Ask Dr. Don
By Don Taylor, Ph.D., CFA • Bankrate.com
Today, Dr. Don discusses the dangers
of undelivered checks and raising your FICO score.
Undelivered checks
Dear Dr. Don,
My husband and I opened a checking account and bought checks through
the bank in January and never received any checks from them. Who's
liable for the missing checks? Should we close our account and change
banks, or just close this account and start again with this bank?
Confused Consumer
Dear Confused,
It's unlikely that your money is at risk from the undelivered checks,
especially if the account has been open since January and you haven't
seen any fraudulent activity reported in your monthly statements.
If your bank charged you for the checks and you never received them,
the burden is on the bank to provide you with new checks. They should
be able to block the numbers associated with the earlier shipment,
without charging you for this service, and you won't have to go
through the bother of opening a new account. Talk to your branch
manager, I'm sure she'll sort out this problem for you.
Raising your FICO score
Dear Dr. Don,
Is it possible to raise a FICO score by 60 points in six months'
time? Conversely, what could make a FICO score drop by 60 points
over six months' time when there hasn't been a noticeable change
in your credit report? For example, I have no late payments and
after reviewing two credit reports six months apart, I see no difference
between the two reports. Why the difference in the FICO scores?
Harry Handicapper
Dear Harry,
Credit reports are inputs in a credit-scoring model developed by
Fair,
Isaac & Co. The model's output is called a FICO score.
Credit bureaus use Fair Isaac models to present the lender with
a FICO score that the lender then uses as information in determining
whether they will extend credit. The FICO score will also influence
the interest rate on the loan. It's unlikely that your credit report
is identical over the six-month period, with the most likely change
being the outstanding balances on your credit lines. In fact, the
passage of time without a late payment could account for additional
points in a FICO score.
Lenders have historically taken the position
that FICO scores were not for release to consumers. Consumers would
occasionally learn their FICO scores from the lender but they were
not entitled to that information. There's been a consumer revolution
over the past six months concerning the release of FICO scores.
Fair Isaac's Web site now delineates the factors in the model and
discusses how they comprise a FICO score. They plan to start releasing
FICO scores to consumers in the near future. Pat
Curry's recent article on this topic reviews the controversy
and discusses future availability of these scores.
Bankrate.com writers base
their answers on our editorial content and advice of financial professionals.
We make no claims or representations about the accuracy, timeliness or completeness
of such content, advice or the answers provided to you. Our content, advice
and answers are intended only to assist you with your financial decisions. However,
by its nature such information is broad in scope. Your financial situation is
unique, and our content, advice and answers may not be appropriate for your
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final decisions or implementing any financial or investment strategy.
-- Posted: July 24, 2000
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