OT: FICO Credit Score and Covid-19

Paying down your balances to near zero doesn't always improve your credit score part of your score is how many accounts you have paid as agreed.

Too much debt is clearly bad, but zero debt isn't considered "The best" either from their perspective - if you have zero revolving debt and aren't making anyone any money for a while they can't model your risk as well, y'know?

780-800 is an exceptional score most lenders consider just 720 or so to be effectively "perfect" for most purposes. Different lenders use different score versions for different purposes but with an 800 basically doing anything different than what you've been doing previously tends to hurt rather than help, like your score is already perfect what are you hoping for?

at the top of the range even minor mistakes whack very hard, if your score is in the mid 700s even a single missed monthly car payment will drop you 150 points easy.

Some sites have modeling-tools that you can play with sliders and see what happens in theory.

One of the ones I used (can't recall who the provider was) even had a box to select something like "miss X months of child-support payments", I don't have children much less child-support payments but I clicked it to "miss 3 months of child-support payments" and my hypothetical score went up 15 points.

I guess they figure I'd have more money to give them if i did that, sure!

These things probably vary greatly depending on where in the world you are.

Here in Norway, for a credit check (we don't have a points system like you describe) a credit card counts as credit for the entire credit limit, no matter how much of the credit you have actually used.

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RoRo

If you never borrow money, you don't need to worry about a credit score. I've never borrowed except for mortgages, and having no credit history didn't seem to affect getting a mortgage.

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John Larkin         Highland Technology, Inc 

Science teaches us to doubt. 

  Claude Bernard

That's mostly a valid point, and I'm not looking to re-fi.

But, some prospective employers like to check candidate credit scores, part icularly for filling senior management positions, so it's at least worth ke eping an eye on it. (Ditto for social media, so if SED qualifies, I will p robably have to learn how to grow sweet potatoes.) :)

I didn't mention it previously, but FICO-9 scores from 300-850. I have friends and colleagues consistently in the 790-810 range who frankly , I would consider more of a credit risk than myself (biased, as that opini on may be). But it just occurs to me that they are also about 10 years you nger than I am, so maybe age is a "sticky" factor in the model, or the extr a data points act as a smoothing filter on upward adjustment. (A total gue ss, BTW.)

I think some companies like to see a history of some sort, just to have some confidence you haven't popped into existence for the sole purpose of defrauding them.

I have the same attitude as you. My parents indicated there were two valid occasions for getting a loan: to buy a house or a cooker. Everything else waits until after the money is in your pocket.

I seriously hate the 80's "borrow you're worth it" attitude, and am glad I've persuaded my daughter not to borrow money.

So is she, now that covid has hit her hard (zero available government handouts).

this Coronavirus pandemic. Does anybody here believe strongly that those c redit scoring models are really up to the task?

t should have gone UP. I just made the last payment on a personal loan (ta ken out specifically to see if I could bump the score, as I don't really us e a lot of credit at this stage in life.) And, I paid down the balance on my two credit cards (which, typically don't carry much of a balance anyway, but I wanted to get them near zero to see what effect it has on FICO.) An swer appears to be "none", BTW.

check direct deposit (not sure bank account balances figures into FICO?). Unlike a lot of folks out there, I'm not dipping into reserves in order to survive.

f a scam? Maybe not in the "big picture" way..., but I wonder what the equ ations are?

gaming the model, then they should fix the model, right? Or is it secret just so they can sell it to banks and companies extending credit to custome rs? And BTW, I realize there are lots and lots of scores by various compan ies, and used for different purposes, and that FICO-9 is but one of them.

No, I don't know the formula for credit scores, but I do know my scores flu ctuate widely each month simply because my monthly balance on credit cards (which is paid in full each month) varies.

I don't know if paying off a loan has much impact. But having had that cre dit boosts your credit score compared to not having it. I think this boost happens during the loan as long as your payments are made on time.

Of course it's a secret. If anyone could do the scoring why would the need the agencies?

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  Rick C. 

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My credit score is consistently 750 to 770 or so. I had a BS debt show up on my rating and challenged it. It went away and never returned. I unders tand this is not uncommon and the dispute process is no longer heavily weig hted in the collector's favor.

I use Credit Karma to view two of my scores. Are there still three agencie s?

--

  Rick C. 

  - Get 1,000 miles of free Supercharging 
  - Tesla referral code - https://ts.la/richard11209

Trouble is the government loves to borrow money and print the stuff like mad so while real wages stay stagnant the cost of things like homes, college, and cars do not.

It makes fine financial sense in 2020 to take out a loan to pay for a car and instead of dropping 15 grand on a good used car all at once pay $199/month and utilize the time value of money and put the cash into something paying some real returns.

