Curious about the issues surrounding credit scores and how much this gets into it.
When I refinanced, I explained the situation to the other bank's loan agent. They emailed their underwriting division, and the underwriters simply issued an override.
Not sure if that works these days or not, but my point is that credit scores are complete bullshit. Hopefully most people will push the button, inadvertently opting out of credit reporting, and that corner of the industry will simply stop existing.
Lenders already do more due diligence than the credit agencies do.
If you default on a loan, there could be a central record (say, at the court house) of this, and lenders could consult that. That would fill in the remaining missing functionality of the score (and do so in a way that is transparently free of institutional racism, etc).
Without precision in the risk model, cost to the consumer will go up to mitigate risk. Someone who has paid all their credit lines for 10 years but and has never defaulted has the same risk profile as a person who has frequently missed payments.
You can also juice it up or down by over a hundred points by accumulating and then rapidly paying down balances.
So what here determines if the score goes up instead of down? I’m planning on getting a mortgage soon but wife’s credit score is in high 600s. If we can make it past, 720, we are told we’ll get a better rate. So I’m curious as to how to bump up the score.
Then there's things like age of oldest account, average age of accounts, etc. You may be able to add her to your accounts to improve this factor, if your accounts are older than hers.
Then balances. You get dinged for having a balance on too many accounts. I think you also get dinged for having zero balance everywhere. I think 'ideal' is 3ish cards with balances (you can (and should) pay the whole balance every statement, reporting is usually done just after the statements). Highest ever balance should be less than credit available or you get dinged; ask for credit increases on cards where you ever went over the limit. Total balance shouldn't be more than some % of total credit, I think 35%? You also get dinged for high % current balance on any one card. Again, you can add her on high limit, low usage cards to help her score. She'll get more score points as a joint account holder than an authorizer card holder.
You get dinged for recent (6 month?) credit inquiries, but inquiries are grouped, so if you apply for new credit, try to get it all done in a few days; mortgage inquiries have longer to be grouped.
If you know when your creditors do reporting, you can adjust your payment dates to tweak things. You might make a payment to your credit card before the statement closes even in order to show a lower utilization % and that could move your score a lot depending on details.
Find a way to pay down revolving balances to zero.
If you have cash sitting around, great. Otherwise borrow from a 401(k), friends or family, send non-reporting payments in late et cetera. Running balances rapidly to zero tends to cause a 50 to 100 point bump. After you’ve got approval, rebuild the balance and use that credit to repay the loan. In summary: transfer the debt from reporting to non-reporting sources.
If you’re thinking longer term, find bullshit collateralised reporting loans and take them out. Securities-based loans, HELOCs. Low rate. Manufactured borrowing. But it’s a credit line paid back on time. The algorithm likes those.
The Privacy, Security, & OSINT Show did a podcast on it.[0]
0. https://inteltechniques.com/blog/2022/04/15/the-privacy-secu...