FICO Score

I was on our banking account earlier this morning and decided to look at my latest FICO score.

It came back with a very high number, but then it was telling me if I owed more and paid on time, I would have a higher number. I'm under the impression that no bills is better than bills.

I'm kinda like Desi Arnez, I need someone to 'splain that one to me.

Maybe I should borrow some money and buy another Smith & Wesson K frame?

Have a blessed day,

Leon

The people generating those scores are in the business of loaning money.

Some of the financial stuff just doesn’t seem to make sense.
My old Daddy used to say to qualify to borrow (he said ‘borry’) money from the bank,
you have to prove that you don’t really need the money.

The problem with FICO (FICA is the tax thing) is there's a whole bunch of different ones. The one you see on your credit card / bank site is not necessarily the one a car dealer sees, and your mortgage lender may see a different one from the car dealer.

If it's less than the max of 850 they'll tell you ways to improve it but in reality anything over 740 or so doesn't matter much. I view these "free" scores as entertainment.

FICO scores are the lenders way of charging higher interest rates, and a way to offer interest rates subject to a minimum credit score that few will have...that part is in the fine print.

It ticks me off too. A higher score can get you better loan rates, but there’s no way I’ll pay someone 2% interest when the bank can’t even give me .25%. Lenders value people who make them money, not people who are fiscally responsible. I keep my American Express card that I’ve had since the 1980’s only because they look at the average age of credit. That costs me $55/year.

We took out two car loans in 2018 and our score went up. We could have paid cash, but the dealership offered $1000 rebates for using Ford financing. We paid off both loans within a few months and our score went back down.

This one makes me shake my head too. I got a Discover card last year, because they offered between 2% and 5% cash back, with a cash back match for the first year. I started using the card to pay just about everything, including my utility bills. It amounts to a bit over $1100 per month and I’ll be getting about $400 back next month. I was going to use the card to pay for my recent lawnmower purchase, but the dealer offered me a better deal for paying cash.

I’ve paid off the card promptly every month to avoid paying interest. Our credit score went from 804 down to 800, because I’m using over 10% of the credit limit on the card. I’m glad you posted this. I’m going to call Discover and see if they’ll up my credit limit.

s&wchad said:

It ticks me off too. A higher score can get you better loan rates, but there’s no way I’ll pay someone 2% interest when the bank can’t even give me .25%. Lenders value people who make them money, not people who are fiscally responsible. I keep my American Express card that I’ve had since the 1980’s only because they look at the average age of credit. That costs me $55/year.

We took out two car loans in 2018 and our score went up. We could have paid cash, but the dealership offered $1000 rebates for using Ford financing. We paid off both loans within a few months and our score went back down.

This one makes me shake my head too. I got a Discover card last year, because they offered between 2% and 5% cash back, with a cash back match for the first year. I started using the card to pay just about everything, including my utility bills. It amounts to a bit over $1100 per month and I’ll be getting about $400 back next month. I was going to use the card to pay for my recent lawnmower purchase, but the dealer offered me a better deal for paying cash.

I’ve paid off the card promptly every month to avoid paying interest. Our credit score went from 804 down to 800, because I’m using over 10% of the credit limit on the card. I’m glad you posted this. I’m going to call Discover and see if they’ll up my credit limit.

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If you want, but the difference between 800 and 804 is negligible. You'll get the same best-rate with anything over the mid 700's. Somebody with a 768 gets the same rate as somebody with 818.

Showing you your FICO on the Discover site may be an attempt to get you to do exactly what you propose...raise your limit in hopes you'll use it one day.

But while you are there...note what Discover Bank pays for their online savings account.

To the best of my knowledge, FICO scores are issued through only three national credit bureaus: Experian, Equifax, and TransUnion. None of them loan anyone money.

It is not true that the more you owe, the better your score. If you use credit cards, have an occasional car loan and pay your bills on time, you will gain a very high credit score. In order to get a credit score, you must have bills and/or money owed to someone. We carry credit cards, but pay the entire balance every month on time and that goes a long way towards a high score. We currently do not have any active loans, but yet carry a score of over 840, so you do not have to carry large outstanding long term loans to maintain your score, but you do have to owe somebody money in some fashion in order for a credit score to even be obtained. People who only live on a cash basis with no CCs or loans will have problems obtaining a credit score that means anything. People who have "derogatory" information on their credit history will be hit until the issue is resolved. Bottom line is that if you never take out a loan, apply for credit, or change your current providers like phone, TV, gas and electric, you don't need to worry about a credit score.

Most important thing everyone can do with their credit score history is to get the three full reports every year and check them carefully. Contest derogatory information, and clean up payment histories, your score will rise.

