Comments on: On Leasing, Buying, and Credit

By: NNN

NNN — Mon, 22 Oct 2007 01:24:12 +0000

My son and I will be leasing two cars next week.
My credit scores were 688, 689, 670. Not horrible, but not great! I recently refinanced my home and fixed a bunch of amazing errors. Although, I just paid off an equity loan, it shows up as revolving credit. I am worried because, a. it should have come off since I only owe 3,000 in credit cards and the equity line was 50K.

I called the credit agency and they issued a dispute even though they said it should come off in the next 30 days anyway.

Should I take the credit report with me to the dealership if there is a problem?

My fiance will cosign if its a problem because he has superior credit – but I just want to know what I can expect.

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By: Liz

Liz — Tue, 22 Nov 2005 03:00:25 +0000

I agree with Emily, your income is nowhere to be found on your credit report. The 35% number is different depending on what CRA you’re looking at, I think. I see that number fluctuate all the time. 35% is a good goal, though, if you need to keep one. I think average debt compared to the collective group of “others” is also a factor, although I only ever get that comment from one CRA in the “why you don’t have the best score ever” reasons.

Generally new credit hurts your score since you obviously must have a need for this money so you MUST be financially strapped, right?

Also, another thing I thought about is that there are a bunch of different score versions with different formulas. The dealership could be using an old formula and not the latest, greatest 2005 formula you probably got when you pulled your credit.

OH. One last thing I almost forgot! TransUnion just changed their score range this year so it’s about 80 or 100 pts higher than the others. That results in BIG skewing of numbers.

Ah. Here we go. I looked this up for a forum post on my website not too long ago.

TransUnion: 400-925 (last year, it was 300-850)
Equifax: 300-850
Experian: 330-830

If only we were the smart ones coming up with the formulas for this stuff, huh?

By: frank

frank — Thu, 17 Nov 2005 22:08:32 +0000

Emily Thanks for your comment! Duly noted, I’d assumed that since that was the only discrepancy between reports that was the reason for the lower score. But since the dealership asked for my income when I was applying, I couldn’t help but think that had something to do with it.

By: Emily Davidson

Emily Davidson — Thu, 17 Nov 2005 21:49:05 +0000

Great post Frank! Sorry to hear you had some trouble with your credit scores during the car buying process. You should be able to have that account removed from your credit report pretty easily by following the Equifax dispute process. However, I don’t think that your father’s accounts high balance was necessarily the problem.

Your income isn’t included on your credit report or the credit score calculation. Having a high balance on a credit card doesn’t matter as long as you also have a high credit limit. The score damage occurs when your credit card balance exceeds 35% of the credit limit. Having an account with a high credit limit (above $9,000) and a low balance is actually really good for your credit score.

Sorry! This is really geeky stuff. I am a credit expert for http://www.creditbloggers.com. Keep up the good work!