Experian Plus Credit Score

David A. Szwak

Experian Plus Credit Score

Postby David A. Szwak » Wed Nov 30, 2005 10:04 am


Score disclosure

The Fact Act gives the consumer the right to request and receive a disclosure of their credit score. The CRA may charge a fair and reasonable fee for the credit score disclosure. The fee is to be determined by the FTC.
On November 3, 2004, the FTC published an advance notice of public rule making seeking comment with respect to it's obligation to determine a fair and reasonable fee for the score disclosure. The FTC has indicated that the current market based fees are fair and reasonable.

Experian's PLUS model is the score that we offer consumer's nationwide. The easiest access method is via Experian's toll free number 1 888 397 3749 and follow the prompts. Experian is currently charging $5.00 for the score disclosure.

David A. Szwak

Postby David A. Szwak » Wed Nov 30, 2005 10:05 am


Closing accounts when you have a good credit score

Dear Max,
I have zero potentially negative items and 30 accounts in good standing with a credit score of 765. Should I even tamper with my credit report by disputing to close the accounts and remove old unused accounts from it? Should I believe doing so will be greatly beneficial and possibly raise my credit score?


Dear ADL,
In Experian's PLUS model, 765 is a very good score. So, my advice is to leave your accounts alone!

The score indicates to lenders that the odds of you not repaying them as agreed are extremely small. Because you are such a good credit risk, any changes you make would likely have very little impact on the number and virtually no meaning in terms of whether or not your application is approved.

The effect on your credit profile, as in all cases, depends on all of the other factors in your credit history. Someone with a very positive score typically has several accounts that have been open and active for several years, no late payments, and moderate utilization of their revolving credit limits.

In those circumstances, closing an account should not make a significant difference either positively or negatively. It just means you had an account you didn't want or need, so you closed it. However, closing several accounts could have a significant negative impact.

Also remember that closing an account does not make it disappear. Closed accounts with no negative information in their history remain for 10 years as a positive part of your credit report or for seven years if you have missed payments.

Use caution when you are closing accounts to try to "fix" your credit. It may be viewed as a positive in that it reduces the opportunity for more debt which you may not be able to handle, or it can be a negative if it increases your overall utilization so you appear to be "charged to the max." Consumers have to evaluate their entire credit history and take action appropriate for their overall credit position.

A credit score tool, such as your credit report and score from Experian, or a more comprehensive service such as Credit Manager, analyzes your situation and provides the information you need to make positive changes specific to you.

If you are a very good credit risk, you probably shouldn't do anything. As they say, "If it ain't broke, don't fix it."

Thanks for asking.

David A. Szwak

Postby David A. Szwak » Wed Nov 30, 2005 10:06 am


How to get your PLUS Credit Score from Experian

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David A. Szwak

David A. Szwak

Postby David A. Szwak » Wed Nov 30, 2005 10:07 am

Experian National Score Index

Experian maintains an interesting site NationalScore.com showing various credit-related statistics for United States as a nation and every single state.

Some interesting facts:

- Average credit score is 678 based on Experian's "PLUS Score" range between 330 and 830. Region-wise, New Englanders have the highest average credit score of 699.

- US average credit card debt is $10,147 and average minimal monthly payment is $479.and New England again leads the league with an average balance of $13,208 and average minimal monthly payment of $560.

- US consumers on average have 3.15 credit cards and use 24.5% of available credit line. On average, each consumer has 0.76 account that is currently past due by one payment or more.

David A. Szwak

Postby David A. Szwak » Wed Nov 30, 2005 10:07 am

Credit Scores Age Like Vintage Bordeaux

By Dayana Yochim (TMF School)
August 22, 2005

Life's trajectory is pretty predictable: Potty training, braces and pimples, all-night studying/partying, punching the time clock for 20 years, midlife crisis, shuffleboard and Pokeno matches at the rest home, and finally -- permanent naptime.

Same goes with one's lifetime credit trajectory. A new study by the credit reporting agency Experian examined the borrowing habits of six age groups -- from credit score conception (applying for your first loan) to closure (paying off your last debt).

As you would expect, the older you get, the better you look on paper (at least to your banker). Here's the average score breakdown per age group based on Experian's PLUS Score range of 330 to 830 (higher being better):

Age 18-29: 637
Age 30-39: 654
Age 40-49: 675
Age 50-59: 697
Age 60-69: 722
Age 70+: 747
The early years (ages 18-39)
Life begins to get complicated once you move out of Mom and Dad's. There's your first credit card, your first car loan and mortgage, your first Botox treatment. It can take a while to establish a credit rap sheet, which explains why the youngest borrowers have the lowest average credit score.

But a few gray hairs doesn't mean you're done with those youthful indiscretions. The study found that those in the 30 to 39 age range had the highest number of late payments in the past year.

You might have outgrown lectures, but a gentle reminder (perhaps in the form of a Post-It note on top of your overflowing pile of bills) is clearly in order. Timely bill payments are a biggie to banks. In fact, your payment punctuality makes up 35% of your overall credit score. So put the check in the mail on time -- every time -- to establish a strong credit score foundation.

The middle years (ages 40-59)
With age comes the effects of more responsibility and gravity -- and that goes for finance as well as for skin care. For those between the ages of 40 to 59, this means larger mortgages and higher education financing.

Americans spend an average of 26% of their income on monthly debt (excluding mortgage or rent). According to the Experian study, the 50 to 59 age group held the highest amount of debt -- an average of $21,256, excluding mortgage loans.

