Credit Score [What changes your credit score?]

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SNIPER338
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Credit Score [What changes your credit score?]

Post by SNIPER338 » Tue Sep 04, 2018 11:50 pm

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So we paid off our house and land, RV and all a few weeks ago in one fell swoop... got an email with a sad face saying my credit score has dropped. Lol.

Credit score = debt score. I think its crazy how lenders us a debt score to justify you worthy of paying back money to them...

It should be completely opposite of how it works.


Dont matter to me anymore though. I dont have plans to ever borrow money again.

stocknoob4111
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Re: Credit Score

Post by stocknoob4111 » Tue Sep 04, 2018 11:56 pm

I have no debt at all... my credit score is 820 the last time I checked, so no, you don't have to have debt to have a high score.

drawpoker
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Re: Credit Score

Post by drawpoker » Wed Sep 05, 2018 12:13 am

Not getting this. Who was the author of the email you received that included sad face emoji?

Not a professional source? One of the 3 credit bureaus? A credit card that furnishes FICO scores as a free perk? A lender that you did business with? IOW, Who's now getting snarky?

Just puzzling. From your rather cryptic post.

Who, or, What is it, that got your goat :?:

runner3081
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Re: Credit Score

Post by runner3081 » Wed Sep 05, 2018 4:48 am

SNIPER338 wrote:
Tue Sep 04, 2018 11:50 pm
Credit score = debt score. I think its crazy how lenders us a debt score to justify you worthy of paying back money to them...

It should be completely opposite of how it works.
Well, let's be honest, if you pay off your debt in advance you are not an attractive borrower.

It makes sense to me.

Besides, people are too hung up over credit scores.

SQRT
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Re: Credit Score

Post by SQRT » Wed Sep 05, 2018 7:02 am

runner3081 wrote:
Wed Sep 05, 2018 4:48 am

Besides, people are too hung up over credit scores.
Yes, agree. It’s like some people really don’t want to pay their debt down, but rather get really good at borrowing? Your playing “their” game.

The Wizard
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Re: Credit Score

Post by The Wizard » Wed Sep 05, 2018 7:07 am

You can continue using credit cards to be a "borrower"...
Attempted new signature...

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dm200
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Re: Credit Score

Post by dm200 » Wed Sep 05, 2018 10:08 am

However, if you have a large amount on your accounts and/or large percentage of utilization, credit score will drop - and will go up when you pay these accounts down.

MichCPA
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Re: Credit Score

Post by MichCPA » Wed Sep 05, 2018 10:19 am

I know of someone who was worth $5 million, that couldn't co-sign on her kid's 8K loan for a first car...... Lenders for consumer purchases don't look at the asset side of your balance sheet. My theory is that they don't want the hassle because income verification is much easier than asset verification. Of all of the 'financial success' metrics, credit score has the least to do with financial success. Keep some credit cards open and get mid 700s+ so you can get decent rates on mortgages and insurance. Above that, just ignore the noise 760 vs 800 really doesn't affect your life much.

MichCPA
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Re: Credit Score

Post by MichCPA » Wed Sep 05, 2018 10:19 am

SQRT wrote:
Wed Sep 05, 2018 7:02 am
runner3081 wrote:
Wed Sep 05, 2018 4:48 am

Besides, people are too hung up over credit scores.
Yes, agree. It’s like some people really don’t want to pay their debt down, but rather get really good at borrowing? Your playing “their” game.
Have to love the logic of paying interest to save on interest....

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dm200
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Re: Credit Score

Post by dm200 » Wed Sep 05, 2018 10:25 am

MichCPA wrote:
Wed Sep 05, 2018 10:19 am
SQRT wrote:
Wed Sep 05, 2018 7:02 am
runner3081 wrote:
Wed Sep 05, 2018 4:48 am

Besides, people are too hung up over credit scores.
Yes, agree. It’s like some people really don’t want to pay their debt down, but rather get really good at borrowing? Your playing “their” game.
Have to love the logic of paying interest to save on interest....
Sometimes things not "logical". However, if you use charge/credit cards for a lot of purchases - and pay in full every month - most such cards will charge no interest.

