Ask me about Credit Scores

[mikeymike1]

I have an idea for a business model that will allow people to see their own personal credit scores whenever they want, online with a personal account, and charge businesses for viewing other people's scores using the same method. I see several web-based marketing opportunities with my site. I intend to streamline this antiquated industry, and force the current credit bureaus to become more competitive and modern.

If I wanted to start my own credit reporting agency, to compete in the free market with Equifax and Trans Union, how would I go about starting my business?

You can't.
Both agencies are federal gvmt regulated

[dealwhere]

Sorry but I have to firmly disagree with you here.
When we see 3-4+ inquiries all for the same credit products and all within a short period it automatically draws red flags.
Its not uncommon for desperate people in desperate need to seek credit by shotgunning their application everywhere.

It is better for your credit score to have inquiries in bunches so long as they are reasonable (3-4) - it is generally accepted that the client is shopping for best rates, etc. It could raise red flags if there are other circumstances involved, but for the purpose of credit scores, it is best to have it in a shorter period of time, ie shopping for mortgage rates.

[dealwhere]

I was just going to post that (as I was pulled away by a phone call) tdsr and gdsr have no impact on credit scores

Some financial institutes don't really care about credit scores and grant credit mainly on tdsr

TDS/GDS is used in combination with ones credit score when assessing risk. The poster initially asked if having too many accounts effects his credit score. The answer is not really. So long as he makes his payments on time and has a healthy TDS / GDS - he should be fine. That is why I reiterated that he ensure his TDS/GDS is in line.

[dealwhere]

I have an idea for a business model that will allow people to see their own personal credit scores whenever they want, online with a personal account, and charge businesses for viewing other people's scores using the same method. I see several web-based marketing opportunities with my site. I intend to streamline this antiquated industry, and force the current credit bureaus to become more competitive and modern.

If I wanted to start my own credit reporting agency, to compete in the free market with Equifax and Trans Union, how would I go about starting my business?

I have no idea mate. We use Equifax because it works well with our system. We use Transunion whenever we need more information. When we do background checks at our company for new employees, we actually outsource the credit check to a third party who then goes and checks Equifax (not very efficient, but I don't make the rules)

I do not know how one would go about competing with these guys. I know Experian tried but they were too complicated for us.

[dealwhere]

Your TDS/GDS has absolutely no effect on your actual credit score as your income is not reported to the credit agencies.

It will however affect any additional credit you may or may not be granted.

Correct, TDS/GDS has no bearing on one's credit score BUT given that the op's credit history is good, the next thing he should be looking at is his TDS/GDS to make sure it is in line, especially if he wants additional credit products.

[dealwhere]

Some financial institutes don't really care about credit scores and grant credit mainly on tdsr

I don't agree with this. I don't know any financial institutions that grant credit who don't really care about credit scores. In my experience, they all do. Now, whether that is a sub-prime lendor or a conventioonal lender, they all look at credit scores and have certain cut-offs that they have.

[Syne]

You can't.
Both agencies are federal gvmt regulated

Then why am I paying a private company for them, if they're not subject to the competitive rigors and risks of the free market?

Sounds like a certain market might need to be nationalized. Hmm..

[dealwhere]

Then why am I paying a private company for them, if they're not subject to the competitive rigors and risks of the free market?

Sounds like a certain market might need to be nationalized. Hmm..

It is pretty competitive for lenders, we pay very very little - you don't even want to know how little we pay per report.

For consumers, ya, there is room for more market activity.

[mikeymike1]

I don't agree with this. I don't know any financial institutions that grant credit who don't really care about credit scores. In my experience, they all do. Now, whether that is a sub-prime lendor or a conventioonal lender, they all look at credit scores and have certain cut-offs that they have.

Credit score is secondary to all sub prime/special finance lendors. This includes TDFS and Scotia Dealer Ad
They already know these credit challenged individuals don't pay or haven't' paid so credit score is at most times unimportant. If they had good scores then they wouldn't be seeking out sub prime financing would they?(predicated they themselves are seeking it , not by a broker)
TDSR, booking values and loan exposure are whats most important - not scores

[dealwhere]

Credit score is secondary to all sub prime/special finance lendors. This includes TDFS and Scotia Dealer Ad
They already know these credit challenged individuals don't pay or haven't' paid so credit score is at most times unimportant. If they had good scores then they wouldn't be seeking out sub prime financing would they?(predicated they themselves are seeking it themselves, not by a broker)
TDSR, booking values and loan exposure are whats most important - not scores

Again, I disagree. Sure, for subprime lenders, credit scores are not weighted as much. THAT BEING SAID, when we dealt with Travellers who were bought out by ScotiaDealerAdvantage, they certainly had credit score cut-offs that they wouldn't touch.

[epiphano]

Now, for old accounts. PLEASE PLEASE PLEASE do not close your old accounts.

Too late. I closed my oldest card of 10 years this year and I am yet to be declined for more credit. And I'll be damned if a bank refuses to do business with me because of it. After all, isn't this what all this brouhaha is about? Getting more credit? So if a good credit score will get me the credit that I need, what's the point of having a better credit score?

[dealwhere]

One other point I wanted to mention is that there is no instant way to "repair" your credit like people advertise. If you have bruised credit, it will take time to fix. On the other hand, if you have good credit but want great credit, there are some things you can do.

[epiphano]

I don't agree with this. I don't know any financial institutions that grant credit who don't really care about credit scores.

They probably care a little bit but surely they care more about credit files.

[mikeymike1]

Again, I disagree. Sure, for subprime lenders, credit scores are not weighted as much. THAT BEING SAID, when we dealt with Travellers who were bought out by ScotiaDealerAdvantage, they certainly had credit score cut-offs that they wouldn't touch.

Of course if the applicant was over-extended his/her tdsr would be poor anyways and thus its score would reflect such.

My point is, score is not the be all and end all when it comes to applying for consumer installment and/or revolving credit

[dealwhere]

Too late. I closed my oldest card of 10 years this year and I am yet to be declined for more credit. And I'll be damned if a bank refuses to do business with me because of it. After all, isn't this what all this brouhaha is about? Getting more credit? So if a good credit score will get me the credit that I need, what's the point of having a better credit score?

To the average joe, having a 735 versus a 816 credit score doesn't mean much difference at all. But there are advantages to having higher credit scores. For example. if John has a credit score of 715 and Jeff had a credit score of 816 and both applied for the same credit card and were approved, as soon as the card appears on their report, John might have a new score of 685 and Jeff might have a new score of 755. I'm sure you get the general idea but the point is if both these guys wanted another credit product within 6 months of getting the credit card mentioned abouve, Jeff would have a better chance at approval, all other things equal.