Secondly, two words: Credit. Union. Yes, they looked up my credit score. Got a Visa with a good rate and a car loan the same day. Bye bye bank of america.

@the_wiggle:

I beg to differ. In phone conversations over the past 3 years with reps from CapOne, BoA and Chase, I have been able to get them to share my score. Two months ago, a rep from BoA (nee' Countrywide), spit out my score from all three bureaus at my request while trying to pitch me on refinancing my mortgage.

As for Bohemiam's dog, I believe the bank may have made an error. With a FICO score of 780+, I have a feeling the offers I get are legit.

@rushevents: Yes, GM's popularity comes from offering luxury (compared to Ford's pared down Model T) through GMAC financing. Ford insisted you pay for the car in full, but offered relatively cheap cars.

@shepd: Have you all forgotten that its still a buyer's market? Even if they start at 250k, I bet you could get it down to 220k. I also think our definitions of "reasonably desirable" differ. Oh well, enjoy your credit card debt!

I wonder if there is a way we can look that up?

Anything under $200k and you are looking at homes similar to the horror story I mentioned. That home was listed at $140k before the bubble. Similar quality (ie: Value is in the land) homes are listed at $160 - $180k now.

$300k doesn't get you a McMansion in Kitchener, it gets you 3 to 4 beds in a neighbourhood relatively free of gangs and graffiti artists.

$63k is the average income here. Have some fun with MLS for houses in Kitchener, ON.

Houses that don't need serious work and are in reasonably desirable areas start at $250k here. Houses to the east (Toronto) that don't need serious work start at $600k. Houses to the west that don't need serious work start at $300k (London). Houses to the north include a farm (because it's farmland) and therefore start at $1 million. And to the south (Hamilton) they start at $100k, but you'll need to kick the gang members out first.

If you're moving your family into it, do you really want a home you'll have to raze first?

I can sum it up in three rules:
1) Do the things that have a positive effect on your credit.
2) Don't do the things that have a negative effect on your credit.
3) Be aware of (at least annually) what is being reported to the credit agencies.

good luck.

//banking industry

@Jevia:

I would /love/ to buy a 3br home for 300K--in my area, that won't get you into a house, any house.

That's what this article is about.

It's a clear statement of causation, and the economic damages are usually very clear as well. (The thing that makes libel cases so difficult is that it's usually hard to show quantifiable economic damages.)

And yes, of course, in the US, the information has to be inaccurate for the claims to be libelous. That's what I meant by 'false information' and all.

@MostlyHarmless: I'm guessing that the 42 answer is in reference to The Hitchhiker's Guide to the Galaxy. And it's possible that the webservice may have been going with the same thought, though I doubt it.

@spanky: Its difficult to prove causation. You have to prove that you were damaged solely by the false information (which also actually has to be false, i.e. if you do have high balances on your credit cards, you can't say that the credit report is falsely saying you have high debts). If say your insurance rate increases or you lose out on a job, you have to find a way to prove that the insurance rate increased only because of the credit report, or that you didn't get the job only because of the credit report. That can be very difficult to do.

@HRHKingFridayXX: Depending on where one lives, 300k is certainly not a 'mcmansion.' Where I live (suburban PA), 300k buys a 3BR 2BA home with a 1 car garage and a smallish front and back yard. Average salaries probably aren't much above 60,000 either.

@shepd: Do you really need the 300k home? I live in a major metro area where prices haven't dropped (DC), and can still find a humble house for much less than that. We're putting away 10k out of a 60k income (4 years for 40k down on a 200k house). But hey, if you still want that mcmansion in the hip neighborhood, by all means run up credit card debt to pump up your FICO score.

The bureaus are a service setup to assist lenders, not consumers. They want that information to be accurate. If a bureau becomes known for inaccurate information, they will lose their customer base (i.e., the lenders). They act in good faith, simply relaying information reported to them. They do not have the ability to verify every individuals information. Hence the onus on the consumer to check their credit annually.
Is that fair? I don't know. But it's the only workable situation.

@howie_in_az: The credit board geeks and app-o-rama geeks could tell you to the $ amount decimal point % wise versus # of accounts.

I had Progressive Insurance rate me on -NOT- having enough open revolving accounts- 5 was their magic number. I spoke to an underwriter and asked why? In an indirect and round-a-bout way, she told me that people who are financially astute tend to file more insurance claims than people who have messy finances.

