Even People With Good Credit Are Penalized

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By now everyone is aware of the Vantage credit scoring system developed by the three major credit bureaus: Equifax, Experian and TransUnion. The system grades consumers on a scale of A-F. I have done extensive research, but have yet to find out how lenders will use this score, or which lenders will choose to use the Vantage score as opposed to the FICO score.

Will they be flexible in their analysis and look at the actual score or just look at the grade of A-F.? Unfortunately, no one knows for sure. For now, when applying for a loan, ask the lender which credit score they are using.

I recently refinanced my home and the lender used the FICO score. Well, I recently obtained a copy of my credit report and credit scores from the three major credit bureaus. I have not made any late payments in the past 10 years; therefore, I expected to get the highest credit score possible or at least very close to it. My scores were 760 and above.

When I ordered my Experian report I wanted to order a FICO score, yet I only had the option of getting a Vantage score. My Experian Vantage score was 819. To my surprise, all of these ridiculous reasons were given to explain why my credit scores were not higher:

1. Your report does not show real estate loans ? this was incorrect, I have had a mortgage for the past 7 years.

2. Your report shows that available credit across your open revolving accounts is too low ? I only have one credit card with a limit of $3,000. They are telling me that if I had more credit cards my score would be higher.

3. Your report shows that the ratio of balances to credit limits across your open revolving accounts is too high ? My balance on my credit card was approximately $900, which is only 30% of the credit limit - the suggested balance that consumers should have on their credit cards.

4. Your report shows that the time since your oldest revolving account is too short ?wrong. I have one revolving account, my credit card which I have had for the past 10 years.

5. Your report shows one or more inquiries on file ? I had one inquiry in June 2005. One inquiry in February 2006 and one in October 2006. Inquiries should be obtained no more than twice a year unless you are doing comparison shopping. I am being penalized because I had two inquiries within one year.

Well, needless to say, I wrote each credit bureau and disputed all the reasons they provided. I received two responses back and am waiting for the last response. After I receive it, I will order a copy of my credit report again to see if my scores have increased. I have struggled to find out how one obtains an 800 FICO credit score or higher. From the looks of things, it doesn't seem like an 800 is possible anymore because the credit bureaus will find ways to make sure your credit score is not as high as it can be.

I advise everyone, whether you have bad credit or good credit, to order a copy of your credit report once a year, read every single line on your credit report and read all of the information provided along with your credit report. Make sure everything listed on your credit report is accurate. Even a few points on your credit score can make the difference between getting approved or getting declined, and we all need those extra points. Good luck!

Harrine Freeman is the CEO of H.E. Freeman Enterprises, a credit repair and personal finance services company and author of "How to Get Out of Debt: Get an "A" Credit Rating for Free." Visit http://www.hefreemanenterprises.com.