Personal Finance

My Credit Score is shockingly low

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  • Jan 15th, 2018 4:27 pm
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fred125 wrote:
Jan 11th, 2018 12:29 pm
Might be a dumb question, but is TransRisk the score provided by Credit Karma?

I just had a new credit inquiry on Credit Karma and my credit score from 817 to 763 between Jan 5 and 10. What explains this? Is this the TransRisk score I'm getting from Credit Karma?
Not a dumb question at all.
Indeed the score you get from Credit Karma is TransRisk, and you’re not the first, and won’t be the last, to experience extreme credit score drops with that model.
Good news is, you don’t need to pay attention to that score at all.
As @DebitsOnTheLeft mentioned, just use CK to verify the contents of the report are correct, and just ignore the score altogether.
You’ll know your credit is in bad shape when you begin to get declined for credit on a constant basis.
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Tommycoupons wrote:
Jan 11th, 2018 12:04 pm
Your available credit is too high in my opinion and probably why the score is low. I'd eliminate the $20k CC that's where your problem lies... If you have around $13K available total on credit cards and everything else is clean on your record your score will be in low 800's
TransUnion TransRisk, and many other scoring algorithms don’t factor available credit, only balance to limits.
Lenders can still decline an application if they feel you have enough credit available, but it’s got nothing to do with the score..
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Sep 19, 2013
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- You credit score is not low.
- Credit score is more like a rubber band - one month its 670, next months it maybe 690 and a month later 720.
- Having a stellar credit score and maintaining it has zero benefits over having a good credit score.
- Unless you are close to opening a new mortgage or car loan, you shouldnt worry about credit scores. Just keep doing what you are doing.

Source: I have been churning credit cards for last few yrs and have been monitoring credit score in the range of 620 to 780.
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playerunknown wrote:
Jan 11th, 2018 10:19 am
From what I remember, when I was getting my mortgage back in 2016 - I was in the 800's, I recently got a new Infiniti without any credit issues less than 3 months ago.

Do I need to take action?
I think the recent hard hit for the car (if financed) would cause a temporary drop. Give it a few months and check again.
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ROYinTO wrote:
Jan 11th, 2018 3:44 pm
I think the recent hard hit for the car (if financed) would cause a temporary drop. Give it a few months and check again.
The car is leased.

Thanks for all the tips, I just wanted to make sure nothing crazy is going on with my score - I don't want it to effect my ability to get another mortgage in the future.
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Every lender has a different scoring algorithm they use for 'credit scores'. Just because you're low on one, doesn't mean you're low on all of them.

For secured loans, score isn't particularly relevant. And if you're taking on unsecured loans, my simple question would be "why"? Way too many people needlessly worry about credit scores rather than just focusing on good and sustainable use of credit.
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playerunknown wrote:
Jan 11th, 2018 4:06 pm
The car is leased.

Thanks for all the tips, I just wanted to make sure nothing crazy is going on with my score - I don't want it to effect my ability to get another mortgage in the future.
A lease is a type of credit. They give you a car worth tens of thousands of with the promise that you'll make payments to them for X months. They check your credit before they do that and it would definitely be a hard hit that you drop your score, but only by 20 points or so.
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playerunknown wrote:
Jan 11th, 2018 11:32 am
also, does it matter that my report does not mention my mortgage at all?

Also, since its my first mortgage, and relatively new, will that affect my score negatively? since technically most of my credit is now tied up in the house?
Different answer: Not all loaners post to Equifax or Transunion a mortgage. Sometimes too (in my case) the mortgage, since it's linked to an All-In-One, is posted as a revolving credit.

As for you score, check in a month or two. I had an issue with Transunion where 1 week it dropped 40 points, was back up 47 points the following week .
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670 is "Fair" or "Good" - but most lenders care that you have 650+ - which is what you'd end up at without any blemishes such as collections. 620+ for mortgages - the big one most are wired about. So I would not worry about it to sleep.