She also said specifically that the open account issue carried a very minor weight compared to prior accident and traffic ticket history.

End all of it was that I got a free credit report and had to pay 2x my prior insurance rate (unmarried vs married on the prior policy and only one rider versus two on my prior policy).

Getting credit when you have none has always been a bit of a challenge. This is why they want cosigners on twenty somethings' car loans.

And for places where a 20% down payment on the average home is a full years salary before taxes for the average family, like where I live (Average family income is ~$60k total, average house price is ~$300k)?

How frugally does one need to live to get that downpayment started, and for how many decades?

@squinko: It probably doesn't include regular divorce filings. It would be that someone owes a former spouse big time, hasn't paid up,hasn't even worked out a payment plan, and has a court order for collection on that amount.

What it does mean is that someone sued a person in court and won. It could be due to criminal restitution to victims or a civil court case.

Example: my current landlord has a judgement for about $5000 against the stooge couple that previous rented the house I am renting This was because because the couple either trashed and broke house fixtures/walls or didn't take out trash leaving the back yard filled with junk. And owed a couple of months rent on top of it. I would imagine that the couple's credit is pretty trashed due to this - if it wasn't already.

Yes, that is weird, considering it is actually something credit card companies take into account.

My mom couldn't get a credit card for years because she was a stay-at-home mom. This despite my dad having an immaculate credit rating and having held the same job for decades, and our home being owned, not mortgaged.

@squinko: That's child support, I think. Or anything else that a court orders collected, maybe in some states that includes tickets and settlements.

@FDCPAGuy: Data mining and demographic clustering are true scary in that companies will charge what the market bears and will segment the market to assure they can charge the max...

That's not to say all of that nonsense above has been completely worked out of the system, but at least the data being collected now isn't racist or sexist or requires a membership in a network of good 'ol boys.

I think several people in this thread are confusing those collecting the data with those applying it. Experian et al collect the data. Amex, Visa, State Farm, and apparently your employer buy it and apply it. If you have an issue with how it's being used, at least direct your energies toward the right parties - the creditors. Getting angry at the data is stupid. It's your data.

I was looking around for any information about this a while back, and all I could find was a business or two that tried this.

I suspect they have some kind of protection against this or something, just because so many credit reports have faulty information in them, and that information is used for so many things, it seems that if they were held responsible for damages, they wouldn't be in business long.

You do see that most of these have nothing to do with delinquency, right?

@Mykro: Yes, even when you buy a house, none of this will really matter if you pay your utilities on time and have a 20% down payment (not hard if you live frugally).

@Mykro:

Don't borrow money.

@rpm773:

Yeah, don't bother, he clearly hasn't thought this through.

@David in Brasil:

Sure, you can say that to Sears, and if you pay cash, then you're welcome to do so.

I can imagine saying to Sears: "This transaction between us is for the transfer of a refrigerator only. You may not access my credit history, record this transaction in any manner, access, use, or sell use my personal information in any way. If you don't agree to this, then I'll find someone else to buy the fridge from".

@HRHKingFridayXX: Is there a way to deny them business.. that would be swell..

@veronykah:

Which is fair, because that won't be on a credit report. If you don't have a job, but have a huge trust fund, then you're probably a good credit.

i read thru a report the other day - 27 credit cards. 27.

most of them hadn't been used in a looooong time, but come on - who needs that many cards?

These reasons may not be why you were declined. When a CC company runs a bureau it is returned with the top four risk reasons, regardless of your credit history. You may have perfect credit and will still see these reasons. Banks for soley rely on FICO scores to decide whether or not to give you credit.

And animals provide a butcher's ability to exist. Doesn't mean they're getting any favors from him.

So if you hired me as a contractor does that mean I can sell all the info I see while working in your home for 6 months (I have jobs that long). Would you be happy if I set up a booth outside on the sidewalk and profited from all the info I saw in your home "because me seeing inside your home was a necessary part of you hiring me"? Maybe I could sell information on your kids, or just like them, info on your bank statements I saw sitting on the table, your ok with that right because of your own "option" you gave that up.

