Credit scoring

[angrychair]

I know it seems tenuous but I see credit scoring as opaque and insidious as how trading works with shorting and other more unique trading instruments.

To my point there are these commercials from Experian, one of the "Big Three", that talk about "Experian boost" which raises your credit score but a completely opaque formula by a trivial amount of points and now they are saying that if you pay for Netflix or Hulu through them it will raise you score even more.

So a "hard" credit check can lower my score by a random amount but getting Netflix can raise it?


These type of things just highlight for me the absurdity of credit scoring that has been given such significant control of our ability to do everything from get a car to get a job in some cases.
In short the whole thing is arbitrary and capricious.

[msongs]

1. and they use your data to make $$ but don't give u a cut of the income nt

[handmade34]

2. so agree and

have been saying this since the advent of "credit scores"

...and I have an "excellent" credit score but does me no good

[DonaldsRump]

3. I tried the "credit boost"

Totally useless for me.

[mr_lebowski]

4. I don't think hardly anyone out there checking credit gives two craps about your

Experian 'Boost' score, which I think is kinda unfortunate for some people.

Way it works is by scanning your bank account for utility-type payments ... Electric, City, Cable company, and Cell Phone, and sees whether you make these payments every month. You literally have to give them permission to go into your bank account and comb it with their system.

Sounds like they've just added some more types of businesses to the algorithm like Netflix and Hulu, which are also monthly accounts of a roughly 'utility' type nature. I suppose it makes some sense.

Mainly it's useful for people who don't have much 'real' credit but do pay their bills on time every month otherwise. I kinda think it's a good 'thing' and think all the companies should offer it, and creditors should 'care' i.e. take this sort of responsible spending behavior into account.

[DonaldsRump]

6. I agree that, if it can help folks, it's good

However, the advertising suggests it's basically a guaranty you will get the boost. I gave access to a bank account and a credit card, and I feel foolish for doing so.

My credit is fine, but the impression was conveyed that if you do the "boost", you'll get a boost. No joy for me.

[mr_lebowski]

7. It hurt my score too, which was already pretty good ...

It apparently found SOMETHING it didn't think was good. I think one month I'd paid my utility bill really late cause I forgot ... but that would've been the only thing out of dozens of perfectly made payments on all kinds of stuff.

So I just removed it and turned off the connection to my bank. Oh well.

[DonaldsRump]

9. That is awful!

I cannot believe it downgraded you. I don't have the advertisement in front of me, but I think Experian is being HIGHLY misleading. I was ticked off that it didn't RAISE my score. Had it LOWERED my score, I would have gone ballistic.

I'll check the advertising this weekend to make sure I'm not off base in calling it deceptive.

[mr_lebowski]

20. You can choose to use what Boost comes up with or not ...

I really don't think many actual creditors give two shits what experian boost comes up with, good or bad honestly.

[angrychair]

11. Sorry credit scoring is crap

To have a "good" credit score you literally have to have debt.

Yes, its a actual debt to income ratio but also potential, unrealized, debt like only using $1000 of a credit card with a $10,000 credit limit.

But its also student loan debt. Payment history of existing loans. And other factors like age and employment history.

Its ridiculous that we've tied so many facets of modern life to this score.
I mean a person making $100,000 a year with no debt but a cold credit history could be refused a car purchase because of that.
Literally not get certain jobs, especially "positions of trust" or requiring a security clearance, because you either don't have a credit score or to low a credit score.

[ResistantAmerican17]

5. Wasn't Suze Orman, that financial guru who pushed FICO scores

alleged to have been getting paid by FICO???

[Miigwech]

8. So crazy ... when you are not in debt to anyone because you own sustantial

capital, land, etc. and you pay your bills and have planned out your retirement and you get a low credit score because you show no debt !!!!! ... how the eff does that make sense? When you go to get car insurance or home owners insurance they hold that against you to raise your rates? This is total corp BS !!!! DEBT is not that great ... the donald showed America that ... the king of fatfuvkofdebtestan ... just made that up , LOL

[brooklynite]

10. Did you pay 100% cash for your home?

If not, then credit is a valuable tool, and the mortgage holder wants to know about your ability to pay off bills over time.

[Miigwech]

13. Cash for everything ... old school ...

for big purchases, get a family group. That's the old way. But the banks want to punish the frugal ... "SAME AS IT EVER WAS" .... force everyone into debt ...

[Mike 03]

14. I'm just trying to understand this, because other than the fact I use credit cards (and

pay them off every month) I'm basically in the same boat as you are, but my credit scores are high and you are saying yours are lower.

Is it using the credit cards that is the difference?

Do you know if my score would be higher if I did NOT pay my credit card bills off entirely every month?

I don't understand what you have to do to have a perfect credit score.

I find the credit scoring thing difficult to understand.

Does having a mortgage actually give you a higher credit score?

