[antjones21]

Anyone know if BMW Financial reports to the credit bureaus differently than other banks? I have leased all my life and I was leasing a 2016 Jeep Grand Cherokee and my credit was 750, I traded the Jeep in (had 18 payments left) and leased a new '19 X4 in late January. Now my score dropped to 650 and it's showing a $19,000 increase in total debt. What gives?

[MechX3M40i]

Too many variables to know what the cause is. We have no idea what happens to other aspect of your financial life. For example, were your accounts recently hacked and someone stole your identity and opened multiple credit accounts? Too many other factors to consider here...

I'm not a financial expert, but to my knowledge, if you get the credit score furnished to you by the same credit bureau that BMW Financial used prior to giving you the lease, then likely the score will be mildly negatively impacted since the recent inquiry was counted in the equation of calculating the score. However, a score reduction in the magnitude of 100 should involve something else that's much more major, such as default to a mortgage or bankruptcy filing rather than simply opening a new account.

You may want to check out if the precious lease, that you said had payments left, is properly and officially closed. If not, the credit bureau may treat this account as still open and you are now showing missing recent payments as a result. Good luck.

[antjones21]

I just checked myFico and the score is 737 on Equifax, 742 on Transunion. So Credit Karma and Capital One must be full of it or something. Cause Fico is the most reliable score out there right?

[MechX3M40i]

Originally Posted by antjones21

I just checked myFico and the score is 737 on Equifax, 742 on Transunion. So Credit Karma and Capital One must be full of it or something. Cause Fico is the most reliable score out there right?

FICO is the most widely used 'formula', but the score will still have to depend on the data put into this mysterious black box from the credit bureaus. While you are at it, you might want to get the score based on Experian too (you already checked out Equifax and TransUnion and their scores appear normal).

Yes, any other type of scores that deviate a lot from any FICO is probably good for your reference only and not to put too much stock into them.

[antjones21]

Originally Posted by MechX3M40i

FICO is the most widely used 'formula', but the score will still have to depend on the data put into this mysterious black box from the credit bureaus. While you are at it, you might want to get the score based on Experian too (you already checked out Equifax and TransUnion and their scores appear normal).

Yes, any other type of scores that deviate a lot from any FICO is probably good for your reference only and not to put too much stock into them.

Thanks, I plan on checking the Experian next week or may wait until April comes just to make sure everything is up to date.

[hal4uk]

Yeah... A 100 point drop sounds quite suspicious. But, on the bright side, a perfect FICO score is ZERO.

[MechX3M40i]

Originally Posted by hal4uk

Yeah... A 100 point drop sounds quite suspicious. But, on the bright side, a perfect FICO score is ZERO.

LOL - only if they would allow that! The typical range is 300 minimum and 850 the max. You can get no score if you don't have any kind of credit history.

[Tchgrif]

adding 19k to your debt shouldn't lower your score by 100 unless you have crossed over the invisible set line of debt to income or if your income is low and it affects your debt to income ratio. this might be as simple as someone has you making less than you actually do. getting all three complete reports is a good idea at this point to make sure nothing is in error. if two have your information correct and one is wrong fixing it quickly is a good idea as bad information spreads like a bad rash.

[weez]

Originally Posted by Tchgrif

adding 19k to your debt shouldn't lower your score by 100 unless you have crossed over the invisible set line of debt to income or if your income is low and it affects your debt to income ratio. this might be as simple as someone has you making less than you actually do. getting all three complete reports is a good idea at this point to make sure nothing is in error. if two have your information correct and one is wrong fixing it quickly is a good idea as bad information spreads like a bad rash.

FICO doesn't know your income, but credit utilization will play a big factor. If suddenly your credit utilization increased, then throw an auto loan on top of that and a missed payment, the 100 point drop isn't unreasonable. There is also always a big variation between the credit bureaus.

I went from 0 to $54K in installment credit (BMW FS) and my FICO went from 804 to 801.

[Tchgrif]

Originally Posted by weez

FICO doesn't know your income, but credit utilization will play a big factor. If suddenly your credit utilization increased, then throw an auto loan on top of that and a missed payment, the 100 point drop isn't unreasonable. There is also always a big variation between the credit bureaus.

I went from 0 to $54K in installment credit (BMW FS) and my FICO went from 804 to 801.

while it's true that your fico score has nothing directly to do with your income how lenders adjust your credit worthiness based on your debt to income does affect that number, for example how much credit you are extended from a lender is based on your income but if you suddenly used all the extended credit from multiple sources that might account for the drop but you would be aware of why that happened, and while it's not unusual for one report to be different than the other two he's saying only one suddenly dropped his number by 100. that is unusual and a 100 point drop difference is also unusual. I don't sit around checking my credit reports but on the occasion that I do its at most different by 15 not 100.

[weez]

Originally Posted by Tchgrif

while it's true that your fico score has nothing directly to do with your income how lenders adjust your credit worthiness based on your debt to income does affect that number, for example how much credit you are extended from a lender is based on your income.

