Any FICO algorithm experts here?

[RealtyNole]

Does anyone know if adding an authorized user to a well aged store card will give the AU credit for the FULL history of the account? Or, will it only be going forward?

The store card has a very high limit on it and it’s always been paid on time ( 4+ years). It also has an excellent debt to credit available ratio.

I’m trying to help my 18 year old jumpstart his credit.

Thanks for any help!

 

[RONole]

It varies per creditor. Some won’t even report on the AU. You must ask. It’s not as fast but, get him a cash secured card and keep a balance on it. A very low balance. After a few months of payments he will have scored. Pretty good ones.

 

[Spearhead04]

I don’t think the authorized user is generally going to have it show up on their credit report. Ultimately if the bill if due the account owner is the one they come looking for.

 

[RONole]

That’s not true. I look at credit reports all the time. Plenty of trade lines report under AUs. The results from adding an AU vary per creditor though.

 

[RealtyNole]

We’re getting him a secured Visa through Capital One. We’ve encouraged him to use it to charge a few small bills on each month (and pay most of it off when the bill comes in). Experian gives me credit each month for a card that I’m an authorized user for. Actually, it’s the second longest history on my report. It shows up just like anything that’s solely/jointly in my name. Equifax (I think it’s equifax) does too, but the balance doesn’t appear to count towards my debt to available credit and total credit ratio. It does with Experian.

I was just curious if they’d give him the past history. Thanks for your reply.

 

[goldmom]

I'm wanting to check my credit score from time to time - I have no credit issues that I'm aware of but I'm apparently behind the curve in knowing how often I even need to check it, or which agency is most up to date and accurate. Any guidance is appreciated!

 

[RealtyNole]

@goldmom, I’ve really enjoyed my experience with Experian.com. It gives me all three major reporting agencies (Transunion and Equifax are not immediately up to date). The service let’s me lock my file to prevent unauthorized usage. It sends me alerts whenever there is a significant change to my report. It monitors the internet for my name and personal information. It’s only about $20.00 a month… great value IMO.

 

[F4Gary]

My Citibank and USAA credit card accounts show me mine online.

 

[RealtyNole]

My Citibank and USAA credit card accounts show me mine online.

Yeah, my credit cards do that also. However, I like the extra tools that are available to me inside the Experian application.

 

[bryanscho]

I'm wanting to check my credit score from time to time - I have no credit issues that I'm aware of but I'm apparently behind the curve in knowing how often I even need to check it, or which agency is most up to date and accurate. Any guidance is appreciated!

Each one let's you check it free once a year. Just stagger when you do them and you'll be fine. Dont pay for anything extra.

 

[FSUDoles]

I'm wanting to check my credit score from time to time - I have no credit issues that I'm aware of but I'm apparently behind the curve in knowing how often I even need to check it, or which agency is most up to date and accurate. Any guidance is appreciated!

I give you an “850”. : )

 

[goldmom]

I give you an “850”. : )

Darn. Why so low?!

 

[nynole1]

I use an app called Credit Sesame, but there are others. They are free.

I also dont think its a good idea to put anything on your credit card that you cant pay in full at the end of every cycle. Teaching someone to do otherwise is a bad less, IMO.

 

[FSUDoles]

Darn. Why so low?!

Well....it’s the top of the scale on my Cap One site, plus I couldn’t give you a 904, so 850 seemed like a suitable score, and area code. Take it or leave it.

 

[NoleinATL]

I'm wanting to check my credit score from time to time - I have no credit issues that I'm aware of but I'm apparently behind the curve in knowing how often I even need to check it, or which agency is most up to date and accurate. Any guidance is appreciated!

Go to annualcreditreport.com
As mentioned previously you get a free report from the big 3 every 12 months. This does not give you a score ( you can purchase if you chose) but these are the actual reports and lets you know what is in the report and what is being reported

 

[RealtyNole]

I also dont think its a good idea to put anything on your credit card that you cant pay in full at the end of every cycle. Teaching someone to do otherwise is a bad less, IMO.

IMO, it's good to carry a small balance on the cards. It's been my experience that when you leave a little on there... the company is much quicker to raise your limit (and this helps with your ratio and your score). There's a difference between not being able to pay it off and electing not to do so.

 

[nynole1]

IMO, it's good to carry a small balance on the cards. It's been my experience that when you leave a little on there... the company is much quicker to raise your limit (and this helps with your ratio and your score). There's a difference between not being able to pay it off and electing not to do so.

My credit score is 817 and I have never carried a balance in my life. I just dont believe in paying interest(other than my mortgage where I dont have a choice). I am certainly no expert on this subject, but ive done well with credit standing by that principle.