MichCPA
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Re: Credit Score

Post by MichCPA » Wed Sep 05, 2018 10:31 am

dm200 wrote:
Wed Sep 05, 2018 10:25 am
MichCPA wrote:
Wed Sep 05, 2018 10:19 am
SQRT wrote:
Wed Sep 05, 2018 7:02 am
runner3081 wrote:
Wed Sep 05, 2018 4:48 am

Besides, people are too hung up over credit scores.
Yes, agree. It’s like some people really don’t want to pay their debt down, but rather get really good at borrowing? Your playing “their” game.
Have to love the logic of paying interest to save on interest....
Sometimes things not "logical". However, if you use charge/credit cards for a lot of purchases - and pay in full every month - most such cards will charge no interest.
Totally agree with the credit cards (see earlier post). What I don't get are the people you see online advocating taking out car loans and personal loans with credit building being the primary motivator. Credit mix isn't even a huge part of your score. As I said, my approach is to get to mid 700s with credit cards. pay no interest, and then stop worrying so much about the FICO score.

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Re: Credit Score

Post by Cartographer » Wed Sep 05, 2018 10:42 am

MichCPA wrote:
Wed Sep 05, 2018 10:31 am
dm200 wrote:
Wed Sep 05, 2018 10:25 am
MichCPA wrote:
Wed Sep 05, 2018 10:19 am
SQRT wrote:
Wed Sep 05, 2018 7:02 am
runner3081 wrote:
Wed Sep 05, 2018 4:48 am

Besides, people are too hung up over credit scores.
Yes, agree. It’s like some people really don’t want to pay their debt down, but rather get really good at borrowing? Your playing “their” game.
Have to love the logic of paying interest to save on interest....
Sometimes things not "logical". However, if you use charge/credit cards for a lot of purchases - and pay in full every month - most such cards will charge no interest.
Totally agree with the credit cards (see earlier post). What I don't get are the people you see online advocating taking out car loans and personal loans with credit building being the primary motivator. Credit mix isn't even a huge part of your score. As I said, my approach is to get to mid 700s with credit cards. pay no interest, and then stop worrying so much about the FICO score.
Car companies often offer 0% loans for a few years, so you don't need to pay any interest. When we bought a car a couple years ago, we took advantage of such an offer in a vain attempt to boost our credit scores. Not sure there was any benefit to us though, as our scores are essentially the same, if not a bit lower.

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dm200
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Re: Credit Score

Post by dm200 » Wed Sep 05, 2018 10:43 am

In my opinion, once you get into the 700's , there is very little need or benefit to doing things (you might not otherwise do) to increase it. Use the cards regularly, always pay in full on time and keep accounts open that go back many years. Of course, watch for any reporting errors that might happen.

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Re: Credit Score

Post by MnD » Wed Sep 05, 2018 11:26 am

My entire active credit file consists of four rewards credit cards set to "auto-pay statement balance in full on due date" and an unused (for years) overdraft protection checking credit line. Score is north of 830 and trend is flat.

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Re: Credit Score

Post by ChicagoBear7 » Wed Sep 05, 2018 11:52 am

As a banker I will say credit scores are a very good, but not perfect, substitute for "old school" underwriting. They are great for mass market, high volume decisions on standardized products. However, as I'm sure everyone here is aware, they ignore income, ignore total monthly pay offs of credit card balances, and do not consider "credit capacity" such as that $5M in marketable securities someone mentioned above - which can result astonishingly bad decisions in certain cases.

I have found out firsthand the unfortunate reality is that having credit cards only, and not having a mortgage or car/installment loan does eventually impact your score. Mine has recently dropped from @ 815 to @ 795 now that my last car loan has been paid off for about 5 years - our mortgage was paid off almost 10 years ago. I believe crossing the 5 year threshold gave me ding in the calculation. Now a 795+/- is not at all bad, it varies due to credit line usage, but I use my credit cards to get rewards and cash back.

There have been articles published in banking journals about how credit scores are calculated can adversely impact the wealthy and the affluent - it is seen as a marketing opportunity for the private banks. The reality is if you have millions in cash or marketable securities or a high level executive income, you are not going to worry about going over a certain percentage of utilization on your extended foreign vacation just because Fair Isaac thinks you should stay below are certain threshold. And your time is better spent earning that big salary or making those investments than sending early payments every couple days to your credit card in an attempt to manipulate your credit score.

