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Credit Score update

July 13th, 2013 at 01:50 pm

I was going to go to bed, but I checked my credit score on Credit Karma just now. In my April 20th post about credit scores, I said that DW had a credit score approaching "deity," while mine was close to 100 points lower than hers. Her score was so high, I'd think that folks would PAY her to borrow from them.

When we went to the US, we got a new car for her. This put two new inquiries onto my account; that should've been just one, but I'm not worried about the inquiries. Inquiries are "negative" in effect on credit ratings. We also borrowed a healthy amount, increasing our debt-to-income ratio, which is another "negative."

So, what was the result of adding two negatives to my credit record? The score went up to nearly DW's level after nearly six months of just sitting where it had been.

As I said in the comments to the April post: I just don't understand credit scores or how they work.

3 Responses to “Credit Score update”

  1. PatientSaver Says:

    In my last f/t job, I worked as a personal finance writer, and credit cards and all things related to credit, credit reports, credit scores and credit reporting bureaus was largely what I wrote about. I did that for 2 years, and based on what you told me above, I can't say I can explain your credit score rising after buying the car. Strange.

    I do know that for years I was very conservative about credit cards and only held 2 credit cards, and that a few years ago when i got the credit card rewards/bonus bug and accumulated 7 or 8 different cards, my credit score rose. Of course, that can be attributed to a higher line of credit with relatively low overall use of it.

  2. MonkeyMama Says:

    A good reminder not to take "credit score guidelines" very seriously. I've always had a very high credit score. I always completely ignore most the guidelines. I do have 10 years of solid good history on my credit report. Clearly that counts for the most of it. (I have always ignored the advice to keep old credit open and never gave a thought to how many inquiries I have. "Keeping old credit open" might have mattered when I Was just starting to build a credit history, but I have found it to be a useless endeavor with age. My spouse has some ancient credit card open because he believes this stuff, though our scores our identical; me without any open history beyond 2 or 3 years).

    My experience, having only gotten one car loan in my life (for a dealer discount/incentive) was that it increased our already high FICO scores substantially. I mean, we only had 10-20 point to eek out. But, that was even though we paid it off within a few days. I do know a variety of different kinds of credit is good for your score and that the the benefits of a car loan likely FAR outweigh any inquiries. BUT, is a car loan "100 points FICO increase worthy?" Apparently it is?

  3. Wino Says:

    For the record, it was not 100 points. DW is still above my level. I'm just close enough to touch hers now. The total impact was 66 points. As she wasn't quite 100 points above me before, we're now within a reasonable difference, as opposed to the nearly 100 points before. We're both over 800 now, and have over 30 years of credit history (I got my first loan at 19).

    I fell in to the old "you can only borrow if you don't need it" trap, so I borrowed money and paid it back even if I didn't need it to "build a credit history." It was very helpful when I was younger, but now, DW and I are thinking about just paying off the car, even though the money is at 1.19%. I told DW that we can make more than that in Vanguard, but we're both of the "better to just get it out of the way" mindset. I know the QE ball will be dropping soon, so it's just as likely that I'll "lose" some of the earnings soon, anyway.

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