 

[RealtyNole]

My score is also in the low 800's. I can understand your POV on the matter though. Actually, I'm kinda stuck. Just can't seem to get it much higher. It's like I've plateaued.

I had a lender/financial planner tell me a long time ago to carry a small balance each month. Nothing too large. I may try to pay everything completely off and see if it FINALLY raises me past where I've been hovering for months.

 

[nynole1]

My score is also in the low 800's. I can understand your POV on the matter though. Actually, I'm kinda stuck. Just can't seem to get it much higher. It's like I've plateaued.

I had a lender/financial planner tell me a long time ago to carry a small balance each month. Nothing too large. I may try to pay everything completely off and see if it FINALLY raises me past where I've been hovering for months.

At that number, you will probably get the best possible rates on any money you borrow, the rest is gravy.
If you are really obsessed with improving it, I would suggest the Credit Sesame app which will show you have you score in 5 different categories, and how you can improve your score. The one area I'm not perfect in is average credit age: I currently stand at 4 years and 10 months. Apparently 5 year average is some kind of magic standard lol

 

[RealtyNole]

@nynole1, I am.... Just like I always want to beat my high score / level on Tetris. Or, my time on Super Mario Bros.

We used to never concern ourselves with credit. We were "Only pay cash when you buy something" people. However, we've learned that having a good credit rating is super helpful when trying to get a lender to finance a Flip, spec, or development. The cash for downpayment and the LTV still matter, but lenders like their Trimerge number.

 

[nynole1]

@nynole1, I am.... Just like I always want to beat my high score / level on Tetris. Or, my time on Super Mario Bros.

We used to never concern ourselves with credit. We were "Only pay cash when you buy something" people. However, we've learned that having a good credit rating is super helpful when trying to get a lender to finance a Flip, spec, or development. The cash for downpayment and the LTV still matter, but lenders like their Trimerge number.

I'm in the same boat as you, and understand the frustration of the situation. Obviously, business requires borrowing money for the majority of us. It's funny we are having this conversation now because I'm in a position where I will probably need to get a business line of credit soon to expand. I probably should have gotten it a month ago, but I've been trying to figure out ways to make this work without borrowing. That's how much I detest loans and interest.
On the real estate side, I only pay cash. It's a secondary business (rental) for me, so I prefer to be patient and pay cash only. Here in NY where you can't find anything worth buying under $350k, that can take a while.

 

[F4Gary]

Goldie there is also Credit Karma. You can see your credit score there for free. I don't use them but that's what it says on their website.
Mine is 825 and it says it would be higher if I had some loans I was paying on. We own our home and cars outright. May be getting an RV loan later this year. That may make it go up by going in to debt....go figure.

 

[RealtyNole]

@F4Gary, I don't think Credit Karma gives you Experian though. And a lot of credit providers rely on that particular service. They do have excellent tools and articles though. Very helpful tips.

 

[swflnole]

@F4Gary, I don't think Credit Karma gives you Experian though. And a lot of credit providers rely on that particular service. They do have excellent tools and articles though. Very helpful tips.

To answer your question....yes your son would receive the full trade history of your card, however the lenders(fannie mae) have caught on to this so you did right by getting him a secured card as well.

 

[RealtyNole]

To answer your question....yes your son would receive the full trade history of your card, however the lenders(fannie mae) have caught on to this so you did right by getting him a secured card as well.

I owe you and your family a round of beers! Thank you! It's exactly what I wanted to hear. I really appreciate it.

 

[RONole]

As someone who is frequently trying to help people raise scores, it’s nice to see folks who take pride in theirs. A few points....

1) Keeping the small balance is better. Especially for a new person building credit or someone seeking to repair credit. For someone with established/strong credit and good credit depth, not such a big deal. Once you have a mortgage it becomes your biggest driving trade line too.

2) Pretty much all the free services show a higher score than what we see when we do a tri-merge mortgage pull. It’s irritating but, true.

3) The creditors have the choice of how they report. They do not have to report the AU any certain way. Some creditors only choose to report to one or two of the repositories instead of all three. When establishing new credit be sure they report to all three.

4) Creditors report your data once a month and you won’t know what day. You may run a card up every month and then pay it way down or off at the end of the month but, you have no way to know what balance gets reported. If you are soon to make a big purchase and know your credit will get pulled for it then get the balances down and don’t add charges to the cards for 30 days prior to be sure the reported balance is in that low/optimum range.

 

[RealtyNole]

2) Pretty much all the free services show a higher score than what we see when we do a tri-merge mortgage pull. It’s irritating but, true.