Your credit card MIGHT be reporting the use as a balance partway into your billing cycle, which may explain the lower score. Credit utilization lowers scores. But if this does affect a lender's decision, usually the lender will accept you on the grounds that x debt is paid down to y amount.
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FirstGear wrote:
Jan 11th, 2018 6:38 pm
670 is "Fair" or "Good" - but most lenders care that you have 650+ - which is what you'd end up at without any blemishes such as collections. 620+ for mortgages - the big one most are wired about. So I would not worry about it to sleep.

Your credit card MIGHT be reporting the use as a balance partway into your billing cycle, which may explain the lower score. Credit utilization lowers scores. But if this does affect a lender's decision, usually the lender will accept you on the grounds that x debt is paid down to y amount.
burnt69 wrote:
Jan 11th, 2018 4:10 pm
Every lender has a different scoring algorithm they use for 'credit scores'. Just because you're low on one, doesn't mean you're low on all of them.

For secured loans, score isn't particularly relevant. And if you're taking on unsecured loans, my simple question would be "why"? Way too many people needlessly worry about credit scores rather than just focusing on good and sustainable use of credit.
^This poster said it in a good way as well. The lender is much more comfortable when there is an asset useable as collateral. In that realm usually 650+ (or 620+ in the case of CMHC) is fine, and sometimes you can even go lower. No credit and income history is worse than bad credit and income history. They're concerned that you're meeting basic debt-to-income ratio servicing requirements, you don't have long record of collections and missing payments, and you have a record of paying your bills on time. Even if you do have a habit of maxing your credit cards, many lenders will let it slide as long as you are not missing payments, OR they'll make a condition that x debt must be paid down to y amount.

I was 22 when I obtained my first mortgage with a 626 credit score through CIBC (2.69%/5 yr); 23 with roughly the same credit score with B2B (2.29% variable). Then a $91K auto loan through BMW Financial Services @ 3.9%. I had 1 collections account of $926 paid about 1 year ago from the first mortgage and a history of maxing credit cards - mostly the MBNA 0% BT transfer deal over the years to buy stocks. Income was that of questionable oil & gas when oil was $26/barrel. CIBC just made the condition with me that I had to pay it off and show the respectable statement of proof.

Conversely I have never been approved for any unsecured credit outside the MBNA, PC Financial, and Canadian Tire Mastercards, not even overdraft protection from TD, despite being with them for 12 years. But aside from the MBNA deal most unsecured credit products come with horrid rates of not much use, unless you want to buy high growth stocks or trade/speculate.
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I wouldn't say you need to take action. Credit score seems to turn into a bragging rights type of thing with people who want to consider themselves financially savvy and well-to-do. I doubt it'll ever impact you, you already have your mortgage and your car. Don't miss payments, you'll be fine. 670 isn't bad, people who have problems because of low credit score I think usually have under 600, at that point I think you start maybe being impacted. Above that, I doubt the average person ever really feels it except for not having a number to brag about.

I've been over 700, sign up for tons of credit cards for bonus' and I've 'tanked' my rating to the high 600's over the years of churning. No impact, not worried about it. I own a house, I have a mortgage, I've never been told by any banker that there's any problem. Never missed a payment in my life, never have had a cent of bad debt.
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Nov 8, 2017
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My mom got denied a loan cause she had to much available credit with a bunch of unused credit cards she kept in her safe deposit box. Some will see that as a red flag having all the available credit.
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User455957 wrote:
Jan 11th, 2018 10:54 pm
My mom got denied a loan cause she had to much available credit with a bunch of unused credit cards she kept in her safe deposit box. Some will see that as a red flag having all the available credit.
Did the loan officer not request some lines be closed as a condition of approval for the loan?
If not, then that’s likely not the only reason for the decline.
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User455957 wrote:
Jan 11th, 2018 10:54 pm
My mom got denied a loan cause she had to much available credit with a bunch of unused credit cards she kept in her safe deposit box. Some will see that as a red flag having all the available credit.
Being retired and asking for an unsecured line of credit for a vacation or wedding or something yeah having $40k in available credit card limits could be a redflag. 650 or 800 and asking for a reasonable mortgage the score will no no effect. Unlike the US where the scores do matter and rates can be higher for those with good rather than excellent scores.
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How does your score look on Credit Karma?

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