In this episode, I responded to a patient who received a $50 medical bill that she didn’t owe. Check out the video, and a few FAQs about what you can do if you find yourself in this situation.
Call the collection company to tell them you’re going to mail documentation showing that you do not owe the money, then send a written request asking for validation of the debt. Include copies of your Explanation of Benefits showing that you owe $0.
It’s your legal right to ask the collector to prove the debt is real and that you owe the amount claimed. You’re requesting details like the original creditor, the amount, and documentation supporting it.
Yes. The transcript references sending the written request within 30 days of the collector’s first contact. That window is important, so send it promptly.
FAQ: What do I include with my validation request?
Include a short letter requesting validation plus copies of the EOBs that show you owe nothing. If you have the returned mail envelope, include a copy of that too to show you tried to resolve it with the provider.
Disclaimer: The content on this blog is for informational and educational purposes only and does not constitute legal or financial advice. Watching our videos and reading our blogs does not create an attorney-client relationship. Always consult a licensed bankruptcy attorney or financial professional about your situation.
I sat down with Patrick Brenner to talk about subprime credit cards. His view is simple: Subprime credit cards exist so people outside prime can still participate in the credit system. They are expensive because losses to the banks are real. For borrowers who can manage a budget wisely, these cards are useful when treated as training wheels. According to Patrick, the question is not good or evil. The question is how to use them without getting nicked by fees while your credit score climbs.
Check out the video, or keep reading for the FAQs.
FAQ: What is a subprime credit card and who are they for?
A subprime credit card is an unsecured card designed for people who do not qualify for prime offers, usually because of a thin file or past credit hits. These products give you a reporting tradeline and a small limit so you can create recent on-time history and earn your way back to cheaper credit.
FAQ: Why are APRs and fees so high on subprime cards?
APRs and fees are high on subprime cards because default rates in these portfolios can hit double digits each year, and lenders price for that risk. Small limits also mean fixed fees feel bigger, which is why watching the fee table and keeping balances near zero is essential.
According to Patrick, subprime credit cards are not inherently predatory when pricing and disclosures match the risk and you can opt out by choosing a different product. They turn predatory when fees hide in the fine print, limits are chewed up before the first swipe, or marketing targets people who cannot afford any repayment plan.
FAQ: How should someone use a subprime card so they can rebuild their credit score safely?
You should use a subprime card to rebuild safely by charging one predictable bill a month, paying in full before the statement cuts, and keeping utilization under 10 percent. Add a second small tradeline only after six clean months, set autopay to statement balance, and ask for a credit-line increase or a product upgrade after month nine to twelve.
FAQ: Do extreme examples like the 79.9 percent APR card prove the whole category is bad?
Extreme examples like the 79.9 percent APR card highlight the worst offers, not the entire market. That 2010 case tied to First Premier Bank became infamous, but many current subprime cards publish lower APRs and clearer fee tables. The move is to compare terms and refuse any offer that eats half the limit in setup fees.
FAQ: When is a secured card smarter than an unsecured subprime card?
A secured card is smarter than an unsecured subprime card when you can post a small deposit and avoid heavy setup fees. Your cash becomes the collateral, you still get monthly reporting, and many issuers review for graduation to unsecured after six to twelve on-time statements.
FAQ: How do lenders price risk in these portfolios and why does that matter?
Lenders price risk in these portfolios by pooling many high-risk accounts and covering expected write-offs with APRs, annual fees, and program charges. This matters to you because every percentage point you avoid in fees and interest shortens the time you need to stay in subprime before you graduate.
FAQ: What red flags should I watch for before I apply?
Red flags to watch for before you apply include large program or processing fees, monthly maintenance fees, credit limits under 300 dollars, foreign-transaction fees over 3 percent, and no path to a credit-line increase. If the combined first-year fees exceed 25 percent of the limit, keep shopping.
FAQ: Do interest-rate caps help borrowers in subprime tiers?
Interest-rate caps can lower headline rates but often reduce approvals for subprime and near-prime borrowers if lenders cannot price for losses. When access shrinks, people turn to costlier alternatives like weekly financing or rent-to-own, which raises the total cost of borrowing.
FAQ: How long does it take to move from subprime to prime?
