I'm aware discover offers $20 benefit for above 3.0 gpa and car insurance is cheaper for those above 3.0. However getting above 3.0 is very easy and common. Someone with a 3.85 gpa is more responsible than someone with a 3.1 and is expected to be more responsible paying off debt all else equal. I'm going to be honest that this is a rant(I'll be respectful to your opinions though) but I want to ask why can't there be more benefits for having higher gpa?
Starting Score: Ex08-732,Eq08-713,Tu08-717
@oogy wrote:One reason that comes to mind from a credit reporting and FICO scoring perspective:
Where do people that didn't go to college fit in? Are they less responsible? More responsible? Algorithmically, it could be accounted for, but I can't think of anything else on a credit report that's really "exclusive" to people who made a life choice like that.
If I want to squeeze a few more points out and don't have a car loan or mortgage, I can go get a personal loan.
If I only have 1 CC, I can apply for 2 more.
But I'm not going to go to college so I can get an extra boost on my credit report.
That said, from a bank's perspective giving out a loan or insurance, the main reason I can think of is that your GPA data is probably harder to collect than the standard credit report info.
From the perspective of a bank trying to make money and minimize losses, I would think anything they can tie statistically significant data to would be useful in determining your risk. If people with red hair are riskier, charge them more! (Actually, that may be illegal, I dunno) It's just a matter of how difficult that data is to acquire and how statistically significant it is.
To your point, I would think there's probably enough data out there to indicate how much GPA levels correlate with debt risk (and I'm sure data to tie in people who didn't go to college is available too). I would guess it's just not as straight forward to tie it into their algorithms since it's not on your standard credit report.
Thank you for your thoughtful response. I guess there is a degree of difficulty involved in acquiring and using the grades but I agree with you that it is definitely feasible. Overall I couldn't find any areas I disagree with you on.
@Subexistence wrote:I'm aware discover offers $20 benefit for above 3.0 gpa and car insurance is cheaper for those above 3.0. However getting above 3.0 is very easy and common. Someone with a 3.85 gpa is more responsible than someone with a 3.1 and is expected to be more responsible paying off debt all else equal. I'm going to be honest that this is a rant(I'll be respectful to your opinions though) but I want to ask why can't there be more benefits for having higher gpa?
How would you ever come to that conclusion? 
Anyone who's been to a couple of different schools and in a few different majors (or even just paid attention in the dorms to people discussing their different majors at a single school) would know it's a fools errand... and even within a single campus and a single department and the same courses GPA isn't a measurement of someone's responsibility for paying back something like a credit card on time.
@Revelate wrote:
@Subexistence wrote:I'm aware discover offers $20 benefit for above 3.0 gpa and car insurance is cheaper for those above 3.0. However getting above 3.0 is very easy and common. Someone with a 3.85 gpa is more responsible than someone with a 3.1 and is expected to be more responsible paying off debt all else equal. I'm going to be honest that this is a rant(I'll be respectful to your opinions though) but I want to ask why can't there be more benefits for having higher gpa?
How would you ever come to that conclusion?
Anyone who's been to a couple of different schools and in a few different majors (or even just paid attention in the dorms to people discussing their different majors at a single school) would know it's a fools errand... and even within a single campus and a single department and the same courses GPA isn't a measurement of someone's responsibility for paying back something like a credit card on time.
I tend to agree that good grades are not an accurate reflection of credit worthiness but at least in the auto insurance industry some companies do reward customers with good grades. Do better grades make you a better driver? I would guess that insurance companies do have some proof to that effect or else there wouldnt be discounts. So it's not that far of a stretch to think that CC companies might use some of that same reasoning to determine credit worthiness.
@Anonymous wrote:
@Revelate wrote:
@Subexistence wrote:I'm aware discover offers $20 benefit for above 3.0 gpa and car insurance is cheaper for those above 3.0. However getting above 3.0 is very easy and common. Someone with a 3.85 gpa is more responsible than someone with a 3.1 and is expected to be more responsible paying off debt all else equal. I'm going to be honest that this is a rant(I'll be respectful to your opinions though) but I want to ask why can't there be more benefits for having higher gpa?
How would you ever come to that conclusion?
Anyone who's been to a couple of different schools and in a few different majors (or even just paid attention in the dorms to people discussing their different majors at a single school) would know it's a fools errand... and even within a single campus and a single department and the same courses GPA isn't a measurement of someone's responsibility for paying back something like a credit card on time.
I tend to agree that good grades are not an accurate reflection of credit worthiness but at least in the auto insurance industry some companies do reward customers with good grades. Do better grades make you a better driver? I would guess that insurance companies do have some proof to that effect or else there wouldnt be discounts. So it's not that far of a stretch to think that CC companies might use some of that same reasoning to determine credit worthiness.
Which is easier to get a 4.0 at, Stanford or Berkeley?
What major are we even talking about? Nuclear Engineering at Berkeley vs. French Literature at Stanford?
Compare either of those institutions to any of the community colleges in California. Now compare to University of Texas El Paso, or Witchita State University?
There's just no correlation on grades between institutions, or even between departments at a given institution (Engineering majors with lower GPA's on average make for riskier credit users than Sociology students? Seriously?); good grade discounts are for high school students, yeah maybe though color me skeptical on the rationale. College though, there's zero consistency even between departments at a single campus let alone between campuses... in some places a 3.0 is as good as a failure in that department, and in others if you achieve that you can write your application to MIT on a cocktail napkin (admittedly with the proper letter of recommendation).