I'm not asking for anything more than clear and up to date statements on the accuracy of the information they hold and profit from, not insider codes. This is not asking much. Wake up, stop being so docile people, stand up for your rights and dignity. If you cant even type out a proper sentence in a situation as minor as this than how much more so in something of consequence? Docile slave subservient sheep to their govt and corporations are whats killing America (coming from a Canadian).

@Telekinesis123: You're really overthinking this. If you don't want to be at the "mercy" of the credit bureaus, you don't have to be. Shred your cards, pay cash for everything and save up for the big purchases, just like your great-grandparents did...
Granted, that's not as easy as using credit, but it's 100% doable.
Credit extended to you is a benefit. Those doing that want to simply cover their asses. Seems fair to me. Granted, there seems to be no "hard and fast" rules as to what specific aspects on your record affect what the banks/credit cards/land lords will say. However, as a rule, if you pay on time, and don't overextend yourself, you'll be okay.
I acknowledge that mistakes on on credit reports are costly to consumers, and often times not the fault of the consumer (hence the word "mistake."). However, that's usually not the fault of the bureaus. They only report was is reported to them (there's that "middle-man" thing again). You're ire seems somewhat misdirected here.

just enough, of course.

Too few bank revolving accounts
Too many bank or national revolving accounts

OK, so what's the magic number of revolving accounts that consumers should have open at any given point?

No, they have a service to me because their ineptitude could end up costing a person thousands of dollars - even their job - if they mess up the info their profiting from, their activities are possible only by me and affect me. It is very much mine and all of ours business.

It's important to remember these factors also affect what interest rate you'll pay if you are approved.

Before shredding "pre-approved" offers, I usually take a moment to read them. Lately, many have been ambiguous about the interest rate - usually a statement that reads something like, "your rate will be between 9.9% and 19.9% depending on your credit history".

Since the lender is killing trees and spending money sending me the offer, my credit score obviously peaked their interest. The bitch is figuring out how much interest they want to charge.

The best thing to do when applying for any type of credit is to know your credit score before you apply and before the lender runs a real credit inquiry that puts a hit on your file. Once you know this, contact the lender and demand to know your actual interest rate based on telling them, "If my credit score is 750, what will my rate be?". (NOTE: Always use a "what if" score that's slightly lower than your actual score - I've found my score may change +/- 20 points in a month for no apparent reason.

This backs the lender into a corner and (unless you're way off on your actual score) will usually guarantee you get their best rate. I did this a few years ago when shopping for my mortgage. It cut out most of the bullshit on getting the best rate without killing my score due to excessive inquiries in the process.

You mean be a good slave and don't question your maser and you'll be saved the whip? Your trained well but sir I am not like you. I have good credit and pay all my bills but that does not blind me to the corruption and injustice of the whole industry. If anything its these goons like these companies who don't pay their bills and have ruined the world economy and were bailing them out. So in the end either way were the master.

Right, you don't think my, yours, ours, the worlds credit history and very personal information is a commodity and has real value? It obviously is because they have built a multi billion dollar industry around our *personal* information. If they want to collect, sell and make a living off my business, I and we deserve a say. They should report to us first and formost, mailing credit reports (account statements) monthly without charge and without asking for the privilege of using, profiting and distributing our personal information. People, stand up for your rights and dignity.

One bad thing that is in error on your credit report could cost you tens of thousands of dollars if you get a worse rate on a mortgage. Private for profit businesses with so much power over other peoples lives should have *much* more accountability and clarity in their operations, not just reporting to those whose own best interest is to have your credit report in as bad of a condition as possible so they can higher profits off you.

The credit bureaus are bad. LexisNexis is worse. Ugh.

As much as I love your answer there's much more to it than just payment history.

No it means that they are in order. Typically under the score on non-consumer reports you will see these codes with explanations on some style sheets. There are usually 4 of them the first on the list being the most important and the last on the list being the least important.

Pay on time.

We provide their ability to exist.

The risk codes will be listed in the order of importance, so the higher up on the list in your letter, the more significant it is.

Wait, does the lower number/higher on the list mean the code has more weight, or the higher number/lower on the list?

The article says the former, but I have a hard time believing the items up at the top have more weight than those at the bottom, by merit of their descriptions.

For example "Serious delinquency" and "Derogatory public record or collection filed" sound a lot more serious than "Too many accounts with balances"