Moving from subprime to prime typically takes 12 to 24 months of clean payments, low utilization, and two or three positive tradelines. Keep balances light, avoid new late payments, and request upgrades. Most scoring models reward recent behavior, so steady wins come faster than people think.
Disclaimer: The content on this blog is for informational and educational purposes only and does not constitute legal or financial advice. Watching our videos and reading our blogs does not create an attorney-client relationship. Always consult a licensed bankruptcy attorney or financial professional about your situation.
I sat down with Patrick Brenner to map the real credit landscape. We walked through five tiers from super prime down to deep subprime, why lenders treat each tier differently, and how policy ideas like interest caps can redraw the map. If you have clients rebuilding after a hit, or you are rebuilding yourself, knowing your tier tells you what to expect, what to watch, and how to move up.
FAQ: What are the five credit tiers and their typical FICO ranges?
The five credit tiers and their typical FICO ranges are super prime at roughly 760 to 850, prime at 680 to 759, near-prime at 620 to 679, subprime at 580 to 619, and deep subprime below 580. These bands are directional. Lenders still use their own cutoffs, but the pattern holds across markets.
Super prime advantages include lower pricing, richer rewards, easier prequalification, and wider product choice. Lenders compete for these borrowers, fees tend to be lower, and approval pipelines move faster, even though income and identity still have to be verified by law.
FAQ: What should prime borrowers expect if they slip?
Prime borrowers who slip can expect pricing to change and product terms to get tighter. A single late payment can move a profile from the top of prime toward the middle, which can reduce limits, bump rates, or swap a no-fee card for one with fees or thinner rewards.
Near-prime access is fragile because these borrowers are often recovering from shocks like medical bills, divorce, or a job loss, so any policy or pricing shift pushes them out first. When rules cap returns too tightly, lenders respond by shrinking approvals, which lands hardest on people who were about to climb back into prime.
FAQ: What happens to subprime borrowers when mainstream credit tightens?
When mainstream credit tightens, subprime borrowers still borrow, but they do it through costlier channels like buy-here-pay-here auto lots, weekly furniture financing, and fee-heavy services. The need is the same, the providers change, and the total cost of credit rises.
FAQ: What is deep subprime and why do lawmakers often miss it?
Deep subprime is the tier below 580 where access to banks and credit unions is scarce, and borrowing becomes a survival tool for broken tires, rent gaps, and utility shutoffs. Lawmakers often miss it because eliminating a product feels protective on paper while pushing people toward informal or illegal options in practice.
Secured cards fit into rebuilding by turning cash collateral into a small limit that reports like a normal revolving account. A $300 or $500 deposit becomes the line, on-time payments rebuild history, and after a clean streak many issuers graduate the account to unsecured.
FAQ: Do interest-rate caps help or hurt near-prime and below?
Interest-rate caps can help headline prices but often hurt access for near-prime and below, since lenders pull back when they cannot price for risk. Proposals like a national 10 percent cap that have been floated by figures such as Josh Hawley, Bernie Sanders, and Alexandria Ocasio-Cortez would likely concentrate credit among super prime and prime while approvals fade for everyone else.
FAQ: Can banks deny checking accounts and what data do they use?
Banks can deny checking accounts and they use specialty banking reports that log things like unpaid overdrafts or fraud flags. Similar to credit bureaus such as FICO scores in lending, these banking databases help institutions screen applications, which is why past account issues can block even basic services.
FAQ: How do you climb from a lower tier to a higher one?
You climb from a lower tier to a higher one by building clean, recent history that outweighs the past. Start with a secured card, keep utilization low, pay on time, add a second and third tradeline over time, and let six to twelve on-time months compound. Many filers and heavy-hit profiles can reach the 700s within 12 to 24 months of disciplined use and low balances.
Disclaimer: The content on this blog is for informational and educational purposes only and does not constitute legal or financial advice. Watching our videos and reading our blogs does not create an attorney-client relationship. Always consult a licensed bankruptcy attorney or financial professional about your situation.
In this week’s episode of the 720 Credit Score podcast, I spoke with Matt Komos about what could trigger the next credit crunch in 2026. We covered underpriced credit, wage stagnation against rising costs, the surge in revolving balances since pre-COVID, auto delinquencies, and how BNPL, AI underwriting, and alternative data are shifting risk around the board. The headline is simple. If incomes trail expenses and lenders tighten at the same time, stress moves up the credit spectrum. The question is how far and how fast.