My solace is a couple years ago it was reported that Warren Buffet had a 715.
Last edited by ChicagoBear7 on Wed Sep 05, 2018 3:31 pm, edited 1 time in total.

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Re: Credit Score

Post by MikeG62 » Wed Sep 05, 2018 2:59 pm

ChicagoBear7 wrote:
Wed Sep 05, 2018 11:52 am

I have found out firsthand the unfortunate reality is that having credit cards only, and not having a mortgage or car/installment loan does eventually impact your score. Mine has recently dropped from @ 815 to @ 795 now that my last car loan has been paid off for about 5 years - our mortgage was paid off almost 10 years ago. I believe crossing the 5 year threshold gave me ding in the calculation. Now a 795+/- is not at all bad, it varies due to credit line usage, but I use my credit cards to get rewards and cash back.

My solace is a couple years ago it was reported that Warren Buffet had a 715.
Your entire post was well written ChicagoBear7.

I'll repeat here something I posted a few months ago along the same lines as your experience.

After I paid off our mortgage (somewhere around 2014) and became debt free my credit score dropped. I was historically in the 830-840 range when I was working and had a mortgage. For the last several years my score has fallen to the low 800’s (I’ve even seen it dip into the high 700’s). Quite frankly, it’s annoying. My CC total debt capacity is around $300K and the most my aggregate CC balance would ever be (prior statement balance + current months charges) might amount to 10% of that. All CC’s are paid in full on the due date.

I did lease a car last July. Thought that obligation might raise my score, but it had no noticeable difference.

My brother who has a mortgage, auto lease and loan obligations and often buys things on interest free financing has a credit score north of 840. Maybe he has shown over decades the ability to service all this debt? Yet somehow the fact that I paid off my mortgage early, pay all my CC's in full on time, have 90%+ borrowing capacity across my CC's and never missed a payment on any form of debt does not match up to that in the eyes of the credit scoring gods.
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SQRT
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Re: Credit Score

Post by SQRT » Wed Sep 05, 2018 6:14 pm

ChicagoBear7 wrote:
Wed Sep 05, 2018 11:52 am
As a banker I will say credit scores are a very good, but not perfect, substitute for "old school" underwriting. They are great for mass market, high volume decisions on standardized products. However, as I'm sure everyone here is aware, they ignore income, ignore total monthly pay offs of credit card balances, and do not consider "credit capacity" such as that $5M in marketable securities someone mentioned above - which can result astonishingly bad decisions in certain cases.

I have found out firsthand the unfortunate reality is that having credit cards only, and not having a mortgage or car/installment loan does eventually impact your score. Mine has recently dropped from @ 815 to @ 795 now that my last car loan has been paid off for about 5 years - our mortgage was paid off almost 10 years ago. I believe crossing the 5 year threshold gave me ding in the calculation. Now a 795+/- is not at all bad, it varies due to credit line usage, but I use my credit cards to get rewards and cash back.

There have been articles published in banking journals about how credit scores are calculated can adversely impact the wealthy and the affluent - it is seen as a marketing opportunity for the private banks. The reality is if you have millions in cash or marketable securities or a high level executive income, you are not going to worry about going over a certain percentage of utilization on your extended foreign vacation just because Fair Isaac thinks you should stay below are certain threshold. And your time is better spent earning that big salary or making those investments than sending early payments every couple days to your credit card in an attempt to manipulate your credit score.

My solace is a couple years ago it was reported that Warren Buffet had a 715.
Yes agree. The more you have to worry about your credit score..... well you know.

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Re: Credit Score

Post by AF-Veteran » Wed Sep 05, 2018 7:57 pm

To make matters even more confusing is the numerous versions FICO has to compute your credit score. They state FICO Score 8 is the most common (see link below), yet even among the credit reporting agencies, each of them can come up with slightly different score for you. For the past 2 years, my FICO Score 8 with Equifax has been 850, yet my FICO Score 8 with Experian during this same period is reported as 842. I've viewed both credit reports on file, they have the same info/accounts on me. So FICO must be allowing them some flexibility to adjust calculations on the percentages to compute the scores.

https://www.myfico.com/credit-education ... e-versions

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Re: Credit Score

Post by essbeer » Wed Sep 05, 2018 8:27 pm

It makes sense to me, that when you get moved into a new group you will probably get dinged because there is greater uncertainty about how you will behave in your new group. For instance, when you are in the group of high credit utilizers you probably start at the bottom, but over the years with good, predictable behavior you will rise to the top. When your loans get paid off you move into a group of like characteristic low credit utilizers. Now there is greater uncertainty about how you will react. Where you good about paying your bills because you are a naturally conscientious person? Or were you good about paying your bills because you cared about your credit worthiness and now that you don't care about that will you start slipping. Over time you should start to rise in your new group again.