Isn’t it because they use different models for a mortgage? Like Experian has their main FICO 8 model, but they also have other models that certain creditors rely on. Like the FICO 2 (it may be a FICo 4 or 6. Can’t exactly remember) model for mortgage lenders. Automobile lenders, credit card issuers, and store cards each go with another FICO model. Even a bank can use a different model for opening a new account. And there can be a bit of a difference on your score from model to model...

I’m guessing that TransUnion and Equifax also have different models as well. So, if they all rely on different models... that trimerge number could possibly be a lot lower than the FICO 8 that I see on my welcome screen inside the Experian app.

What I’m going around my bottom to get to my elbow is: do you know which particular model a lender uses for mortgage consideration from each service? I know it’s a trimerge. But. I’m now curious which models it merges from. Again, I’m assuming that Equifax and TransUnion have multiple models for them too. Thinking that I may want to start focusing my attention on that model.

I’m seeing a lot of anecdotal evidence that my local real estate market is cooling down. If the market does go down… I want to be in a good position to purchase several properties. I’m still kicking myself for not buying a home in Tallahassee back during the real estate crash. Our daughter is 18 and out of state tuition and housing are going to be a real b^%*h!

 

[RONole]

I’d have to do some digging to tell you the models but, you are correct that they use different ones. I wouldn’t worry much about it though. Positive factors are positive factors and with A+ credit these differences are not as important. I tell folks that anything over 780 is strictly for bragging rights.

 

[Banditking]

I hover around perfect. It’s length of time with credit, not having too many cards with balances, ratio of available credit to balance, and no reports mostly. My parents opened a credit card for me in college. I didn’t buy my first house until I was in my mid 30s. Credit was close to perfect by then. I’d not carry balances because you pay interest on that. I use my credit cards for most purchases and pay them off every month. If you aren’t really using it (the credit score), it doesn’t matter. An 18 year old shouldn’t need an 800 credit score because they shouldn’t be borrowing anything of significance for years.

 

[Seminole'13]

Credit reports do NOT report that some balance from a previous month was carried over to the next month. This will not help your credit. The balance reported on a credit report is the one when your statement cuts.

The advice when building credit should be: (1) do not make a payment until after the statement cuts, but (2) pay in full before the due date.

The credit report will not note that some balance was carried over from the previous month, but you will pay big interest on it... especially on these “my first credit card” cards.

Obviously you don’t want to pay the balance before the statement cuts because that’s when the report will say you aren’t utilizing any credit.

 

[RealtyNole]

I hover around perfect. It’s length of time with credit, not having too many cards with balances, ratio of available credit to balance, and no reports mostly. My parents opened a credit card for me in college. I didn’t buy my first house until I was in my mid 30s. Credit was close to perfect by then. I’d not carry balances because you pay interest on that. I use my credit cards for most purchases and pay them off every month. If you aren’t really using it (the credit score), it doesn’t matter. An 18 year old shouldn’t need an 800 credit score because they shouldn’t be borrowing anything of significance for years.

I bought a national real estate franchise in my very early 20's. At the time... I was the youngest female owner in the world. Not sure if that was ever beaten or not. A decent credit score was taken into consideration along with cash flow.

The point is: he doesn't necessarily have to have an 800 Credit Score at 18, but we do want to help him fast track it as much as possible. He's expressed an interest in going into the family business (something that we have never forced upon our our children). There are LOTS of opportunities available. If we had utilized credit more and not tried paying cash for everything... I believe that we would be way further along in our retirement savings. We still have a good 20 years (assuming we 'retire' around 55 - 59). Nobody taught us about money and credit. I wish that they would have. Now, we plan to help both of our kids try and master it.

 

[SoddyNole]

I bought a national real estate franchise in my very early 20's. At the time... I was the youngest female owner in the world. Not sure if that was ever beaten or not. A decent credit score was taken into consideration along with cash flow.

The point is: he doesn't necessarily have to have an 800 Credit Score at 18, but we do want to help him fast track it as much as possible. He's expressed an interest in going into the family business (something that we have never forced upon our our children). There are LOTS of opportunities available. If we had utilized credit more and not tried paying cash for everything... I believe that we would be way further along in our retirement savings. We still have a good 20 years (assuming we 'retire' around 55 - 59). Nobody taught us about money and credit. I wish that they would have. Now, we plan to help both of our kids try and master it.

Just my opinion but your business has a far greater potential than any outside investment. Your business will provide for you and your family, fund your retirement and possibly create opportunity and a career for your children. There is no 401K, simple IRA or other vehicle that will come close to that. As a business owner you very well may want to continue work past 55, 65 or into your 70s, that is not uncommon. Incurring more risk or utilizing credit as you grow your business can easily be what kills the golden goose, especially for smaller businesses.