FAQ: What signals point to rising credit risk in 2026?
Revolving debt has climbed roughly 30 percent from pre-COVID while wages have not kept pace. Student loan payments have resumed and federal garnishment can supersede some state limits. Auto delinquencies at 60 days past due are at multi-decade highs for subprime, and early signs of stress are appearing in near-prime and prime segments. Put together, those are classic pressure markers.
FAQ: How does underpriced credit create a problem?
If pricing does not reflect true default risk, lenders extend more credit than performance will support when the cycle turns. As the labor market softens and costs stay high, loss rates catch up to the mispricing. That forces lenders to tighten lines, raise cutoffs, and pull back offers, which then removes the very liquidity households were using to bridge shortfalls.
BNPL lets consumers split purchases without traditional underwriting or comprehensive bureau reporting. Higher-income households often use it for convenience. Stretched households use it to augment income between paychecks. When budgets break, payments that are not fully reported can slide behind autos, housing, and cards, and the hidden stress appears later.
FAQ: Are lenders asleep at the wheel or adjusting in time?
Lenders are adjusting. Tightening is already visible on cards and personal loans, alongside portfolio reviews. Alternative data and AI models are being used to monitor early warning signals and trim exposure at the margins. Growth continues for the safest tiers, with pullbacks from the bottom up.
FAQ: What does tightening look like for consumers?
Expect lower credit limits, more denials at the edge of eligibility, and fewer balance-transfer or promo offers. Installment originations slow even as balances remain high. More frequent account reviews can reduce lines after a late payment or a score drop. The squeeze usually shows up first in near-prime.
Vehicles became more expensive to buy, finance, insure, and maintain. Longer loan terms kept payments manageable on paper but left borrowers underwater for years. When budgets crack, a repair plus a high payment is hard to carry. Rising 60-day delinquencies signal households are running out of slack.
FAQ: Will AI underwriting and alternative data prevent a crisis?
They help lenders sort applicants faster and spot trouble sooner, but they do not raise wages or lower prices. These tools reduce mispricing and improve monitoring, yet they cannot fix a broad income-expense gap. Expect targeted tightening, not cycle elimination.
FAQ: What is the realistic 2026 scenario and the chance of a full retreat?
Base case is rising delinquencies through 2026 with tightening from the bottom up. Super-prime and strong prime continue to receive credit while losses are managed conservatively. The estimated probability of a full credit shutdown is under 10 percent. A squeeze is far more likely than a freeze.
FAQ: What should households do if credit tightens?
Protect housing and mobility first. Build a small emergency buffer, even if it starts tiny. Avoid stacking BNPL obligations. If balances are slipping out of control, get advice early from a nonprofit counselor and a local bankruptcy attorney before missed payments cascade.
FAQ: What should policymakers and lenders watch most closely?
Watch labor market breadth, wage growth versus core costs, revolving utilization, early-stage delinquencies, and auto roll rates. Track BNPL performance as reporting expands. If these trend the wrong way together, expect sharper tightening and faster credit migration.
Disclaimer: The content on this blog is for informational and educational purposes only and does not constitute legal or financial advice. Watching our videos and reading our blogs does not create an attorney-client relationship. Always consult a licensed bankruptcy attorney or financial professional about your situation.
If you’ve been turned down before, it’s easy to assume subprime lenders are staring at one number and calling it a day. They aren’t. In this conversation with Patrick Brenner of the Southwest Public Policy Institute, we walk through how approvals really work. Spoiler: your story is bigger than your score.
Modern lenders blend bureau data with forward-looking signals. That means your rent, phone, utilities, subscription history, cash flow, and employment stability can tip an approval your way. Structure those signals before you apply and you’ll stack the deck in your favor.
FAQ: How do subprime lenders actually decide approvals?
They combine traditional bureau data with enriched signals that predict near-term repayment, such as verified utilities and telecom, subscriptions, bank account cash flow, and employment stability. The decision is a holistic risk call, not a single-number verdict.
No. Scores are backward-looking snapshots. Subprime issuers weigh behavior they can verify today and trends that indicate momentum, not just past mistakes.
