So about a year and a half ago, I decided to check out my credit score. Nowadays it is easy and free to check out your credit report at http://www.annualcreditreport.com, thanks to the Fair and Accurate Credit Transactions Act, but the credit score (that magic number that is supposed to represent your entire history of credit use, but in actuality is probably just the result of some chimpanzee throwing a bunch of dice into the air, then typing the result of his throw into a computer) must usually be purchased. (As a side note, when applying for a loan you might be able to get a copy of the score if you ask nicely. And if you are denied the loan, you definitely are entitled to your score, plus you have the right to find out exactly why you were denied.)
Anyway, I checked my score by signing up for a free 30 day trial membership of some Experian product. I got my free score, then canceled the membership that day. Easy peasy.
A few days ago, I decided to check my score again. I figured a while had passed, I'd opened and closed a few accounts, let's see what's changed. I went and signed up for the same trial and got my free report and score. To my chagrin, the score was exactly the same as it was a year and a half ago. The report reflected all of my credit activity since that time, but the end "score" was exactly the same.
I'm convinced of the chimps.
DISCLAIMER: As a side note, the score Experian gave me was their proprietary PLUS score, not precisely the FICO score. The latter is the standard score used by most lenders. So Fair Isaac (of FICO fame) may not use chimpanzee's for their score calculation. There are dozens of other mammals that are just as capable.
2 comments:
I just wanted to leave my two bits regarding the coveted "FICO Score." As a loan interviewer, I often review credit scores. The FICO score is a tool that we use to determine quickly the history of credit. But more importantly, I review the actual history of open and closed tradelines, as well as derogatory accounts. Still, I think the system needs an overhaul. It is so easy for a little mistake, by some random person, to have a huge effect on your credit. Then, it is ridiculously hard to fix it.
In my humble opinion, the best option is to pay cash for everything then the FICO gods have no control over what you can and can't afford. Until we are wise enough to do that, the next best option is to beat the system by using credit to your advantage. That's all I have to say on that! :)
But there's the kicker. If you pay cash for everything, you have no credit history! Then when you really need a loan (like for a house), you can't get one because you have been too responsible with your money. It's crazy, I say, crazy!
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