[Miigwech]

16. In the State of Michigan, lower credit scores higher insurance costs

picking the pockets of the poor but sometimes it picks the pockets of the retired or the fiscally responsible taxpayers ... this system HAS TO END >>> MORE JIM CROW POLITICS

[Mike 03]

17. Yes, that sounds ridiculous.

[mr_lebowski]

21. To have good credit

1) Never fail to meet a monthly obligation, even if it's minimum payment
2) Have a lot of available revolving credit, but very small balances on each account. Only owing like 1% of your available credit is the best you can 'look'.
3) Have a variety of accounts you're paying on or have fairly recently paid off ... Mortgage, Car Payment, Bank Credit Card (like a Visa Debit), and Store card like Macy's.
4) Don't open new revolving accounts regularly (causing hard checks on credit and for your average age of account to become lower)
5) Age your accounts, the longer they're open, the better, and don't close accounts, just keep like $5 in debt on them.

That's pretty much all that matters in your score. Oh, and also significant pay-downs on installment loans ... helps. Owning 500 on your 10K car loan is slightly better than owing 9500 on your 10K car loan. Above and beyond just the age of the account, that ratio also matters. But it's pretty small.

You really don't have to have barely any debt to have good credit. Have a mortgage, a bank debit card, and a Macy's card, and owe like $5 on the latter two ... and if those accounts are all relatively old with no late payments, your credit will be very good.

[SWBTATTReg]

12. I love your rant, you're smart to avoid this kind of 'scam'...banks will perform a credit score ...

based upon their criteria. It may differ from company to company too. I don't own anyone anything, and won't after many years of being in debt to others, and now am basically my own bank...I encourage everyone to be their own bankers if they can be, save a little bit every week and before you know it, you have a balance built up that you can 'lend' to yourself. Be religious and pay yourself, and the bill (to yourself). Keep building up that savings too. Sure it may take years to do, but then, when it happens, and you can get rid of the credit cards, and those other lending sharks, you'll be proud and free, and that interest you're paying someone else? It's yours now (you're paying yourself).

[AirmensMom]

15. Our credit score went down 30 points

after we paid off the mortgage on our house.

We have no debt, finally, so we have no hope of bringing it back up. Sure, it's high enough to get a loan, which would raise it further as we made payments, but it just seems arbitrary and stupid. Maybe the thing saving us now is that we have Netflix on auto-pay. Who knows? Seems like you'd get some boost for actually paying off debts, but what do I know?

[Mike 03]

18. Oh, bingo...

Thanks, you've just answered a question I've had for years about mortgages and credit scores.

But I'm sorry it works like that. It's really ridiculous and counter-intuitive.

[Miigwech]

19. Sick of this control of us when we do the right thing!

The big banks ... they win either way. THEY LET HEDGE FUNDS BURROW MONEY OVER NIGHT AT NO INTEREST TO STRIP FUNDS FROM STOCK MARKETS!!!!!! THE MARKETS ARE RIGGED! THE INSURANCE MARKETS ARE RIGGED!

[okaawhatever]

22. Credit scores are based partly on average age of accounts, and types of accounts. As in, you

you should have both installment (car loan, mortgage etc.) and revolving (credit cards, home equity line of credit).

When you paid off your house your average age of accounts may have gone down since you probably had the mortgage for years. If it was your only installment loan that may have cost you points as well.

Credit scoring can be a game, just play it as best you can.

Couple of tips: have accounts and keep them open as long as you can. Find credit cards with no annual fee or cards that give you benefits worth more than the fee. iTarget & Lowes both give you 5% off every purchase with their cards and no annual fee. That can add up to decent savings.

Credit scoring programs don’t know anything about your finances (amount in savings, income, 401k, etc.) They score how well you handle the credit available to you. Low credit card balances to available credit, on time payments and such. If you don’t have credit they don’t have any info to assess. It’s unfortunate they don’t consider the big picture in a persons finances, but it is what it is.

[AirmensMom]

23. I realize that.

We had a perfect credit score for several months until we payed off the mortgage. And we could get a loan anywhere for anything if we chose to do so. That they mess with the scores doesn't materially hurt us. It's just annoying.

We used our Lowe's card to buy appliances, got the 24-month-no-interest deal, and our credit score went down. It didn't go up when we paid it off. Then it gradually started to inch up a little and we got a new phone plan. Dinged again.

Most of our purchase go on our Discover Card, which we pay off every single month. We have never paid a fee or interest to any card.

We have had credit for close to 50 years and have never paid late or defaulted. Surely they have that info. If not, they have no business judging anyone's credit-worthiness. We know our credit is excellent, they know it, and yet they like to fart around with the actual numbers.

[marlakay]

24. My score went down because we weren't

Using some credit cards with high limits so they lowered the limits.

We have perfect credit like you pay on time etc.

We still have small home loan so that helps.

Over the years I closed some accounts because we had too many, they didn't like that either but after awhile it goes back up.