How Can I Fix My Credit Scores?

I received the following question from a reader late last week and, frankly, couldn’t wait to write an article responding since it’s such a great question.

“John, I am in the middle of refinancing my home loan and I’m in the process of getting approved. The lender pulled my credit reports and FICO scores and there’s just no way they’re correct. My highest score is 808 and my lowest score is 802. I’ve never ever missed a payment in my life.  I’m 44 years old and no missed payments. I have perfect credit and I deserve a perfect score of 850 across the board. Why do I contact in order to have this fixed?”

Answer: First and foremost, congrats are your fantastic credit scores. 802 to 808 is indeed rarefied air, credit score style. I understand your complaint and it’s one that I’ve heard many times. You’ve never missed a payment so you should have perfect scores. I’m in the same boat with you.  In fact, we’re almost the exact same age and I’ve too never missed a payment on anything ever.

The problem is that never missing a payment doesn’t mean we’re void of credit risk.  For example, in the FICO scoring system your excellent payment history is only worth 35% of the point in your score, which means 65% of your FICO score points have nothing to do with whether or not you’ve missed payments.

logoIn the VantageScore credit scoring system, which now ranges from 300 to 850, your excellent payment history is but one of six measurements in your VantageScore credit score. Don’t get me wrong, you should and deserve to be proud of your accomplishment but it’s not enough.

Your scores are well past “good enough” to get any lender’s best deal. You accomplished that when you shot past 760. So, while I appreciate the desire to be better or perfect, it’s not necessary to get you the best terms available.

Also, read >  10 Sure-shot Ways To Boost Your Credit Score by 100+ Points

As far as your question, “Who do I contact in order to have this fixed?”  There is nobody to speak with because none of the scoring companies offers “consumer service,” like your cable company or your credit card company. Your score isn’t broken and thus doesn’t need fixing. You’re just not happy with it, which is very different.

I’d also caution you not to make the same mistake that many other consumers make, which is to change your credit management practices in order to improve on your 800+ scores. That’s very dangerous. You’re more likely to lower your scores than you are to improve them. Scores tend to move like water…they’re going to take the path of least resistance.  It’s much easier to lower an 800 than it is to improve it.

Be happy with your scores and don’t get all wrapped up with improving them. Clearly you have proven to the credit scoring Gods that you are an almost perfect risk as it pertains to borrowing money. Be happy with your 800s.

JRU on 60 Mins SetCredit Reporting Expert, John Ulzheimer, is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, founder of www.creditexpertwitness.com and a Contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry.  You can follow John on Twitter here.