Paying judgments: Lew Sichelman, 2002 and 2010

With the Memorial Day weekend fast approaching, syndicated columnist Lew Sichelman took a shortcut.

Lew Sichelman, 2002: 

Beyond that, though, proceed cautiously. One thing you don’t want to do is pay off any judgments or collections that are at least 24 months old.

Not only is this “unlikely to get you where you want to go,” [mortgage broker Ginny] Ferguson warns, it could turn an old problem the scoring software views as insignificant into a new one the program sees as much more serious.

Why? Because scores are based on the last day of activity. So if you pay off a 5-year-old credit problem, it becomes a “yesterday event” that will have a much more profound — read that “negative” — impact on your score.

Lew Sichelman, 2010:

Beyond that, though, proceed cautiously. One thing you want to be careful about is paying off any judgments or collections that are at least 24 months old. Not only is this “unlikely to get you where you want to go,” Ferguson says, it could turn an old problem the scoring software views as insignificant into a new one the program sees as much more serious.

Since scores are based on the last day of activity, paying off a five-year-old credit problem could become a “yesterday event” that will have a much more profound — read that as “negative” — impact on your score.

2002:

In a misguided attempt to improve their credit scores, too many mortgage borrowers are taking steps that end up doing more harm than good.

2010: 

In a misguided attempt to improve their credit scores, too many mortgage borrowers are taking steps that end up doing more harm than good.

2002:

Among other blunders, they are paying off judgments when they don’t have to, closing out old accounts they shouldn’t and opening up new ones and unnecessarily consolidating their credit cards.

2010: 

Among other blunders, they are paying off judgments when they don’t have to, closing out old accounts and opening up new ones when they shouldn’t, and unnecessarily consolidating their credit cards.

Etc., etc.

 

From: Greg Fisher 
Sent: Friday, May 28, 2010 1:10 PM
To: Watts, Craig H
Subject: credit score, FICO, effect of paying judgment

 

See http://blog.creditscoring.com/?p=1257

 

Does paying a judgment decrease the FICO score?

AJC blogger counters her U.S. Senator

Speech-making, writing, blogging, stating and yakking adds up to much mush

Last week, the U.S. Senate passed its financial reform bill with an amendment regarding credit score use in employment.  Senator Udall from Colorado sold the idea by saying that employers use credit scores.  The problem with that is that the consumer reporting agencies say that they don’t even provide credit scores for employment purposes.

Udall has not replied to a request asking for substantiation.

Two weeks ago, as an Atlanta Journal-Constitution blogger profiled the Equifax consumer reporting agency CEO, the writer dropped the E-Bomb, referring to a “paranoia.”  Sh’yeah!  A self-fulfilling prophecy in the making.

The blogger has not replied to a request for substantiation.

But, redemption for ATL came in the personage of another AJC blogger.  She quotes her senator, then contradicts his statement.  Rana Cash writes:

“I believe it’s only fair to allow consumers access to their credit score when it is used against them to deny credit, require a higher interest rate on a loan or prevent an applicant from being hired for a job,” said Sen. Johnny Isakson (R-Ga) in a statement. Employers often use credit reports, but do not have access to credit scores.

Ouch.  Ouch-O-Mondo-Matic!

The senator was asked by creditscoring.com to reply with substantiation.

Rag-tag army of dissenters

Cash is not alone.  John Ulzheimer, a New York Times blogger and no slouch in credit reporting and scoring said that there is “mountain of evidence that scores are generally not used by employers.”  He talks about the phenomenon on televison.  He had the last word on it– then had the last word on it.

Highly-intelligent and incisive Bankrate writer with exquisite taste in multimedia Leslie McFadden discovered the creditscoring.com video and wrote about the issue in “Credit score myth persists.”

In the Columbia Journalism Review, a reporter had an epiphany and, in a rare moment of leadership in the media, felt a sense of responsibility to his readers that caused him to– gasp– actually make a correction.

They are joined by ChoicePoint, the Privacy Rights ClearingHouse and CNN.

And finally, Lester Rosen, lawyer, author, speaker, expert witness and background screening company president– who knows a little about employment credit reports– keeps hammering away at the “urban myth.”

But, when you’re up against the Federal Reserve, with its access to congressional hearing rooms, it ain’t easy.

The Fed has not replied to a request for substantiation.

Average FICO credit score missing

Just when Wikipedia gets its act together, the average FICO credit score goes missing.

In the first story of Two and Two (a new section on creditscoring.com), questions are posed to FICO.  The median, the mean, the CEO, and an absent Experian all play their parts.

Things just don’t add up.  How is America supposed to know where it stands?  Is the average going up, or down?  What’s the big secret?

AJC, and credit score and job applications paranoia irony

Right in Equifax’s hometown, in an interview piece on chairman and CEO Richard F. “Rick” Smith, a writer for the Atlanta Journal-Constitution asks, “Is there too much paranoia about credit scores, which can affect everything from loan and job applications to insurance premiums?”

Apparently, he missed the story about Equifax/employers/scores, so the irony of the notion of paranoia is painfully accentuated.

‘Dude’s on vacation.

Experian: Employers use scores, but we don’t provide them to employers

Experian told John Ulzheimer what is not in employment reports.  One of those things is “Credit score (read that again please….credit score is not included).”

However, the consumer reporting agency still maintains, “Credit scoring helps potential lenders, landlords, and employers quickly gauge an applicant’s credit history.”

Experian chairman John Peace got some of it right before his big announcement in July, but he has other things to do, now.

Enough to be Dangerous: CreditCards.com

Recently, Experian (“the leading global information services company”*) announced that it and CreditCards.com “will co-host a live, interactive, online town-hall discussion of credit reporting and scoring.”  CreditCards.com made the same announcement, replete with countdown clock to the exciting event.

Experian’s newfound public outreach/reach-out for goodwill follows the drubbing it took at the hands of Congress and the FTC regarding the FreeCreditReport.com debacle.  Among other adventures, Chairman John Peace and Experian have traveled the the viral video route recently.  There’s a fab, telegenic, “STYLISH, SMART, & SASSY” (click “HOSTING REEL” for a demo if you’re interested), newly-minted credit history expert and a bevy of B-list stars.  It’s all packaged up with cutesy, sprightly and playful plucking strings to indicate when it is time to laugh (and you will need it), similar to scenes on Wisteria Lane and at Seattle Grace.

If you think that you can manage all that (and would want to), Experian is still looking for you.

CreditCards.com knows Enough to be Dangerous.  They would have you believe that credit score factors include “employment, income” (FICO scores do not consider income and employment), and even “debt to income ratio.”  And, speaking of experts and employment, the consumer reporting agencies do not provide credit scores for employment purposes.  But today, while a battle rages in statehouses from coast-to-coast, one of the CreditCards.com’s “experts” wrote that employers use credit scores.  It wouldn’t be the first time that that happened.  And, they are in good company.

Take what these two tell you with a grain of salt.  And if you participate in their forum, be sure to ask about your AWOL Experian FICO score, and what they are talking about with the line:  “Credit scoring helps potential lenders, landlords, and employers quickly gauge an applicant’s credit history.”

 

 

*as opposed to Equifax, “A global leader in information solutions” (and, indeed, “Leading with Integrity“), or TransUnion, “a global leader in credit and information management.”