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Re: Credit Score

Post by 2pedals » Wed Sep 05, 2018 8:40 pm

essbeer wrote:
Wed Sep 05, 2018 8:27 pm
It makes sense to me, that when you get moved into a new group you will probably get dinged because there is greater uncertainty about how you will behave in your new group. For instance, when you are in the group of high credit utilizers you probably start at the bottom, but over the years with good, predictable behavior you will rise to the top. When your loans get paid off you move into a group of like characteristic low credit utilizers. Now there is greater uncertainty about how you will react. Where you good about paying your bills because you are a naturally conscientious person? Or were you good about paying your bills because you cared about your credit worthiness and now that you don't care about that will you start slipping. Over time you should start to rise in your new group again.
I am 59 years old never ever missed a payment on my mortgage, credit card or car loan. My credit score still bounces around between 750 to 850 depending on my credit card utilization, credit installments and very few new hard credit inquiries that I may have. What you say may make some sense but at what age should the bouncing around stop?

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Re: Credit Score

Post by abuss368 » Wed Sep 05, 2018 8:44 pm

MichCPA wrote:
Wed Sep 05, 2018 10:19 am
Above that, just ignore the noise 760 vs 800 really doesn't affect your life much.
I am not so sure about that. We purchased a new home with mortgage a couple of years ago. We were told by the mortgage broker and a national lender that a credit score in the 700s is great and if we are 800 or more that is perfect. They also informed us that the majority of loans are to folks with much lower scores.
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Re: Credit Score

Post by Bogle_Bro » Wed Sep 05, 2018 9:43 pm

mortgage lender here.

740+ generally gets you the best rates on conventional conforming mortgages

if its a jumbo loan, 20 point brackets (ie 741-759) matter up until 800+

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Re: Credit Score

Post by HIinvestor » Wed Sep 05, 2018 9:49 pm

Ours has been 700s-800s whenever we’ve checked. We have twice been rejected by Macy’s of all places (because we froze our accounts due to too much hacking). We have no debt if any kind and have cash back credit cards that work just fine for us.

Our S is an authorized user on one of my accounts and has a credit history older than he is. I believe D is an authorized user on another if my accounts and gas decent credit, though she has never held a full-time job. Neither of them has any debt, now or ever.

Our credit score is pretty irrelevant to us—we can buy whatever we want with savings anyway. We don’t envision seeking any loans and haven’t since paying off our mortgage and real estate loans.
Last edited by HIinvestor on Wed Sep 05, 2018 9:52 pm, edited 1 time in total.

MichCPA
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Re: Credit Score

Post by MichCPA » Wed Sep 05, 2018 9:51 pm

abuss368 wrote:
Wed Sep 05, 2018 8:44 pm
MichCPA wrote:
Wed Sep 05, 2018 10:19 am
Above that, just ignore the noise 760 vs 800 really doesn't affect your life much.
I am not so sure about that. We purchased a new home with mortgage a couple of years ago. We were told by the mortgage broker and a national lender that a credit score in the 700s is great and if we are 800 or more that is perfect. They also informed us that the majority of loans are to folks with much lower scores.
Most calculators provided by banks top out at 760. Washington Post did a study in late 2016 and the median rate did not change between the 725-750 range and the 750-850 range. The 90th percentile rate changed by .12. Since the range of rates narrows as you go up the credit ladder, I would infer that going from 725 to 760 would make some difference, but 760 and 800 wouldn't do as much. I would guess that the difference between those rates was less than the .12 for 90% of people. If you have sources, I would actually be interested in seeing them and possibly adapting my approach because I am looking at a house purchase sometime in the next year.

https://www.washingtonpost.com/news/get ... f1f2d4620e

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Re: Credit Score

Post by MichCPA » Wed Sep 05, 2018 9:56 pm

Bogle_Bro wrote:
Wed Sep 05, 2018 9:43 pm
mortgage lender here.

