Whenever I see an add for something like Credit Karma . com, or FreeCreditReport, or whatever, the credit displayed is always right around 728. What’s magical about that number? It’s not perfect-- in fact, it’s more than 100 points lower than perfect (850), but it’s not what I’d call low. Is there something special about it? Is in the bottom threshhold for getting prime interest rates, or is it the mode score in the US?
I guess I can see them not giving the people in the ads a perfect score, because that could be demoralizing for the target audience, which is people whose scores fluctuate, and are working on their credit-- if you have never missed a payment, you know what your score is, and you would monitor mainly for identity theft, and identity thieves don’t generally leave you with a score of 728-- more like 400, but that’s demoralizing too.
This is all guessing though. Does anyone know the actual reason? Did test groups watch different versions of commercials and for unknown reasons respond most favorably to the ones where the credit score was 728?
I know this is really a GQ, but I figured it’d devolve into speculation, so I went ahead and put it in IMHO. I’m interested in hearing people’s speculations if no one knows the actual answer.
According to Credit Karma, 700-750 is in the ‘good’ range so 728 is solidly in the middle plus a few points. Most people with below 700 scores would like to see themselves there and are realistic enough to know they’re not going to be in the 800’s any time soon but believe that if they track their scores better they can improve them to that mid-good target. That crowd is also the target of their credit card and debt consolidation loan offers. People in the good/excellent range generally have better credit management skills and already have the cards they want/need.
Of course the “plus a few points” is because exactly 725 wouldn’t look “random”.
I think it is very hard to stay above 800 unless you are very well-established in a high-paying and very secure job. I recently changed jobs and moved to the midwest (with all of a two week planned “unemployment” between the jobs) and just the fact that I no longer had “multiple years in my current job/location” status was enough to push me out of the 800s. Mid 700s seems to be the upper range for “typical good credit”.
Probably similar reasons are why so many ads for scales show the weight as “126.4”.
My credit reports have no information at all about my employment. How can I know if that information would improve or detract from the credit score?
Maybe 728 is just the statistical average of the credit scores of their users.
I think that once you get above a certain number (750, I guess) it doesn’t really matter. Loan officers just need to be able to check off that you are above that number, and the fact that you may be a lot higher–vs. just barely higher–isn’t going to affect what they do, or the interest rates you get.
Weird crap affects your credit. When I was getting out of credit card debt, my score was going up, but then when I cancelled the card that had a yearly fee, my credit rating dropped. I had less available credit, and it didn’t matter that I had voluntarily cancelled the card. I took another hard hit when I paid off my mortgage, because it shortened the length of my credit history to have that drop off my report.
I subscribe to a credit monitoring service hosted by Transunion, and one of the features is a “simulator” that’s fun (and informational). You can change account parameters as you wish and instantly see how your score would change. Simulate a bankruptcy or a major new mortgage just for kicks.
I haven’t looked, but there might be a similar simulator available other places, free. The Transunion one is not.
According to Transunion, I can raise my credit score by a few points if I merely raised by credit card debt limits. Since I rarely use credit cards at all, there’s really no point, but it might be fun to raise one and see if Transunion is correct.
The difference between 750 and 850 has little to do with actual creditworthiness. To get into the 800s you need to actually borrow a significant amount, and obviously pay everything off flawlessly.
If you are wealthy enough to not need to borrow money, just your credit cards will give you a good rating; but it’s quite difficult to get much above 800 because they simply don’t have any record of you borrowing significant sums money and paying it back.
In other words - they are simply going off payment history. Unlike analysis of corporate creditworthiness, they have no idea of your personal “balance sheet”.
One of my cards that gives me my score reported that one of the factors lowering my score was the lack of a recent or active installment loan. So because I don’t have a mortgage and my car was paid off, and I didn’t particularly want a boat, they were knocking off 10 or 20 points.
But I think we’re also derailing the OP unless we’re all accepting my hypothesis.
I think that by and large we do. People with very high scores don’t care what their specific credit scores are, and people with very low scores don’t believe they can do anything significant about it. People with reasonably good, but not spectacular, credit are the target market for these services because a couple of dozen points either way really affects the interest rates on the loans they can get.
I am a counterexample to some assertions in this thread. I haven’t had a job for 20 years. I haven’t had a loan or mortgage for 20 years. I pay my credit cards off every month, and only have a couple of them for a combined limit of about $30K, which I never get remotely close to. My credit score was 835 last year, but for some reason went down to 810 this year.
It’s also true that my high score is of no use to me. I was turned down for a car loan (the dealership offered 0%, so I thought I might as well earn a little extra interest by leaving my cash in a MM account,) and even for an Amazon credit card that they kept pestering me to apply for. The problem is I have no income; I just live off of my savings. I have substantial assets, both cash and property, but they evidently don’t care about that.
I honestly don’t get it. Which is more likely in this economy — that somebody with little savings but a decent job will lose his job, or that someone with a lot of savings and a lifetime track record of spending conservatively will suddenly blow through a million bucks?
That was my initial thought, but the US averagefor Experian is 687. The state with the highest average is Minnesota at 718, so 728 is substantially above average everywhere.
PS: I know the SD frowns on it a little, but I love thread drift. I remember once a thread on another board I was on that started out about AA, and went through a phase about where you could get the beast tacos in LA, and ended up with something about muffin recipes. There might have even been a slight hijack about drop spindles.
I would submit that you do have income. You’re living off of something. You don’t have a job, which is different. Use a number such as the amount of money you cash out each month or each year as your income. You could also use the amount that you gain each year through your investments. If there is a follow up question like “source of income”, then you can follow up with “investment income” or “retirement accounts” or whichever label people are most accustomed to hearing/most comfortable with. My parents use retirement accounts.
Same reason watches always say 10:08. A little trivia. For decades, analog watches always showed 10:08, when the hands made a perfect V angle… Then when digital watches came along, a bizarre coincidence. On a LED display, 10:08 happens to be the time when the diodes emit the maximum amount of light.