It is data beyond the big three bureaus’ traditional tradelines, such as on-time phone and utility payments, streaming or other subscriptions, bank deposit and spending patterns, and job tenure. These signals help model real-world stability.
OneScore blends bureau data with verified utility, telecom, subscription, cash-flow, and employment signals to create a forward-looking risk view. It is lender-facing, so consumers generally cannot pull it directly.
Put your name on rent, utilities, and key subscriptions, pay them on time, maintain stable income documentation, and make sure your bank account shows consistent positive cash flow.
FAQ: Why do different lenders give different decisions?
Risk models and tolerances differ. One issuer may say yes based on your cash-flow and utility history while another says no due to stricter thresholds.
Enriched data becomes crucial. Build verifiable signals first by getting named on utilities and rent, keeping clean bank cash flow, and using reputable matchmakers to target products designed for thin files.
Yes, but be deliberate. Adjust your signals, use a reputable matcher, and space applications. The potential benefit of a successful approval typically outweighs a single declination.
In this video, Patrick Brenner of the Southwest Public Policy Institute explains how subprime and deep-subprime credit card issuers set initial credit limits, \and why approvals like $200 or $500 are often less meaningful than consumers think. We break down how credit limits function as risk-control tools, what lenders monitor during the first six months after approval, and how utilization, payment behavior, and early performance influence limit increases, freezes, or account stagnation.
Patrick also explains why an initial credit limit is not a judgment of your worth or long-term credit potential. If you’re rebuilding credit, have a thin or damaged credit file, or are trying to graduate from subprime cards like Credit One or Merrick into mainstream credit, this discussion reveals lender logic that most consumers never hear … and helps explain what actually matters after approval.
FAQ: How do Credit One and Merrick pick the first limit?
They start small to cap loss exposure on new accounts with thin or damaged files. Until they observe how you use their card, they price for uncertainty, so $200 to $500 is common. It’s a business control, not a verdict on you.
FAQ: How low should my utilization be in the first six months?
Aim for about 20 percent statement utilization. If your limit is $200, try to have about $40 or less showing on the statement. The statement snapshot is what gets reported.
It helps only if it lowers the statement balance. Multiple payments are fine, but what the bureaus see is the balance on the statement date. Keep that number low.
Sometimes, but most issuers evaluate the full first six statements. Show six clean cycles of on-time payments and low utilization to maximize your odds.
FAQ: When and how should I ask for a higher limit?
After six clean months, request a review or wait for an automatic increase, such as Merrick’s Double Your Line. If you ask, point to on-time payments, low utilization, and stable income.
Graduate from subprime to mainstream within 12 to 24 months. Starter lines are a means to that end; your first limit is just the starting block, not the finish line.
I sat down with technologist Chris Smith to translate a buzzy idea into plain English: Should we build a second, blockchain-based score that doesn’t look like FICO at all. Here are three takeaways:
A blockchain reputation score would likely be permanent and hard to fix if it’s wrong, unlike FICO which is appealable and time-bound.
Tying scores to crypto wallets introduces KYC, AML, and privacy tradeoffs, and it’s technically tricky to bind a wallet to a single person.
Done well, on-chain reputation could widen access and reduce friction; done poorly, it risks a dystopian social score that punishes people forever.
Proponents say it could reflect real behavior on-chain and unlock faster decisions for credit, renting, and more. The catch is permanence. Blockchains are designed to be immutable, which means errors and identity mix-ups can stick like glue.
We covered how a wallet-based score might be tied to real people through know-your-customer checks, why multiple wallets and social engineering complicate trust, and the very real danger of turning a financial gauge into an all-purpose social rating. If this ever ships at scale, it needs strong safeguards, clear paths to correct errors, and limits on how it can be used.
FAQ: What is a blockchain reputation score and how is it different from FICO?
It’s a proposed scoring system that evaluates the history of a crypto wallet on public ledgers rather than your traditional credit files. Unlike FICO, it could factor on-chain activity such as repayments, liquidations, and interactions with risky contracts. The big difference is governance and reversibility. Credit bureaus must handle disputes and purge old negatives over time. An on-chain score could be governed by private protocols and might not age off or be easily appealed.
FAQ: Why does immutability make a blockchain score risky?
Blockchains are designed so records can’t be altered after the fact. That’s great for audit trails, but brutal for human error. If a bad data feed, mistaken identity, or fraud tags your wallet, the error can propagate everywhere and be hard to unwind. You don’t want a life-altering score that is wrong and permanent.