Cars are a lousy long-term investment they are depreciating rust. They sit around and lose value that's what they do.

Like lab equipment for example. And then you can write that off your taxes. Can't write a personal vehicle off your taxes.

There's a lot of cookie-cutter financial-guru advice from the likes of Dave Ramsey that is OK as far as it goes but seems mostly designed to get middle-class middle-Americans who find themselves in the hole from doing STUPID things out of trouble.

Like people who have a household income of 70k and think a 70k luxury SUV bought on credit is a reasonable purchase for their income-bracket. and soon enough they find themselves in trouble. Yeah. Welp.

this Coronavirus pandemic. Does anybody here believe strongly that those c redit scoring models are really up to the task?

t should have gone UP. I just made the last payment on a personal loan (ta ken out specifically to see if I could bump the score, as I don't really us e a lot of credit at this stage in life.) And, I paid down the balance on my two credit cards (which, typically don't carry much of a balance anyway, but I wanted to get them near zero to see what effect it has on FICO.) An swer appears to be "none", BTW.

check direct deposit (not sure bank account balances figures into FICO?). Unlike a lot of folks out there, I'm not dipping into reserves in order to survive.

f a scam? Maybe not in the "big picture" way..., but I wonder what the equ ations are?

gaming the model, then they should fix the model, right? Or is it secret just so they can sell it to banks and companies extending credit to custome rs? And BTW, I realize there are lots and lots of scores by various compan ies, and used for different purposes, and that FICO-9 is but one of them.

FICO scores don't give a shit whether you have a job or not (no joke!) - th ey look at you bill payment history. A 6 point change is pretty much in the noise; you can charge more on you credit card one month and do that.

We have friends who bought a house on the water in Foster City, no money down and an interest-only loan. Every time property values went up, they refinanced and spent the money on restaurants and wine and cars and cruises.

They both rent now, separately after the divorce.

--

John Larkin         Highland Technology, Inc 

Science teaches us to doubt. 

  Claude Bernard

So they never pay the principal?

In cities like Boston, NYC, Toronto, and San Fran I suppose renting can be a money-win as compared to paying the high prices and high property taxes on a home. you can invest the money you save vs. a mortgage into something paying better returns than the real-estate market where you pay for the profits of all the people ahead of you in line who already made out on the hustle years ago.

The cheapest one-story two-bedroom detached single-family home in my town up for sale atm is listed for $389,000

with this Coronavirus pandemic. Does anybody here believe strongly that th ose credit scoring models are really up to the task?

ng, it should have gone UP. I just made the last payment on a personal loa n (taken out specifically to see if I could bump the score, as I don't real ly use a lot of credit at this stage in life.) And, I paid down the balanc e on my two credit cards (which, typically don't carry much of a balance an yway, but I wanted to get them near zero to see what effect it has on FICO. ) Answer appears to be "none", BTW.

a paycheck direct deposit (not sure bank account balances figures into FICO ?). Unlike a lot of folks out there, I'm not dipping into reserves in orde r to survive.

bit of a scam? Maybe not in the "big picture" way..., but I wonder what th e equations are?

eople gaming the model, then they should fix the model, right? Or is it se cret just so they can sell it to banks and companies extending credit to cu stomers? And BTW, I realize there are lots and lots of scores by various c ompanies, and used for different purposes, and that FICO-9 is but one of th em.

.

perfect, so you can just buy it and rent it to yourself and invest the money you save on rent ....

No, at the end they skipped a few months of interest-only mortgage payments, then walked.

--

John Larkin         Highland Technology, Inc 

Science teaches us to doubt. 

  Claude Bernard

You can still get an "attached" house (sort of a town house, I guess) on a 24-foot-wide lot here, in a mediocre neighborhood, for under a million dollars. See Zillow. Some 1br condos can be had for under a megabuck too. There are lots of 2 and 4M houses in our neighborhood. Good thing we bought 30 years ago, before the google busses.

But apartments are crazy expensive too. I think a lot of newcomers have high incomes and spend it all on housing. But they are mostly having fun, so it's OK while they are still young.

--

John Larkin         Highland Technology, Inc 

Science teaches us to doubt. 

  Claude Bernard

My girlfriend rents a 3 bedroom/1.5 bath/kitchen/dining room apt, two-car driveway, basically the whole bottom floor of a 1920s 3-story Victorian-style home 1 mile from downtown Providence RI for 1k/month utilities included.

Light industrial space is $4-6 per square ft/year I'm thinking about setting up my lab down there it's too big for my home, now