740+ generally gets you the best rates on conventional conforming mortgages

if its a jumbo loan, 20 point brackets (ie 741-759) matter up until 800+
Thanks for the input. So 740 is really the standard ceiling for conventional, 800 for jumbo, do you know if are there any other 'targets' based on scores I should look at? I did see 780+ as the top rate for auto loans in a couple of places.

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Re: Credit Score

Post by grabiner » Wed Sep 05, 2018 10:42 pm

runner3081 wrote:
Wed Sep 05, 2018 4:48 am
SNIPER338 wrote:
Tue Sep 04, 2018 11:50 pm
Credit score = debt score. I think its crazy how lenders us a debt score to justify you worthy of paying back money to them...

It should be completely opposite of how it works.
Well, let's be honest, if you pay off your debt in advance you are not an attractive borrower.

It makes sense to me.
But that isn't how credit scores work. The score represents the risk that you will default on a new credit obligation. You can have a low default risk and be very profitable to a bank because you carry a large credit card balance and pay interest, or because you charge large amounts so that the bank makes a lot in interchange fees; you can also be unprofitable if you rarely use a card and only charge small amounts.

The score is based on how well you handle credit. Paying on time is the most important factor, but your score also depends on having actually made on-time payments on your credit; the longer your record of on-time payments, and the more different types of loans you have, the stronger the evidence is that you can manage credit responsibly.
Besides, people are too hung up over credit scores.
But I do agree with this, at least among most of the people on this forum. The bank doesn't care whether your default risk is 0.10% or 0.20%, which might be the difference between the top and the 70th-percentile credit score; either way, your credit report will not affect the terms of the credit you get. (Note that this may not apply for insurance; with many insurance scoring models, a single inquiry to open a new credit card can be the difference between excellent and mediocre scores, costing you hundreds of dollars.)
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Re: Credit Score

Post by abuss368 » Thu Sep 06, 2018 5:39 am

What is the highest credit score that a can be achieved?
Last edited by abuss368 on Thu Sep 06, 2018 8:41 am, edited 1 time in total.
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Re: Credit Score

Post by GoldStar » Thu Sep 06, 2018 6:05 am

OP: Since you don't seem to be asking a question but just submitting a rant I will join you:
Yes: The system is very much broken :)
You can have perfectly made every mortgage payment for 15-30 years and car loan payments for various years on time throughout your life - but once you no long have this kind of debt a 10% drop can occur (as if you won't be as good at handling this debt should you ever take out another loan).
Agree - makes little sense.

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Re: Credit Score

Post by scrabbler1 » Thu Sep 06, 2018 7:57 am

I have been getting FICO scores monthly for the last few years through my local bank. I haven't had a mortgage in 20 years and pay my CC every month in full. I don't charge much, maybe $300 per month. But if that happens to spike all the way up to (GASP!) $700 in a month, my FICO Score drops from its usual high 820s to 805 before bouncing back the following month. Weird.

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Re: Credit Score

Post by 47Percent » Thu Sep 06, 2018 8:34 am

SNIPER338 wrote:
Tue Sep 04, 2018 11:50 pm
So we paid off our house and land, RV and all a few weeks ago in one fell swoop... got an email with a sad face saying my credit score has dropped. Lol.

Credit score = debt score. I think its crazy how lenders us a debt score to justify you worthy of paying back money to them...

It should be completely opposite of how it works.


Dont matter to me anymore though. I dont have plans to ever borrow money again.
You are mistaking the weather for the climate.

Anytime, someone makes a drastic change in their credit profile, the lenders get nervous. They want to hang back and see what you are up to. To understand this, consider this. When you have gone to "mostly" cash position, what prevents you from skipping town without paying the rest of the unsecured credit?!

If you continue to do the usual things, and carry on with at least one credit card (to let those guys know you are still above ground), the score will creep back up in time.

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Re: Credit Score

Post by grabiner » Thu Sep 06, 2018 9:03 am

abuss368 wrote:
Thu Sep 06, 2018 5:39 am
What is the highest credit score that a can be achieved?
It's model dependent. In any case, the raw number doesn't matter; 700 when the top score is 850 may be 40th percentile with one model and 60th percentile with another.

