *heh*

    Its ok – still rated a 795

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