821 FICO Score…

July 6, 2010

We’re looking at our mortgage and thinking about refinancing in order to take advantage of rates, which are about 2 points lower than our current mortgage. We received a letter from the bank, explaining the credit score. On a scale of 300 to 850, the score was 821. That’s pretty darn good if you ask me. But, it’s not perfect and since it’s not perfect the agency has to provide us with reason codes. Here’s what they told us regarding that score:

• Amount owed on revolving accounts is too high

• Too few accounts with recent payment history

• Proportion of balance to limit revolving accounts is too high

• Lack of recent non-mortgage installment loan information

The only two from above that might apply to our situation are the second and fourth ones. We have no credit card debt but we do use a Visa that is paid off monthly. Other than our house note and a car note, we have no debt. It seems crazy that that should count against your credit score. Oh well, 821 is awesome.

8 responses to 821 FICO Score…

  1. 821 is an awesome score! Well done. I agree with your comments as I, also, do not think that a lack of installment loans or having too few accounts should be a ‘negative’ towards your score.

  2. Yeah, the last thing you said bothers me too, especially since our only debt now is our mortgage. And I plan on paying cash for every car we buy from now on, unless there’s a 0% financing deal. Kinda scary to think our credit score will go down as our old, paid-off installment debts (past car loans and student loans) drop off our report. Well, hopefully we won’t need credit anytime soon.

    Congrats on your great score!

  3. Wow…that’s awesome!

    I paid for a FICO score two years ago and it was 807.

  4. I’ve investigated refinancing too, but its not cost effective for me. With your 2-point drop it might be worthwhile. Title-Insurance in TX is among the highest (if not the highest) in the nation so make sure you take into account the closing costs and your estimated payoff date (if paying extra on principal).

    Might want to run the numbers with rolling your car loan into the mortgage as well.

    Nice score BTW!

  5. Nice!

    We’re in the 770 range. I have no real idea why. Never missed a payment. Always pay our credit cards off in full. Oh well. Good enough.

  6. When I sold my house in Florida, I rented a place in Maryland. With the sales proceeds, I paid off my car loan. Paying off my only two debt instrumnets caused my credit score to drop a decent amount despite the fact that I was probably a better credit risk with absolutely no debt. I think it is Dave Ramsey that says that the FICO score only shows how good of a debtor you are, not a money manager.

  7. I haven’t seen my FICO score since Washington Mutual got bought out by Chase (WaMu, which used to be Providian, provided it to account holders for free every month but I guess Chase didn’t feel the need to spring for it). Last time I looked it was about 795.

    I had heard that part of one of the financial reform bills would allow people to get their credit scores free once a year?

  8. We always get the “too many cards open” comment, but still have scores above 800. We rarely use the majority, but consistently use our favorites and run up large balances as we dump everything on them and pay in full monthly.

    My advice to anyone who consistently runs up lg balances, but pays in full monthly, is to make more frequent (weekly/bi-weekly) pmts in the months prior to obtaining a loan. That way the o/s balance will be smaller and will affect your ratios and FICO in a more positive light.

    When we refinanced 15 mos+ ago I could see on the loan paperwork they obtained the monthly debt pmt amounts on our credit cards from the credit report based on a percentage of the open balances, ignoring that they were subsequently paid in full. It didn’t affect our obtaining our loan or receiving a good rate, but if one was on the border w/a credit score or their ratios I can see how it would negatively affect them.

    Just curious, what rates are you seeing these days? I’m tempted to refi again, but figure our 4.75% 15-yr is still respectable…but 4% or less would be so much better :)