This month, we get an insider’s look at credit from a true insider. John Ulzheimer is a nationally recognized expert on credit reporting, credit scoring and identity theft. He is the President of The Ulzheimer Group and founder of CreditExpertWitness.com. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry and has served the industry for more than 28 years. John has been quoted and published in major media outlets nationwide, and even lends his voice as a featured writer to print and online articles…including VantageScore’s monthly newsletter – The Score. We are thrilled to spotlight John in our “5 Questions” feature this month.

What are the biggest changes you’ve seen in the credit scoring and reporting industry in the past few years?

The inclusion of trended data several years ago was a monumental improvement to credit reporting. It changed what some believed to be a “flat” credit report into a deep credit report because the story it told was more about how you’ve managed accounts over the last 24 months, not just how you managed it since last month. It wasn’t really much of a surprise that the trended data was so empirically valuable that it eventually made its way into credit bureau based scoring systems.

Another meaningful change to credit reporting was a move away from only including financial services data. Now it’s not uncommon to see utilities, pay TV, cable, rental, and other non-banking data on credit reports, most of it added by consumers themselves. This clearly gives a more complete picture of a consumer’s inventory of monthly obligations.

And because all contemporary scoring systems consider this type of data, consumers stand to benefit where in the past they would not have.

What’s the one consumer education question you continually get?

Well, the most common questions I get are about how to get negative information removed from credit reports and how to improve credit scores. I rarely get those types of questions from people who have scores in the 700s or higher, which makes perfect sense. But the fact that I keep getting those two questions underscores just how important credit scores remain and how engaged people have become in their own credit reports and scores.

How do you help consumers navigate credit scoring when there are so many different models?

This can be a little like trying to herd cats, which is impossible. As such, I don’t tackle it from a credit scoring perspective. I tackle it from a credit reporting perspective. The number of credit scores that we all have is a number that has never been accurately quantified because it’s so large and ever-changing. We also tend to only focus on the credit bureau based risk scores, and rightly so. Those are the scores that are the most “front and center” when we apply for credit. What nobody ever sees is the massive number of custom and non-risk scores that are used by lenders, insurance companies, debt collectors, and almost every other entity that has to assess risk and other customer/applicant attributes. So, it doesn’t make practical sense to try to manage to all of these scores, but it certainly makes a lot of sense to manage to your reports.

You only have three commonly utilized credit reports and the credit reporting industry has done a fantastic job of making them almost constantly available to consumers. All of your credit scores are based exclusively on this data. And, many of the custom and non-risk scores are also either based on credit report data or are otherwise influenced by scores that are based on credit report data…kind of a score within a score set up. I try to break it down like this…if you can avoid having anything negative hit your credit reports, avoid ever having too much credit card debt, and avoid excessively shopping for credit then your credit scores are always going to be great. If you can do this constantly, lather rinse repeat, then over time as your credit reports age your scores are going to get even better. Then at some point in your life you’ll eventually get to a point where having an 835 credit score is a disappointment, because it’s normally closer to 850.

You’ve worked both at Equifax and FICO are well known to be one of the foremost experts in our industry, but what did you intend to do after college?

How much space in your newsletter do you have for this one? This could take a few pages to answer completely. I wanted to work for the FBI after college. I kind of still do, but that ship has probably sailed…but if they ever come knocking I’ll most certainly answer the door. I’m a crime junkie. Always have been. I consume crime documentaries as quickly as they’re released. When I graduated in 1991 the job market in Georgia was terrible. And, of course, that predated the Internet so no way to search for jobs other than the newspaper help-wanted ads. I had driven past the old Equifax headquarters for decades and always wondered what they were and what they did. So, when I started mailing out resumes (yes, via U.S. mail) I made sure to include them in the stack of almost 500 letters. Thankfully they called me, and the rest is history as I’ve now been in the credit industry for just shy of three decades. In a way my obsessive interest in criminal justice is the same as it is for credit. I love credit, always have. It’s not hard to be good at something you enjoy. I almost don’t think of it as work because of how much I enjoy it. People ask me when I’m going to retire and I always answer the same way, “Why in the world would I choose to stop doing something I love to do?”

What’s the best piece of financial advice you will give to your son?

My son is so much smarter at his age than I was at the same age. Not even close, and I’m not saying that because he’s my son. The amount of information available to him at his age relative to me when I was his age isn’t even comparable. He’s already interested in investing and setting up retirement accounts, and he’s not even in high school yet. I treat credit “parenting”, if that’s even a thing, the same way I’m going to teach him how to drive. Controlled environment, allow him to screw up with a safety net, and plenty of experience. “Start early” is something he’s heard me say 1,000 times. Start early saving, investing, and building good credit. I put my money where my mouth is in that respect.

My 3rd book about credit draws a comparison between having excellent credit and making the right choice of stocks or mutual funds as it pertains to wealth building. If you pay less for stuff you know you’re going to finance then that’s the same as picking the right stock. These are the things we talk about. I’m also going to try to convince him to never co-sign for anyone else!5 QUESTIONS with Credit Expert John Ulzheimer