How My Financial Reputation Might Be Better Than My Social Reputation

28 May

Wouldn’t it be great if people came with a friendship score?  One that told you how likely they were to return your phone calls, keep your secrets, and just generally not be creepy?  What would be even better is if such scores came from three independent sources- so that you could get a really clear picture of someone’s value.

No, wait, I got that wrong.  That wouldn’t be great.  It would be, oh what’s that word?

Oh yeah- terrible.  It would be terrible.  I’d have a score of about 30.  Out of 800.  (I’m horrible about returning phone calls.  PS- sorry Malerie).

The good news is, we don’t judge people’s value based on their friendship scores.  The bad news is, banks and potential employers do judge our value based on our credit scores.  That’s why it’s always a really good idea to know your scores.  (That’s right- today’s post is a commentary on credit scores.  You’ve been warned).

I’ve been signed up with CreditKarma for about four months now.  I saw the ad on TV, thought to myself “there’s no way that’s really free,” and set out to prove the TV wrong.  It turns out the TV was right, to an extent.

CreditKarma.com tracks all your credit accounts- your credit cards, your mortgage, your car loan, your student loan, etc.  It then uses a version of the credit score algorithm to compute your potential credit score.  Since the site operates independently of the three credit bureaus, the score is not guaranteed.  However, the site does help you get a good idea of where you generally are, credit-wise, and it really is free.  No credit card required for sign-up, and no paywalls.

When I signed up in February, my credit score was 732.  I had one credit card with a $0 balance, two student loans with a combined balance around $70k, no late or missed payments, and a delinquency notice for $53.

That delinquency notice concerned me.  I ordered my credit report through the site, which you can do for free once a year (just like you can order the reports through the bureaus themselves for free once a year).  When my TransUnion report came, I saw that I owed $53 to a Dr. B- for services rendered in Summer 2008.

This was a problem, as I’ve never seen a Dr. B-, and wasn’t even in Georgia during the Summer of 2008 (I was in North Carolina, letting children play on a huge aquatic airbag and teaching them to swim faster than a snapping turtle).  I called TransUnion, listened to their oh-so-fascinating hold music (Pachelbel’s Cannon? Really TransUnion?), and finally registered a formal complaint about that deliquency notice.  I assured the woman on the other end of the call that I a) was me, b) hadn’t seen a Dr. B- during the Summer of 2008, and c) did not, in fact, wish to send him $53.  The woman told me that TransUnion would “open an investigation into the matter, and mail the results in 6-12 weeks.”

6-12 weeks.  Great- my credit score investigation had the same delivery window as a late-night infomercial purchase (Oh my god- it’s a pillow AND a tea-strainer! I so need that!).

A mere two weeks later, a very official looking envelope arrived in the mail, addressed to me, with no return address.  As the local court system sends the same envelopes out with jury duty summons, I looked at it the same way a Hogwarts student would look at a red envelope (Actually, if the court system would send out Howlers via owl post, I would probably be a lot more excited to get a jury summons).

I carefully opened the envelope, ready to drop it on the ground and run away if it combusted (a legitimate concern in the HP universe), and took out the single sheet of paper.

It read, in its entirety:

Dear Ms. Anderson (They really called me Ms.  *sigh*)

     This is to inform you of the results of a recent investigation into your credit report.  The results are below.

Sincerely,

[name redacted]

TransUnion Investigative Services

space

Disputed entry- deleted.

Gee, thanks TransUnion for making that crystal clear for me.  Succinct is always better when dealing with sensitive financial information.  No one wants to read on and on about how a stranger USED THEIR NAME TO HAVE A WART REMOVED or anything (I have no idea if Dr. B- actually is a dermatologist. I just like to imagine that he/she is).

Because, you know, shingles isn’t painful enough.

In any case, the mysterious charge was deleted, and my credit score jumped to 755 in March.  It stayed there for April too, despite the fact that my student loan balance decreased by over $2k over those two months.

This month, my score is 763.  Want to guess why it changed?

I’ll give you a hint- it wasn’t because they finally updated my student loan balance.  It was because I opened a new credit card account.  That’s right- my credit score went up 8 points because I signed up for a new credit card.

*Sigh*  Credit scores are ridiculous.  Credit card companies are even more ridiculous:

  • I’m 25, and someone just handed me a credit card worth $10,000.  That’s 10x the limit on my bank-issued card.
  • Because of this, I am now more eligible for other credit cards with even higher limits.
  • This is what’s wrong with our country’s economy.

While I appreciate the card issuer’s faith in my financial status, I can assure them that I won’t be approaching my limit any time soon.  (Unless ThinkGeek.com has a fire sale, and then all bets are off).

So while my new credit card sits safely locked up, with its initial balance already paid off, and no intended uses until at least October, I’m going to enjoy my 763 credit score.  I’m also going to put a freeze on my credit to make sure no more surprise charges appear.  In Georgia, this costs $3 per bureau.  $9 isn’t much to pay for peace of mind.

Oh yeah, I’m also going to update you all on my student loan pay-off progress.

$8,825.82 (End of April balance)

+ $48.64 (May interest)

– $1,329 (May payment- just $5 off the ideal! So close, and yet so far).

————–

$7,545.46 (End of May balance)

My goal for May was to be under $7,800.  I made it by $254.54.  Since I’ve already drawn up the budget for June, and it looks like I’m going to be able to pay the full $1,334 (YAY! but more on that later), I’m going to set my end-of-June goal at $6,300.

space

Ok, I’m off to dye some clothes black in washtubs on the back deck.  Not to sign off on a cryptic note or anything.

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4 Responses to “How My Financial Reputation Might Be Better Than My Social Reputation”

  1. j May 28, 2012 at 3:34 pm #

    You are the ONLY person who blogs about budgets and finances that I will read. (You’re also the only one who does it with Howler post references and shingles cartoons.) xo

    • Losing My Cents May 28, 2012 at 4:02 pm #

      Thanks J! I’d like to think the vast majority of finance blogs could be improved with Howler post references. 🙂

  2. sydneyaaliyah May 28, 2012 at 9:54 pm #

    You are inspiring me to get my financial act together. Thanks.

  3. bhardeman May 30, 2012 at 8:08 pm #

    Loved reading this story! You are cracking me up. Glad to hear you use Credit Karma and that it helped you spot this false charge. Good luck on your student loan debt repayment journey!

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