In today's world of cyber-crime, identity theft, etc. it is more important than ever to review your credit history on a regular basis. Reviewing our credit reports, we have found fraudulent entries where someone has taken out a line of credit under our names, but we were able to shut them down before they were able to take advantage of those fraudulent lines of credit.

s&wchad said:

It ticks me off too. A higher score can get you better loan rates, but there’s no way I’ll pay someone 2% interest when the bank can’t even give me .25%. Lenders value people who make them money, not people who are fiscally responsible. I keep my American Express card that I’ve had since the 1980’s only because they look at the average age of credit. That costs me $55/year.

We took out two car loans in 2018 and our score went up. We could have paid cash, but the dealership offered $1000 rebates for using Ford financing. We paid off both loans within a few months and our score went back down.

This one makes me shake my head too. I got a Discover card last year, because they offered between 2% and 5% cash back, with a cash back match for the first year. I started using the card to pay just about everything, including my utility bills. It amounts to a bit over $1100 per month and I’ll be getting about $400 back next month. I was going to use the card to pay for my recent lawnmower purchase, but the dealer offered me a better deal for paying cash.

I’ve paid off the card promptly every month to avoid paying interest. Our credit score went from 804 down to 800, because I’m using over 10% of the credit limit on the card. I’m glad you posted this. I’m going to call Discover and see if they’ll up my credit limit.

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Other things are sometimes affected by your score. Auto insurance is one. Looking to rent a house/ apartment that many times is checked. Even looking for a job you never know what businesses will want, everybody has different criteria. Many times it only makes sense to them!

glowe said:

T

Most important thing everyone can do with their credit score history is to get the three full reports every year and check them carefully. Contest derogatory information, and clean up payment histories, your score will rise.

In today's world of cyber-crime, identity theft, etc. it is more important than ever to review your credit history on a regular basis. Reviewing our credit reports, we have found fraudulent entries where someone has taken out a line of credit under our names, but we were able to shut them down before they were able to take advantage of those fraudulent lines of credit.

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THIS. You get one free report per year from each of the reporting agencies. Stagger the requests so you are getting one every 4 months.
good way to keep track of your credit information.

Ole Joe Clark said:

It came back with a very high number, but then it was telling me if I owed more and paid on time, I would have a higher number. I'm under the impression that no bills is better than bills.

I'm kinda like Desi Arnez, I need someone to 'splain that one to me.

Click to expand...

The truth about Credit "Scoring" isn't about your financial stability, or your ability to pay them back! IT is about their ability to make easy money off of you!

Ivan

I also use Discover as a "Charge" card. I pay it off every month, so no interest and cash back. Your insurance rates are also affected by your credit score. Like many, I have too much plastic now.

I was almost 40 before I got a credit card. The only reason was because I was going out of the country. The card not only made currency conversion a non issue, it offered better overall protection.

Now, a little over twenty years later "I don't leave home without it." Sorry, I simply couldn't resist.

Many insurance companies if not most these days give better rates to people with good credit scores. I have clients that have a lot of money and never had credit cards or even a mortgage so they have no credit. Also younger people like my son who makes good money and never had a credit card or mortgage had no credit so his car insurance rates were high. He got a credit card with a low limit just to charge things then pay them off each month so he could build a credit score and save money. I think it is wrong to let the companies use credit but the insurance department lets it happen here in Florida.

Ivan the Butcher said:

The truth about Credit "Scoring" isn't about your financial stability, or your ability to pay them back! IT is about their ability to make easy money off of you!

Ivan

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Please don't post mis-information. Everyone can get an absolutely free report every year from each of the three reporting services. Like you, they have to make money to stay in business, but almost all is obtained from businesses and lending institutions regularly using the services.

the idea behind the scores is to rate people on how they pay their bills. Obviously if you do not have any bills/ loans or mortgages then they cannot rate you on your ability to pay. No bills then no one has any idea if you can or will pay if they lend you money..Thi k of it as your batting average...

What ???....Wait....They keep SCORE ?

Evidently the FICO Score Thread is destined to become the next Best Caliber for Bears thread.

I get reports to credit bureaus for my credit cards, but none from electric, water, gas , electric, cell phone and trash pick up. BUT if I do not pay them they will try report you as non payer and hurt your credit.
We applied for a home loan in March, reduced my FICO score by 4 points, less than I thought.

I recall some years ago I saw that credit card companies
sometimes refer to holders who pay off their card every
month as...wait for it...Deadbeats! No money to make here.

s&wchad said:

I’ve paid off the card promptly every month to avoid paying interest. Our credit score went from 804 down to 800, because I’m using over 10% of the credit limit on the card. I’m glad you posted this. I’m going to call Discover and see if they’ll up my credit limit.

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Well, I phoned Discover. They told me they couldn’t increase my credit limit because I don’t have a full year of history with them. I only have 362 days...

The did say that I could submit another request, but I have to wait 30 days. If they weren’t paying me to use their card, I’d fire them.