An important measure of creditworthiness is your debt-to-available-credit ratio. This factor makes up 30% of your overall credit score. Add up your outstanding balances and compare it to your credit lines. If you are near (or exceeding) your credit limits, lenders get antsy.

The golden years (ages 60+)
Senior discounts, life experience, and retirement aren't the only advantages to growing older. Like fine wine, your credit score gets better with age. The kids are done with college, the house is nearly paid off, and you've learned that it really is what's on the inside that matters.

While the 70+ age group had the highest credit scores when compared with young whippersnappers, Experian found that this group also used their available credit the least (just 13.3%). The high score is natural: 15% of your credit score is determined by how long you've been using credit. But putting the cards on ice can have a negative impact on how lenders perceive you.

Even if a card is reported as "open" on your credit report, if you don't use it occasionally, the lender will cease to report activity. (Important note: You do not have to carry debt month to month to improve your score.) Idle accounts aren't necessarily a big deal to those who have no plans to establish new lines of credit (or tap into existing ones, like home equity). But you want to make sure there's no funny business going on with your cards, either. So take an occasional peek into your credit file to make sure that things are still tidy.

David A. Szwak

Postby David A. Szwak » Wed Nov 30, 2005 10:08 am

Is Baseball Bad for Your Credit?
Are you better than average?
According to Experian's National Score Index, the current average PLUS score in the U.S. is 678. How do you stack up against your peers? Check your credit file for accuracy and then look at your overall credit score. All three major credit reporting bureaus -- Equifax (NYSE: EFX), Experian, and TransUnion -- are required to give you a free credit report each year. (The program is being rolled out geographically, with total national coverage to be completed by September 1. See whether you're eligible yet.) You have to pay a few bucks extra to get your credit score. Credit report aggregators like TrueCredit (a Fool.com sponsor) provide a single report formatted so that you can do a true side-by-side comparison. Click here for a special Fool reader deal which includes a free credit score.

Dayana Yochim flosses semi-regularly and checks her credit score whenever she's feeling blue. She owns none of the companies mentioned in this article. The Fool's disclosure policy comes one-size-fits-all.

David A. Szwak

Postby David A. Szwak » Wed Nov 30, 2005 10:09 am

U.S. Consumers Are Using A High Percentage of Their Available
Credit Card Limit

IRVINE, Calif., March 1 /PRNewswire/ -- Experian Consumer Direct(SM), the
leading provider of online direct-to-consumer credit reports and products,
today announced the results of a nationwide study on consumer credit card
usage. Nationwide and statewide results can be found on Experian's National
Score Index site at http://www.NationalScore.com .

-- U.S. consumers have an average of 3.2 credit cards

-- Approximately 46 percent of the U.S. population have at least two
credit cards and approximately 10 percent of the U.S. population have
more than 10 credit cards

-- More than 16 percent of the U.S. population use at least 50 percent of
their available credit

-- U.S. consumers who use at least 50 percent of their available credit
carry an average of 4.6 credit cards

-- The national average credit score for those with credit card
utilization of at least 50 percent is 631 compared to the overall
national average of 678

"Credit cards are a convenient way for consumers to purchase items now and
pay them off over time," said Charles Chung, vice president of consulting and
analytics for Experian. "However, if mismanaged, credit cards can get
consumers into an unmanageable financial situation that can have a negative
effect on their credit rating and as a result, future credit will come at a
higher price or they may even be denied credit."

Tips for consumers on how to better manage their credit cards:

1. Make sure you have a plan to pay down your balance over a manageable
period of time (four to six months) before putting significant new
purchases on that same card. Keeping your credit card utilization
below 50 percent will help your credit score.

2. Be aware of all fees and charges associated with your credit card.
Make sure your monthly payment more than covers the fees and charges
in order to lower your overall balance.

3. It's a common fallacy that closing credit cards will always help your
credit rating. Focus more on the amount of available credit being
utilized, making sure you are not over extending your debt beyond
levels you can manage. Closing good accounts could actually hurt
your credit rating.

4. Having available credit cards in your wallet can be a good way to
build your credit history. They provide a safe and convenient means
of paying for goods and services and can be useful in case of
emergency. However, be mindful that even though you have available
credit, it doesn't mean you have to use it all.

5. Due to credit cards being used at physical retail locations as well
as for online shopping and phone purchases, there is more opportunity
for your credit card number to be used fraudulently. Therefore, you
should monitor your credit card usage, charges on your monthly
statements, and your overall credit profile on a regular basis. This
also helps you keep track of the amount of outstanding debt you have
and helps you budget and manage your finances.

The Experian study was based on a nationwide sampling of three million
consumer profiles. More information about this study, plus information at the
state level can be found on the Experian National Score Index site at
http://www.NationalScore.com .

About Experian Consumer Direct
Experian Consumer Direct(SM) delivers the Internet's premier credit
products and services to help consumers better manage their financial lives.
Its three-bureau report provides consumers instant access to their complete
credit history from their Experian, Equifax and TransUnion files. Experian
Consumer Direct's Internet sites include FreeCreditReport.com,
ConsumerInfo.com, CreditExpert.com and CreditMatters.com. The company
delivered more than 2.7 million credit scores in 2003 and currently, more than
1.6 million members belong to its credit monitoring service. Experian
Consumer Direct has established integrated co-branded partnerships with
Yahoo!, Microsoft, EarthLink, LendingTree, Quicken, E-LOAN, and E*TRADE Group.
The company is part of GUS plc (London Stock Exchange: GUS.L).

For further information please contact: Heather Greer, Experian Consumer
Direct, +1-714-830-7756, heather.greer@experian.com

SOURCE Experian
Web Site: http://www.experian.com

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