Most sources which tell you a score will show the distribution, and often include either your percentile or an indication of excellent/good/fair/poor ranges. The top score of 850 is used by most versions of FICO, but NextGen was a 150-950 range. Since 850 is known as the top FICO score, many non-FICO scores top off at 850 as well.
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Re: Credit Score

Post by 2pedals » Thu Sep 06, 2018 9:26 am

I just checked my FICO score dropped to 810 from 830 last month. :shock: :( :shock: :( :confused :confused

One on credit cards was flagged by the bank and they issued me a new card. :? They said it would go on my record :!: :annoyed :annoyed

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Re: Credit Score

Post by 47Percent » Thu Sep 06, 2018 9:41 am

abuss368 wrote:
Thu Sep 06, 2018 5:39 am
What is the highest credit score that a can be achieved?
To my surprise, 850 is possible. From Discover card statement!

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Re: Credit Score [What changes your credit score?]

Post by LadyGeek » Thu Sep 06, 2018 3:56 pm

I retitled the thread. To keep this actionable (and not a rant), please show how your credit score changes for your own situation. Discussions on "theory" and use of a credit score is also permitted.

The wiki has some background info: Credit score
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Re: Credit Score [What changes your credit score?]

Post by MathWizard » Thu Sep 06, 2018 9:41 pm

If you are really curious, you can use Credit Karma.

They will give an approximate score plus what areas would increase your score.

According to that site, they only way to improve my credit score would be to
get more credit cards, possibly to decrease my debt utilization.

Credit score is dinged by not paying on time, or high credit utilization.
(I believe under 10% is low).

Keep you oldest credit card open by continuing to use it at least a little,
the length of time it has been open helps.

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Re: Credit Score [What changes your credit score?]

Post by grabiner » Thu Sep 06, 2018 10:56 pm

MathWizard wrote:
Thu Sep 06, 2018 9:41 pm
If you are really curious, you can use Credit Karma.

They will give an approximate score plus what areas would increase your score.

According to that site, they only way to improve my credit score would be to
get more credit cards, possibly to decrease my debt utilization.
Paying down your balances is likely the only way to improve your score next month. But your goal shouldn't be to improve your score next month; rather, it should be to improve your score for when you need it. Credit Karma's simulator doesn't allow you to simulate the passage of time. (The old version was intended to do so but the simulator was clearly broken.) If you take out a new loan, you probably don't care whether your score went up or down a few points, since you aren't planning to take out another loan after that. But if you then pay all your accounts on time for a year, that might improve your score significantly. After a year, the inquiry to open the new loan won't matter much, and the loan itself won't be as new, but the loan will still improve your utilization ratio (if a credit card) or your credit mix (if an auto or mortgage loan).

And if you really want to know what will improve your score, you should get an actual score with reason codes, a list of reasons your score is not higher.

I get such a score for free from my mortgage lender. At my last check, there was only one factor listed, "Length of time accounts have been established is too short," so I expect that my score will improve if I keep the same accounts open but do nothing else. At other times, I have seen "Too many accounts with balances"; I lose points if all three of my credit cards have a balance, but not if only two do. (Neither of these is important to me; I am not in the market for a loan now, and if I were, my score is so high that I wouldn't be denied credit based on the score anyway.)
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Re: Credit Score [What changes your credit score?]

Post by sil2017 » Fri Sep 07, 2018 6:08 am

Sniper338-
I paid off my Heloc, mortgage, and car loan within the last 2 months. I left the Heloc loan opened with zero dollars. My credit score dropped from 823 to 792. Today I checked and it is at 799. So I guess maybe a dip and now moving upwards..

2015
Posts: 1827
Joined: Mon Feb 10, 2014 2:32 pm

Re: Credit Score

Post by 2015 » Fri Sep 07, 2018 10:55 am

47Percent wrote:
Thu Sep 06, 2018 8:34 am
SNIPER338 wrote:
Tue Sep 04, 2018 11:50 pm
So we paid off our house and land, RV and all a few weeks ago in one fell swoop... got an email with a sad face saying my credit score has dropped. Lol.

Credit score = debt score. I think its crazy how lenders us a debt score to justify you worthy of paying back money to them...

It should be completely opposite of how it works.


Dont matter to me anymore though. I dont have plans to ever borrow money again.
You are mistaking the weather for the climate.