FAQ: What is KYC and why would it be required here?
KYC stands for know your customer. It verifies identity to reduce money laundering and fraud. For a wallet-based score to matter in the real world, lenders will want assurance that a wallet actually belongs to you. That means KYC at account creation and likely ongoing checks to confirm the same person controls the wallet over time.
FAQ: Can someone just open a new wallet to escape a bad score?
People can create new wallets, and there are multiple chains and wallet types. That’s why proponents pair KYC with reputation that follows a verified wallet. Without binding identity, a score is easy to dodge and easy to sell. With binding, privacy and safety concerns rise, so the design has to balance both.
FAQ: How would a wallet-based score be tied to a real person?
In theory through government- or platform-issued wallets, identity verification at setup, and device or biometric checks that confirm ongoing control. This linkage is what makes the score usable for loans or rentals, but it also raises risks if credentials are stolen or if authorities overreach.
Public chains are transparent. Anyone with a wallet address can view its transaction history. The identity behind an address isn’t public by default, but once linked through KYC, exchange records, or off-chain clues, activity becomes highly traceable. This transparency helps catch crime, but it also means a reputation score could expose too much.
FAQ: Could a government or company misuse a permanent score?
Yes. A permanent, unappealable score invites mission creep, from financial gatekeeping to social penalties. History shows systems drift from narrow use to broad control unless strong limits are written into policy and code. Guardrails are non-negotiable.
FAQ: What protections would make a system like this safer?
Clear, narrow scopes for use; independent oversight; mandatory appeal and correction processes; audit logs; caps on how non-financial data can influence scores; and strong security like hardware keys, biometrics, and multi-factor authentication. People need due process and the right to recover from mistakes.
FAQ: What happens if the blockchain records something false about me?
You would need an off-chain dispute and adjudication process with the power to quarantine tainted data, publish corrective attestations, and force downstream systems to honor corrections. Without a reliable fix path, the system shouldn’t be used to decide access to housing, employment, or essential services.
FAQ: Is a blockchain score coming soon, or is it still far off?
Pieces exist today, but a fair, appealable, consumer-safe system is not imminent. Expect pilots, niche products, and lots of debate. Until due process, identity security, and error correction are solved, the traditional credit ecosystem remains the default.
In this episode of the 720 Credit Score podcast, consumer attorney Joshua Cohen breaks down what the new federal bill changes for student loans. You will see what died, what survived, and what is coming next, plus clear steps to avoid default, garnishment, and surprise tax refund seizures.
The repayment plans that died are PAYE and ICR, which will sunset in July 2028, and SAVE, which is already dead due to a prior lawsuit. If you are enrolled in PAYE or ICR, you will be migrated to a surviving plan when they sunset.
The practical takeaway is that borrowers should prepare for a transition away from PAYE and ICR while monitoring communications from their servicer about timing and next steps.
The plan that survived is IBR, income-based repayment, along with existing progress toward forgiveness under that plan. Your accrued qualifying time toward IBR forgiveness continues to count.
This preserves a stable option for borrowers who need income-driven payments based on earnings and family size.
IBR is an income-driven repayment plan that sets your monthly payment based on your gross income and family size. Payments can be very low and can be as low as zero when income is limited.
For most borrowers who cannot afford standard payments, IBR remains the baseline option to keep loans current and protect against default.
RAP is the new Repayment Assistance Program that the bill created, and it is expected to launch in early 2026 and must be available by July 2026. RAP adds a minimum payment of 10 dollars per month and uses tax dependents to determine family size.
Borrowers will be able to choose between IBR and RAP once RAP goes live, which means running the numbers to see which plan lowers lifetime cost.
FAQ: How does RAP handle interest and principal differently?
RAP handles unpaid interest by waiving any interest that your payment does not cover, which stops balances from growing through negative amortization. RAP also adds a principal boost when needed.
If you do not pay at least $50 in principal in a month, the government contributes $50 toward principal, which equals $600 per year and helps balances move downward.
FAQ: How long until forgiveness under IBR versus RAP?
Forgiveness under IBR arrives after 25 years, while forgiveness under RAP arrives after 30 years. That five year difference can change your optimal plan choice.