 

[RealtyNole]

Just my opinion but your business has a far greater potential than any outside investment. Your business will provide for you and your family, fund your retirement and possibly create opportunity and a career for your children. There is no 401K, simple IRA or other vehicle that will come close to that. As a business owner you very well may want to continue work past 55, 65 or into your 70s, that is not uncommon. Incurring more risk or utilizing credit as you grow your business can easily be what kills the golden goose, especially for smaller businesses.

I agree with a lot of what you're saying, but don't use your own money to finance a development project (especially when interest rates are so reasonable). The only possible exception would be if you already own the land. I would never sink all my cash into a development. Better to use money that belongs to someone else. The only other option is to take on partners... that's just not the least bit appealing.

No, I wouldn't ever want to overextend myself and then have to scramble to come up with the payments. But. There's a balance between maximizing potential opportunities with outside money and not wanting to carry the full weight of it. That's why due diligence is so important. The deal has to make sense (and dollars too!).

 

[nynole1]

I bought a national real estate franchise in my very early 20's. At the time... I was the youngest female owner in the world. Not sure if that was ever beaten or not. A decent credit score was taken into consideration along with cash flow.

The point is: he doesn't necessarily have to have an 800 Credit Score at 18, but we do want to help him fast track it as much as possible. He's expressed an interest in going into the family business (something that we have never forced upon our our children). There are LOTS of opportunities available. If we had utilized credit more and not tried paying cash for everything... I believe that we would be way further along in our retirement savings. We still have a good 20 years (assuming we 'retire' around 55 - 59). Nobody taught us about money and credit. I wish that they would have. Now, we plan to help both of our kids try and master it.

Can you elaborate on this:
"If we had utilized credit more and not tried paying cash for everything... I believe that we would be way further along in our retirement savings."

 

[RealtyNole]

Instead of tying up the majority of money in a single project and going one at a time... we could have financed it and did multiple projects. If you've got a 20 - 25% return (not counting management and commissions) on each project... selling 5 or 6 (compared to 1) offers way better return. Even with interest to the bank... you come out way ahead. So, if we had done 25 or 30 instead of 4 or 5... we'd would have been better off. And that money could have been used to make it work even better for us.

 

[nynole1]

Instead of tying up the majority of money in a single project and going one at a time... we could have financed it and did multiple projects. If you've got a 20 - 25% return (not counting management and commissions) on each project... selling 5 or 6 (compared to 1) offers way better return. Even with interest to the bank... you come out way ahead. So, if we had done 25 or 30 instead of 4 or 5... we'd would have been better off. And that money could have been used to make it work even better for us.

Could you have guaranteed that kind of return on all of those projects? If so, thats a great deal.

 

[RealtyNole]

Could you have guaranteed that kind of return on all of those projects? If so, thats a great deal.

A 20 - 25% return should be extremely realistic on a land deal with a spec home going up. Of course, as the market cools off… it becomes a lot riskier. That’s why you strike when the iron is hot. Borrowing money from a bank and paying some interest is well worth the added expense. We could have done a lot more instead of trying to pay cash and not go in debt. And that extra profit would have gone a long way towards accomplishing other short and long term goals.

 

[nynole1]

A 20 - 25% return should be extremely realistic on a land deal with a spec home going up. Of course, as the market cools off… it becomes a lot riskier. That’s why you strike when the iron is hot. Borrowing money from a bank and paying some interest is well worth the added expense. We could have done a lot more instead of trying to pay cash and not go in debt. And that extra profit would have gone a long way towards accomplishing other short and long term goals.

I certainly see your perspective and understand the math, I'm just too risk averse to work that way.

 

[osceola74]

Darn. Why so low?!

Because of your membership on here. lol

 

[Banditking]

Instead of tying up the majority of money in a single project and going one at a time... we could have financed it and did multiple projects. If you've got a 20 - 25% return (not counting management and commissions) on each project... selling 5 or 6 (compared to 1) offers way better return. Even with interest to the bank... you come out way ahead. So, if we had done 25 or 30 instead of 4 or 5... we'd would have been better off. And that money could have been used to make it work even better for us.

Sounds like a good way to go bankrupt ala many real estate groups in the 2008 bust and the 80s bust before that. Rinse repeat. I know a lot of people do it. But, early in the process you create considerable vulnerability while you hold the debt and have no equity. One at a time while you create the illusion you know what you’re doing seems safer.

One way to fasttrack him would be to provide whatever resource you had to buy a real estate chain in your early 20s. They don’t seem that pricey compared to say buying a McDonald’s.