Anytime, someone makes a drastic change in their credit profile, the lenders get nervous. They want to hang back and see what you are up to. To understand this, consider this. When you have gone to "mostly" cash position, what prevents you from skipping town without paying the rest of the unsecured credit?!

If you continue to do the usual things, and carry on with at least one credit card (to let those guys know you are still above ground), the score will creep back up in time.
To some of us, the credit score nonsense is just that, nonsense. I too pay cash for everything, large and small, and any credit is paid off by month end. I too will never have to borrow again. For years and years, my credit score has bumped within 5 points of 813 like a car driving down a gravel road with a flat tire. This with making absolutely no changes to my credit. Why? Moon's in Sag? Mercury's in retrograde? Again, some of us are in a position to be oblivious to the nonsensical credit score game.

47Percent
Posts: 321
Joined: Tue Oct 29, 2013 9:59 pm

Re: Credit Score

Post by 47Percent » Fri Sep 07, 2018 12:01 pm

2015 wrote:
Fri Sep 07, 2018 10:55 am

To some of us, the credit score nonsense is just that, nonsense. I too pay cash for everything, large and small, and any credit is paid off by month end. I too will never have to borrow again. For years and years, my credit score has bumped within 5 points of 813 like a car driving down a gravel road with a flat tire. This with making absolutely no changes to my credit. Why? Moon's in Sag? Mercury's in retrograde? Again, some of us are in a position to be oblivious to the nonsensical credit score game.
I am not trying to defend the Credit Bureau mafia.

But, there is a lot of misunderstanding about the credit scores.

There is always going to be some variability in any measure that has many variables going into it (a truism!)

Your weight is not going to be the same throughout the day. That doesn't mean you've lost or gained weight. Your blood pressure is not going to be the same throughout the day. That doesn't mean you have high blood pressure, nor have you miraculously cured yourself of it many times over.

A variation of "within 5" points" is completely meaningless, and I would say it is actually indicative of a measure that is working extremely well.

I am sure there are some b.s. variables which may not be generally indicative of credit risk (at least in your opinion) included in the score. But, as a broad measure it is not going to confuse between two people one with a score of 650 and another with a score of 830. If it did, it would have failed to exist long time ago.

2015
Posts: 1827
Joined: Mon Feb 10, 2014 2:32 pm

Re: Credit Score

Post by 2015 » Sat Sep 08, 2018 11:19 am

47Percent wrote:
Fri Sep 07, 2018 12:01 pm
2015 wrote:
Fri Sep 07, 2018 10:55 am

To some of us, the credit score nonsense is just that, nonsense. I too pay cash for everything, large and small, and any credit is paid off by month end. I too will never have to borrow again. For years and years, my credit score has bumped within 5 points of 813 like a car driving down a gravel road with a flat tire. This with making absolutely no changes to my credit. Why? Moon's in Sag? Mercury's in retrograde? Again, some of us are in a position to be oblivious to the nonsensical credit score game.
I am not trying to defend the Credit Bureau mafia.

But, there is a lot of misunderstanding about the credit scores.

There is always going to be some variability in any measure that has many variables going into it (a truism!)

Your weight is not going to be the same throughout the day. That doesn't mean you've lost or gained weight. Your blood pressure is not going to be the same throughout the day. That doesn't mean you have high blood pressure, nor have you miraculously cured yourself of it many times over.

A variation of "within 5" points" is completely meaningless, and I would say it is actually indicative of a measure that is working extremely well.

I am sure there are some b.s. variables which may not be generally indicative of credit risk (at least in your opinion) included in the score. But, as a broad measure it is not going to confuse between two people one with a score of 650 and another with a score of 830. If it did, it would have failed to exist long time ago.
I don't consider myself having "succeeded" in the morass otherwise known as the credit score game. The kicker is I don't even know why my score is as high as it is, other than paying interest of any sort is a sin to me, so I religiously pay off all credit cards within 30 days (even though since I've stopped playing the credit card/bank bonus game I've reverted to using only one card, intending to close all the rest). I haven't had an installment loan of any type in decades, having paid cash for everything, including car and home.

To me, the whole credit game is another bureaucratic hoop that is the last thing I have time for. For this reason, I've never really paid attention to my score. When you don't intend to use credit, dwelling on your score is just a waste of time.

smectym
Posts: 180
Joined: Thu May 26, 2011 5:07 pm

Re: Credit Score [What changes your credit score?]

