My Credit Plan Blog

Why Monitoring Your Credit is Wrong

Fri, 22 Apr 2022 21:34:33 GMT

The three major credit bureaus, Experian®, Equifax®, and TransUnion® have marketed different credit monitoring tools to help you track the credit information in your credit report – as long as you pay something. But, why don’t the credit bureaus do it? It is their information. I’ll explain.

The three major credit agencies have created agreements with lenders both large and small to send your loan information to them. This information includes all your personal information, including address and social security number, loans that have been opened and paid, balances, along with other types of information.

The three major credit bureaus have amassed a lot of personal and credit information which they in turn, sell to companies for profits. This includes credit reports requested, and marketing for different loans and financial services. The information in their credit reports is their information. Even though it contains your information, it is considered to be their information, or their “asset”.

As a result, you have limited access to our information. You oftentimes have to pay to get a copy of your credit report (unless you go to the free annual website).

A Backwards Business Model

Which brings us back to the original question. Why are you paying to monitor something (your credit information) that isn’t even considered your property?

That is the problem. If your personal and credit information are the property of Experian, Equifax and TransUnion, they should have systems in place to make sure your information is correct.

The only reason to monitor your credit is if you receive something in return of value to you – like your actual “lender’s credit scores”. It would not make any sense to just monitor your credit without that, because you are in essence, doing the job for the credit bureaus.

An 84 point difference from what Experian.com® said!

Fri, 29 Oct 2021 19:49:52 GMT

Jason pulled his FICO® score from Experian.com. It said 604. He showed that score to his real estate agent as he started looking for a house and she told Jason that he needed to improve his credit score before he could purchase a home. She referred him to a loan officer who helped consumers raise their FICO Scores. The loan officer then pulled his Experian FICO Score and it was 690. What!?!?!

An 84 point difference between what Experian.com said and what his lender reported.

Thinking he would not qualify for a mortgage, Jason was depressed and was on the verge of giving up. 604 is what he thought his FICO score was. Knowing that he needed at least a 620 FICO Score, Jason felt hopeless.

The Problem with Experian.com

Jason Discovered something very critical to his (and anyone’s) credit rating. He was given a FICO Score that is substantially different, is not used by lenders, and misinforms many consumers.

The Experian.com score is a “non-lender” FICO score called the FICO 8. Any consumer would be hard to find any lender who uses that particular FICO Score for their loan qualification. FICO has produced over 50 score models and most of them are not used by lenders.

Mortgage lenders use a FICO Score called the Classic FICO Score. As we all can see there is almost always a difference, and too often, this difference misleads consumers. It can be very costly not knowing your actual lenders FICO Scores.

84 Point Difference

84 point difference is huge. Any difference is misleading. Just because someone says they are offering a FICO score gives no value to that number. You must look for the Classic FICO Scores that mortgage lenders use.

Classic FICO Scores are found at www.MyCreditPlan.org.

Experian Boost® was Actually Dropping Mark's FICO® Score

Wed, 27 Jan 2021 21:31:55 GMT

Mark was making every effort to raise his FICO scores in order to purchase a home. His Experian (Classic) FICO scores was at 702. He had gone in and opened an account with Experian Boost hoping to increase his credit scores. However, he was questioning that maybe it was not helping his scores.

Experian Boost uses credit references from utility payments to supplement a person’s credit score. In Mark’s case, he opens an Experian Boost account and had Dish Network report his payment history, along with Comcast, AT&T, Questar Gas, and Netflix. The accounts all started reporting within 30 days. He thought Experian Boost was helping him, but his FICO score was not moving after all this effort.

One of the concerning issues he saw on his credit report right next to his Experian FICO Score was the statement “Number of Accounts with a Balance.” Every utility payment on his report had a balance of the last bill amount paid. This was concerning to him so he contacted the support group with My Credit Plan.

After reviewing his concerns, the counselor recommended to close a couple of the utility accounts with Experian Boost. He went and removed the Netflix and Dish Network account from the Boost program. What happened next was totally surprised.

What Mark discovered totally surprised him; his Experian FICO score went up to 710 by dropping the utility accounts out the Boost program. The Experian Boost program, through the extensive utility reporting program, was actually dropping his Experian FICO Score.

Through Experian Boost, every time a utility payment is reported to your credit report, it reports another open account with a balance. One of the big factors in your FICO scores is the number of accounts with a balance. As the Boost program from Experian was adding more and more utility payments, it was actually dropping his Experian FICO Score.

This has been evidenced in another situation two months ago. Chris dropped out of Experian Boost and saw his Experian FICO score increase almost 13 points. This also happened from the reduction of active loan balances when his utility payments no longer reported to his credit report.

Experian Boost program is not as helpful as one person might think. It can provide some minimal improvement in the right situation. The average score improvement for Boost is 12 points. It is 58 points for My Credit Plan. For this reason, best to work with My Credit Plan.

FICO is a Registered Trademark fo FICO / Fair Isaac Corporation. Experian Boost is trademark by Experian.