I'm nearly 100% confident in stating that if you did a trend of credit scores based on GPA achieved in college you'd probably come up with something that looked like a 6 year old's scatterplot on the wall resulting from paint tossed at a fan... it'd be a mess . Take a survey on the forum even, just different personality traits.
@Revelate wrote:Which is easier to get a 4.0 at, Stanford or Berkeley?
What major are we even talking about? Nuclear Engineering at Berkeley vs. French Literature at Stanford?
Compare either of those institutions to any of the community colleges in California. Now compare to University of Texas El Paso, or Witchita State University?
There's just no correlation on grades between institutions, or even between departments at a given institution (Engineering majors with lower GPA's on average make for riskier credit users than Sociology students? Seriously?); good grade discounts are for high school students, yeah maybe though color me skeptical on the rationale. College though, there's zero consistency even between departments at a single campus let alone between campuses... in some places a 3.0 is as good as a failure in that department, and in others if you achieve that you can write your application to MIT on a cocktail napkin (admittedly with the proper letter of recommendation).
I'm nearly 100% confident in stating that if you did a trend of credit scores based on GPA achieved in college you'd probably come up with something that looked like a 6 year old's scatterplot on the wall resulting from paint tossed at a fan... it'd be a mess
As someone who studied both hard-core science and hard-core humanities (my university ranked near the top worldwide in both programs, so similar in quality), I can say there was a huge difference in how much effort it took to get As.
@tacpoly wrote:
@Revelate wrote:Which is easier to get a 4.0 at, Stanford or Berkeley?
What major are we even talking about? Nuclear Engineering at Berkeley vs. French Literature at Stanford?
Compare either of those institutions to any of the community colleges in California. Now compare to University of Texas El Paso, or Witchita State University?
There's just no correlation on grades between institutions, or even between departments at a given institution (Engineering majors with lower GPA's on average make for riskier credit users than Sociology students? Seriously?); good grade discounts are for high school students, yeah maybe though color me skeptical on the rationale. College though, there's zero consistency even between departments at a single campus let alone between campuses... in some places a 3.0 is as good as a failure in that department, and in others if you achieve that you can write your application to MIT on a cocktail napkin (admittedly with the proper letter of recommendation).
I'm nearly 100% confident in stating that if you did a trend of credit scores based on GPA achieved in college you'd probably come up with something that looked like a 6 year old's scatterplot on the wall resulting from paint tossed at a fan... it'd be a mess
As someone who studied both hard-core science and hard-core humanities (my university ranked near the top worldwide in both programs, so similar in quality), I can say there was a huge difference in how much effort it took to get As.
I think it can take much effort in all schools with different people. Some people at "top of the line schools" will get A's with little effort, and others at "lower end schools" might need to work twice as hard to get A's. Because not everyone has the same intelligent.
@Anonymous wrote:
@Revelate wrote:
@Subexistence wrote:I'm aware discover offers $20 benefit for above 3.0 gpa and car insurance is cheaper for those above 3.0. However getting above 3.0 is very easy and common. Someone with a 3.85 gpa is more responsible than someone with a 3.1 and is expected to be more responsible paying off debt all else equal. I'm going to be honest that this is a rant(I'll be respectful to your opinions though) but I want to ask why can't there be more benefits for having higher gpa?
How would you ever come to that conclusion?
Anyone who's been to a couple of different schools and in a few different majors (or even just paid attention in the dorms to people discussing their different majors at a single school) would know it's a fools errand... and even within a single campus and a single department and the same courses GPA isn't a measurement of someone's responsibility for paying back something like a credit card on time.
I tend to agree that good grades are not an accurate reflection of credit worthiness but at least in the auto insurance industry some companies do reward customers with good grades. Do better grades make you a better driver? I would guess that insurance companies do have some proof to that effect or else there wouldnt be discounts. So it's not that far of a stretch to think that CC companies might use some of that same reasoning to determine credit worthiness.
Undoubtedly there is some correlation between grades (gpa) and driving behavior based on good grade discounts that are available to high school and typical college age students. However, the big discount comes when age thresholds are reached and by that time gpa becomes meaningless.
Based on CBIS studies there are correlations between credit scores and insurance claims. Higher scores/lower rates as those with higher scores file fewer claims.
Given the above can you conclude those with higher CBIS are better drivers as a whole - certainly not!
Grades (gpa) really only pertain to a small segment of the population having credit scores - generally those in college. Thus, attempting to use that characteristic could be viewed as discriminatory if applied to assessing credit worthiness.
There are a plethora of situations where a higher gpa student may represent a greater credit risk than a lower gpa student. It is highly doubtful any positive correlation exists - a certain segment of the gpa population might even indicate a negative correlation.
Here is one scenario:
Two high school students with 3.95 GPAs graduate and go to college in California
1) Student A goes to UCB on a full ride merit scholarship and studies petroleum engineering
- Student does well, graduates with a 3.35 gpa (top 25% of class). Job offer of $100k/year from internship company
2) Student B gets into Stanford and studies English. No merit scholarship. Due to high cost incurs $120k in student loans.
- Student does well and graduates with 3.65 gpa (top 25% of class). Finds job after some searching at $50k/year
GPA is not a reliable indicator of credit worthiness or future financial success.