Borrowers should compare expected payments, interest handling, and forgiveness timelines to decide whether RAP’s balance protections outweigh the longer path to forgiveness.
FAQ: How will family size be counted under RAP for noncustodial parents?
Family size under RAP is based on your tax return and only counts people you claim as dependents. If you are a noncustodial parent and do not claim your child, RAP will not include that child in your family size.
This rule can increase your monthly payment under RAP compared to IBR if you rely on household size that is not reflected on your tax return.
FAQ: What happens to borrowers in PAYE or ICR as we approach July 2028?
Borrowers in PAYE or ICR will be funneled into a surviving plan when those plans sunset in July 2028. You will receive instructions from your servicer about the migration path.
To avoid surprise changes, review your account annually and be ready to pick between IBR and RAP when RAP is available.
FAQ: What happens if I default now that payments have resumed?
If you default, federal law allows administrative wage garnishment after a 30 day warning letter, typically up to 15 percent of pay after taxes and health insurance. Federal refunds can also be intercepted.
The most reliable way to avoid default is to enroll in an income-driven plan immediately, which can set payments as low as zero under IBR or 10 dollars under RAP once it launches.
FAQ: Can Social Security be garnished for federal student loans?
Social Security can be garnished up to 15 percent for defaulted federal student loans. The program must leave a protected amount equal to 30 times the federal minimum wage.
This makes prevention more important for seniors and disability recipients, who should enroll in income-driven repayment to avoid default-triggered garnishment.
FAQ: If I cannot afford payments, should I enroll in an income-driven plan?
If you cannot afford standard payments, you should enroll in an income-driven plan because it can reduce your payment to a manageable level and prevent default. IBR is available now, and RAP will add another option in 2026.
Enrollment protects you from garnishment and tax refund seizure and keeps forgiveness on track.
In this conversation, I sat down with student loan attorney Josh Cohen to talk through how student loans really affect your credit score. We walked through how credit scores treat student loans compared to credit cards, why lenders zoom in on the monthly payment instead of the total balance, and how income driven repayment can bring payments down to something you can actually live with.
Josh explained one point that surprised a lot of people, including me the first time I heard it: a zero dollar income driven payment still counts as an on time payment, as long as you are properly enrolled in the plan. He also broke down why forbearance can create problems when you go to buy a car or a house, and why your report might show eight different student loan tradelines for a single degree.
We finished by talking about consolidation, late payments, and how to think strategically if you are trying to protect your score while you tackle your loans.
FAQ: How do student loans affect my credit score compared to other debts?
From a scoring perspective, student loans are treated like other installment loans such as mortgages or auto loans. Utilization works differently than credit cards. What matters most is whether you pay on time, how long the accounts have existed, and whether there are serious late payments or defaults.
Simply having student loans does not hurt your score. Missed payments do.
FAQ: Does my total student loan balance matter, or do lenders care more about the monthly payment?
Lenders focus more on your required monthly payment than the total balance. They use the payment amount to calculate your debt-to-income ratio.
Income driven repayment can lower your required payment, which improves your ability to qualify for a mortgage or auto loan even if your total balance is high.
FAQ: What is income driven repayment, and how does it affect my credit score?
Income driven repayment (IDR) bases your payment on income and household size rather than a fixed 10-year schedule. If you qualify, your required payment may be much lower.
As long as you make the required payment under the plan, your loans continue to report as current and on time. Being on IDR does not hurt your credit score.
FAQ: What is the difference between income driven repayment and forbearance for my credit and future approvals?
Income driven repayment shows active, on-time payments and builds positive history. Forbearance pauses payments but signals uncertainty to lenders.
Lenders often view forbearance as higher risk because they cannot tell what your future payment will be. IDR, by contrast, provides a clear and documented payment obligation.
FAQ: Do student loans keep accruing interest on income driven plans and in forbearance?
In most cases, interest continues to accrue under both income driven repayment and forbearance unless a temporary subsidy applies.
Even if balances grow, IDR still offers real value by keeping payments affordable, maintaining on-time history, and progressing toward forgiveness when applicable.
FAQ: Should I consolidate my federal student loans, and how does that change my credit report?
Federal Direct Consolidation combines multiple eligible loans into one new loan. Your total balance stays the same, but reporting becomes cleaner with a single tradeline.