Post by smectym » Sat Sep 08, 2018 5:27 pm

We charge a lot on credit cards but always pay the balance in full every month--actually, SEVERAL TIMES a month, because FICO will lower the score immediately once they notice the balance creeping up...even if the payment deadline is still several weeks away. The only way to get them to back off is to continually pay off the cards. That is the only variable I notice.

However, I once went into a credit union to buy a CD. They ran my credit. I noticed that the score, while "fine," was a lot lower than I believed it should be. The customer service rep explained that the credit union uses a proprietary sub-score tailored to auto loans (because that's their main loan business). Since I didn't carry an auto loan, that hurt the customized auto credit score quite a bit
Smectym

SNIPER338
Posts: 15
Joined: Mon Aug 20, 2018 8:27 pm

Re: Credit Score

Post by SNIPER338 » Tue Sep 11, 2018 11:00 pm

2015 wrote:
Fri Sep 07, 2018 10:55 am
47Percent wrote:
Thu Sep 06, 2018 8:34 am
SNIPER338 wrote:
Tue Sep 04, 2018 11:50 pm
So we paid off our house and land, RV and all a few weeks ago in one fell swoop... got an email with a sad face saying my credit score has dropped. Lol.

Credit score = debt score. I think its crazy how lenders us a debt score to justify you worthy of paying back money to them...

It should be completely opposite of how it works.


Dont matter to me anymore though. I dont have plans to ever borrow money again.
You are mistaking the weather for the climate.

Anytime, someone makes a drastic change in their credit profile, the lenders get nervous. They want to hang back and see what you are up to. To understand this, consider this. When you have gone to "mostly" cash position, what prevents you from skipping town without paying the rest of the unsecured credit?!

If you continue to do the usual things, and carry on with at least one credit card (to let those guys know you are still above ground), the score will creep back up in time.
To some of us, the credit score nonsense is just that, nonsense. I too pay cash for everything, large and small, and any credit is paid off by month end. I too will never have to borrow again. For years and years, my credit score has bumped within 5 points of 813 like a car driving down a gravel road with a flat tire. This with making absolutely no changes to my credit. Why? Moon's in Sag? Mercury's in retrograde? Again, some of us are in a position to be oblivious to the nonsensical credit score game.
Yep. Im just planning on never borrowing money again. This is what we are working towards. Thats why I laugh at the credit score dropping and all the offers and incentives thrown at me.

2015
Posts: 1827
Joined: Mon Feb 10, 2014 2:32 pm

Re: Credit Score

Post by 2015 » Wed Sep 12, 2018 10:14 am

SNIPER338 wrote:
Tue Sep 11, 2018 11:00 pm
2015 wrote:
Fri Sep 07, 2018 10:55 am
47Percent wrote:
Thu Sep 06, 2018 8:34 am
SNIPER338 wrote:
Tue Sep 04, 2018 11:50 pm
Yep. Im just planning on never borrowing money again. This is what we are working towards. Thats why I laugh at the credit score dropping and all the offers and incentives thrown at me.
There is only one way that I know of to do this, and that's to become a master at learning to say no to yourself. Thankfully, I studied much of Brian Tracy's work on success and achievement in my early 30's. Among the many powerful heuristics I took away was that if you want to succeed, you must train yourself to always do the difficult, disciplined, determined thing. Tracy said high performing men and women get themselves to do what they have to do when they have to do it whether they feel like it or not (and high performers have to do the very same thing that low performers do, it's just that high performers make themselves do it). If you learn to do this daily, you will employ the power of compounding in your life such that your results over your lifetime will eventually astonish you.

Tracy also stated (even at that time several decades ago) that personal responsibility was the personal, economic, and social crisis of our day. Arbitrage this failure on the part of others to your advantage and your life will move into an area where there isn't a lot of competition. One of my favorite heuristics from Tracy is that if you are easy on yourself, life is hard on you, if you are hard on yourself, life will be easy on you. I have never seen this fail.

The New York Times has a rather depressing piece (though not new news) today regarding who has and who has not recovered from The Great Recession. I believe we are living in a new era, one where it's more important than ever not to make mistakes from which we cannot recover. In this new era, I believe leverage of any kind can be quite dangerous if you don't know what you're doing.

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