It's more to do with how much credit you use based off the credit extended to you (utilization). If you have $10K in credit cards and use $9000 of that credit, then you have 90% credit utilization which is quite high and seen as a risk factor. Get that down to $500 (5%) and watch that credit score jump...or if you do the inverse, watch the score drop. Your income could go jump by $1M a year and it would have no impact at all on that credit score, even though clearly your debt to income would significantly drop.
I'm a credit card churner (you can google that lol) with almost 20 credit cards and over $125K in credit between them (more than my annual salary), but since they get paid off twice a month, my utilization stays very low and my score is pretty stable. The biggest drop (temporary) is when I open a new credit card (hard inquiry), but then goes back up after the card is reported. Even though my average age of credit history takes a minor hit, the credit utilization ratio goes down and I've never had a late payment (huge factor) so my score stays high.

[hal4uk]

Originally Posted by MechX3M40i

LOL - only if they would allow that! The typical range is 300 minimum and 850 the max. You can get no score if you don't have any kind of credit history.

Actually, if you don't use credit at all, you'll eventually fall off the chain, and effectively have a zero score. That's perfect, because you're no longer utilizing your income to build wealth for banks, and you can use it to build wealth for yourself 😁

Reading the comments, there's a lot of good information here to get/keep a good FICO score. What's missing is a good explanation of what that score really is... It's a measure of how well you make money for the banks.

I get the whole "life ain't no dress rehearsal" thing, and we all want nice things (BMWs anyone?), so not preaching here. Just some food for thought. Trust me... It's easy to wander into debt, but no one just "wanders" out of it.

[weez]

Originally Posted by hal4uk

Actually, if you don't use credit at all, you'll eventually fall off the chain, and effectively have a zero score. That's perfect, because you're no longer utilizing your income to build wealth for banks, and you can use it to build wealth for yourself 😁

You're kidding right? I use credit cards for everything and trust me, its a hell of a lot more lucrative for me than using cash. If the cc companies are making money too (not much with me), then it's mutually beneficial. Also there's an argument for using a low interest or 0 interest loan (you won't get with a zero credit score) on a car and then invest the cash that you would have spent on the car and gain a higher interest rate....building wealth for yourself. Your theory is severely flawed.

[MechX3M40i]

Sad, but true, that having good credit scores also impact things other than borrowing money.

For example, ever wonder how you can pay less for car insurance besides being a good driver and shopping your insurance around? You guessed it, get good credit scores.

Don't want to get a mortgage to buy a house, so opt for renting instead? Well, they check your credit scores too!

Employment background check? Some industries do take that into consideration.

[MechX3M40i]

Originally Posted by weez

You're kidding right? I use credit cards for everything and trust me, its a hell of a lot more lucrative for me than using cash. If the cc companies are making money too (not much with me), then it's mutually beneficial. Also there's an argument for using a low interest or 0 interest loan (you won't get with a zero credit score) on a car and then invest the cash that you would have spent on the car and gain a higher interest rate....building wealth for yourself. Your theory is severely flawed.

+1... Having top tier scores help me get no-fee rebate credit cards which I never carry a balance. So I earn points/rebates without letting the banks make a single dime off me (banks still love me since they make money off the merchants whenever I use my cards on everything from groceries to utilities).

I also had/have 0% rate on auto loans based on my scores so I'm happy there.

[hal4uk]

Folks, the "food for thought" I was offering wasn't so much about the score itself. It was about debt. I think it's a bad thing, and I recommend avoiding it.

For anyone that thinks it's impossible, they're right. It's impossible for them.

Anyhow, let's say I wanted to rent an apartment (I don't, but ya never know). And, let's say they turned me down. I'd buy the complex. Problem solved. That's how my "severely flawed theory" works.

Once again, it's just food for thought. I hope it helps someone.

[weez]

Originally Posted by hal4uk

Folks, the "food for thought" I was offering wasn't so much about the score itself. It was about debt. I think it's a bad thing, and I recommend avoiding it.

For anyone that thinks it's impossible, they're right. It's impossible for them.

Anyhow, let's say I wanted to rent an apartment (I don't, but ya never know). And, let's say they turned me down. I'd buy the complex. Problem solved. That's how my "severely flawed theory" works.

Once again, it's just food for thought. I hope it helps someone.

There's a difference between credit and debt. Managing money and using credit wisely is beneficial and smart. Most people who would just buy the complex aren't wasting money on a $60K vehicle. And yes, debt is (can be) a bad thing. But thats also not what you said.

[hal4uk]

Originally Posted by weez

There's a difference between credit and debt. Managing money and using credit wisely is beneficial and smart. Most people who would just buy the complex aren't wasting money on a $60K vehicle. And yes, debt is (can be) a bad thing. But thats also not what you said.

Beer summit?

[SROC3]

When BMW checks you initial score it's always through Experian. If they need to generate a "better" score for you so that you get a better lease/finance rate, then they do all 3 credit bureaus.

[Aegisboost]

Good question, but in my opinion, it would be better to consult a company that specializes in this field, because I could give you advice, but I do not know how true it is and if you could trust the knowledge mine. That's why I always turn to http://www.mcgeewm.com when I have such problems because I know that I will receive the correct answer and even advice such as it would be better to do. So it is already your decision how you will proceed, it must come out as you planned and I hope that everything went well.

[zukmeister]

Damn dude, you brought a 3 year old dead thread back to life