This can simplify management, though it creates a new account and may slightly affect account age. Consolidation decisions should be based on repayment and forgiveness goals.
FAQ: How can multiple student loan tradelines hurt or help when I am paying down debt?
Multiple tradelines can amplify mistakes. One missed payment may appear multiple times if several loans are past due.
On the upside, paying loans down one by one can show visible progress as accounts close. The most important factor in either case is protecting your on-time payment history.
In this episode, I talk with Matt Komos of OGMA Risk and Analytics about why Credit Karma, FICO 10, and VantageScore 4 can show very different numbers on the same day. We unpack model versions, bureau data gaps, lender choices, and how trended data in newer scores changes the game. If you have ever seen three scores that do not match, this conversation explains why and what to do next.
FAQ: Why are my Credit Karma and lender scores different?
They are different because Credit Karma typically shows a VantageScore, while many lenders use a FICO version, and each model weighs data differently and may come from different bureaus. The model version the lender selects can also be older or newer than the one you see online, which shifts the number even if nothing in your file changed.
Think of consumer scores as directional and educational. Use them for trend lines. For decisions, plan around the specific score your lender uses and the data in your reports.
FAQ: What are FICO 10 and VantageScore 4, and why do they matter?
FICO 10 and VantageScore 4 are newer model generations that incorporate more recent data science and, in some cases, trended data. They often predict risk better for lenders, which is why you may see a different result when a bank upgrades from an older version.
When models improve, cutoffs and sensitivity can change. That can help or hurt depending on your recent behavior, utilization patterns, and account mix.
FAQ: Which score actually matters when I apply for credit?
The score that matters is the one your lender pulls for that product on that day. Different lenders choose different models and versions based on their portfolio results.
Before a major application, ask which model and bureau they use. Then check that specific report and focus your prep there.
FAQ: Are FICO and VantageScore on different scales?
Yes, FICO commonly tops out at 850 and many VantageScore versions top out at 850 or 900 depending on version. You cannot convert a 750 FICO to a VantageScore equivalent, and companies are not allowed to provide a direct conversion.
Treat each score within its own scale. Do not translate between brands or versions.
FAQ: Can a lender use a custom score I cannot see?
Yes, many lenders build custom scores using bureau data, cash flow, or other signals. These scores are tailored to their applicant base and are not available to consumers.
If a denial cites an internal score, focus on the adverse action reasons. Those reasons tell you what to improve, even if the number itself is opaque.
FAQ: Why do my three bureau scores differ on the same day?
They differ because the underlying reports can be different. A creditor might report to one or two bureaus but not all three, or report on different schedules. Missing or stale data changes the input, which changes the score.
Start by aligning the data. Pull all three reports and fix errors or gaps so each bureau reflects the same information.
FAQ: How can I preview the score that will be used for my application?
The best preview is to ask the lender which model and bureau they use, then obtain that bureau’s report and score near the time you apply. AnnualCreditReport gives free report access and many banks let you view a FICO tied to a specific bureau.
If you cannot get that exact score, use your consumer score for trends and focus on the known drivers like utilization, on time history, and recent inquiries.
FAQ: What is trended data and why do newer scores use it?
Trended data looks at your patterns over time, such as whether balances are rising or falling and how you manage revolving credit month to month. FICO 10T and VantageScore 4 use trended data to reward sustained positive behavior and to spot risk earlier.
This reduces the weight of a single snapshot and can produce more stable decisions, especially if you have been steadily improving.
FAQ: If I get denied, should I take it personally or try another lender?
You should view a denial as feedback on that lender’s model and risk appetite, not as a verdict on your worth. Another lender using a different model or cutoffs may approve the same profile.
Use the adverse action reasons to tune your next move. Lower utilization, clean up errors, and try a lender that uses a score aligned to your strengths.
FAQ: What one rule would make credit scoring fairer for consumers?
A rule that requires equal data reporting to all three bureaus would make scoring fairer. Uneven reporting creates differences that consumers cannot see or control.
Level data plus modern trended models would bring scores closer together and reduce surprises at the point of credit.
FAQ: What is the simplest way to improve across all scoring models?
The simplest way is to attack the shared drivers. Pay on time every month, keep revolving utilization low, avoid unnecessary new accounts, and let positive history age.
