Understanding FICO® Scoring

[tvlawyer]

Hi all,

My credit score is 501, no loans for over six years, own all my cars and home with no payments, only negative items are ancient and two new cell phone accounts I am contesting b/c they hosed me on promises of rebates that never materialized so I cancelled them.  I can't believe my score is lower then 100% of every person in this country, INCLUDING MYSELF?  Anyway, what crack head designed this system and why are they still employing it?  This means I could go to every death row inmate walkin to the chair and he or she will have the same or better credit score as I.  WHAT's UP WITH DAT? 

Thanks,

Tvlawyer

[cmthomas06]

that seems rather odd... do you have any credit cards reporting or anything? Have you pulled your credit reports and looked for inconsistencies?

[tvlawyer]

Well, it gets worse, years ago I had credit cards, car loans, and home loans.  All loans are closed and paid with the exception of a couple over six years ago and those two car loans I got hosed when they tried to up my payoff by over six thousand.  My mortgage company had its employees criminally charged and the bank went bust and got bought out.  Overall, I never had a credit score that was great even when I had numerous things that were paid.  I think the scoring is negatively biased and not based upon sufficient flexibility to account for equity prone individuals who gave up on credit.  If it weren't for the silly cell phone cos I'd be event free for some time now.  I do have a couple of random medical copays my ins co said they paid that are on my report.  Either way, there were numerous good accounts that don't seem to matter even when they're for thousands and the med bills are a couple hundred.  I think its about time I think of a more flexible probability schedule.  This scoring is more adept at making Isaac money then representing reality.   Cheers.

[DaveSignal]

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tvlawyer wrote:

This means I could go to every death row inmate walkin to the chair and he or she will have the same or better credit score as I.  WHAT's UP WITH DAT? 

Thanks,

Tvlawyer

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Technically, yes, but what does being on death row have to do with having a good credit score?

[drkaje]

Negative items drag down scores. They may seem ancient/unfair to us but FICO doesn't care about feelings, LOL!

Also, if you're not using any credit building a positive history isn't really going to happen.

[cmthomas06]

unfortunately, 1 bad thing will drag your score down (let alone several). While you are waiting for those negatives to deminish, you should get a cc for rebuilding. Since all of your loans are paid off, they arent doing much good with increasing your score any. I completely agree that it seems unfiar - my score dropped about 60 points because I did an app spree (only had 1 card at the time) and my UTI went up about 15%. 

[Revelate]

Not certain why the anger is in your post: people change in their financial habits over time, you may have been a great borrower in the past, but something 10 years ago, is of limited value today.  Without current history, you're hosed.

Also 501? That sounds like a Vantage Score anyway, that's not FICO at all, but rather Experian, Equifax, Transunion.

At any rate there's a simple fix: go open up two or three credit cards, and some silly installment loan, and go on with life and watch the numbers rise.  That's what I'm doing, and you're probably in a better situation than I am credit history wise but my score improvement is listed in my signature.  It just takes time, nothing you can do about it except educate yourself, and play the game as you noted.

Not saying it's an equitable system, but it's what we have and life ain't exactly fair in all cases.