These habits move most models in the right direction. Pair them with regular three bureau checks so data stays accurate and complete.
I was so alone going thru bankruptcy and Phillip made me feel better. He felt my pain in a genuine manner and helped me tremendously!! I must admit I did falter a little a year ago but am back on track and my credit score is getting into the 700's. They are a great bunch....Phillip is wonderful. I recommend them highly.
I have awesome way to help with your credit score with Philip helping you. He a great speaker on it. He will do his best for your needs on your credit score
Here is my Story : In 2009 I was late on my mortgage and over 50K in debt . My home was foreclosed on . I hung on trying to make payments on the cc debt to no avail. Over the next few years, I tried myself and also lost hundreds of dollars on companies that claimed to be able to clean up my credit they were no help at all . In 2012 , my wages were being garnished and I was getting calls and letters from collectors daily . I finally declared bankruptcy , my lawyer included membership in 720 Credit Score course. I followed it to the letter. I am now 10 yrs out and my current credit score is 750 + consistently , I have not had a late payment on a card or loan , I own my own home and 2 rental properties . My credit utilization is under 7% monthly and I have 6 months of emergency funds in the bank. My mortgage is under 3% and I bought a new car last year with 0% financing for 5 yearsPlease take this course it is the best thing you can do for yourself and your finances !!!!Thank you Mr.Tirone and 720CreditScore. com
Awesomeness Program this has been the best of best decision l made to finally live the pursuit of happiness to towards better credit in the world, with excellence towards supporting help that' will come with great support from 720CreditScore.com.Thank you!Belinda
This program helped me tremendously. After my bankruptcy was discharged, my attorney recommended and referred me to the program to get me started on the road to recovery after bankruptcy. I followed all the steps in the program and it’s not only helped my credit improve, but I’ve learned a lot about credit itself. It’s only been 8 months since my discharge, but my credit score has gone from 640 to 725 by following this program. I recommend this program to everyone, from those who went through bankruptcy to anyone who needs a lesson in credit management. Excellent program.
I truly am grateful to the program it has educated me on areas of credit I was not aware of in my 50 years of living. I would definitely recommend it to others to educate, and refresh others about credit worthiness.
From the start, every contact was perfect, never put on hold, spoke with a very knowledgeable representative, they kept everything that is very intimidating to me very easy assuring me that it'll be ok. The app was so easy it was bullet proof.
The things I have learned with this program have helped emensely! I raised my husband's credit score 87 points in less than 3 months and it just keeps going up. I have raised mine 70 points in the same amount of time. I have learned so much, and I'm so grateful! I highly recommend for anyone who is starting over, starting out, or just needs to learn the process of credit scores!
Awsome road map to building an excellent credit profile. I have been implementing the steps and following the advice and recently had my score go up 80 points !! I'm not done yet . I'm still on the the road map. It's easy to follow because it's all mapped out for you and it really works. You just need to be committed and stay the coarse . Thank you
If you really want to rebuild your credit with an easy steps to take that are actionable and deliver results, I highly recommend 720 Creditscore. It has transformed our lives, from cars, homes and all types of indirect savings by building a good credit score!
Excellent program, and if you know of anyone wanting to improve their credit score and get educated 720 is the place to go. Philip is very professional, caring and knowledgeable. Quick and efficient customer service and you get your money's worth. Highly recommend.
I like the way 720CreditScore works with me. They are kind and always have an open mind. Watching the zoom classes has giving me an "Up Beat" feeling. I have learned so much listening to other people who have or going through what I have. The introduction site got me starting to look at the way I use my money. Great lessons. Thank you so much.Elaine Gilmore
After my bankruptcy was discharged, my lawyer included this amazing service to follow up with after and I’ve learned so much! I truly wish I knew about this service 10+ years ago! I’m already doing much better financially, thanks to this program and my credit score literally jumped 56 points within the first month. Highly recommend it!
Since, I've been in the program my score has gone up to over 700 in the last 12 months. I am very excited to continue working towards my goal of rebuilding my credit. Thanks to 720creditscore there's a light at the end of the tunnel.
I have been busy working a lot because my rent went up. Although I can't thank my Lawyer Mr. Goff enough for not just helping me out but being understanding also. Nothing wrong with starting over. Thanks a million Mr. Goff
