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Regular Contributor
Skiffy
Posts: 252
Registered: ‎03-16-2007
0

Utilization is a major score killer once you get to a cer...

Utilization is a major score killer once you get to a certain point.

And you're right, it's not rocket science. One of the major things to remember: banks are very conservative. Have some accounts open for a long time. Don't be late. Show that you can pay your bills and that you're not stretched.

They only have the numbers from your past behavior to go by. It's not a perfect predictor of the future, but it is a predictor.

For those who think otherwise, look at some of the aggregators of data from prosper.com, a microlending site.

Delinquent loans (credit grades, from excellent to bad: AA, A, B, C, D, E, HR, and NC)
http://www.lendingstats.com/loansList?originationFilter=0&loanStatusFilter=-1

Look at it versus a list of all loans:
http://www.lendingstats.com/loansList

You'll note that, while there are delinquencies in all credit grades, there's a higher default risk in the lower ones. Lenders are revising their criteria; Prosper has in fact re-graded the credit grades recently.

This is, so far as I know, the only openly available information about default risk by grade that normal people get to look at -- but it is very educational.
Contributor
antredd67
Posts: 83
Registered: ‎03-22-2007
0

720+ is just the same as 800+

     Newworld you have been making some valid points, and I don't know your age, but anyone under 40 y/o can't afford to play with their fico scores especially if that means on being dinged, and dinged, and dinged for not PLAYING THIS FICO SCORE GAME BY THE RULES. 
 
    Unfortunately, some of us lose a job, get divorced, get sick or what ever and that affects our credit rating when we can't pay our bills.  But also, many people think that because they don't pay their bills on time, max out their credit cards, spend too much, yet living from pay check to pay check, on a 50,000 combined salary, gives them the right to do that, likes it's an American Right or something, and get mad when they find out that they have a low score as a result. 
 
   Since you are on here like the rest of us, it is very obvious that you care about your credit rating.  I am not bitter about my fico score, and I am not made at the way this credit scoring system is set up.  We just got to remember the game rules, and since I will be well dead when the year AD 32, 023 arrives, I h ope and pray that my Great, Great, Great, Great, Great, Great, Great, Great, Great, Great, Great to the 3rd power child will be smart enough to have a credit score above 800 because he Great Grand daddy to the 3rd power passed the important message down.
Valued Contributor
TheNewWorldMan
Posts: 2,374
Registered: ‎03-15-2007
0

I'm 38, actually. And for me, it's easier to just find an...

[ Edited ]

antredd67 wrote:
Newworld you have been making some valid points, and I don't know your age, but anyone under 40 y/o can't afford to play with their fico scores especially if that means on being dinged, and dinged, and dinged for not PLAYING THIS FICO SCORE GAME BY THE RULES.
Unfortunately, some of us lose a job, get divorced, get sick or what ever and that affects our credit rating when we can't pay our bills. But also, many people think that because they don't pay their bills on time, max out their credit cards, spend too much, yet living from pay check to pay check, on a 50,000 combined salary, gives them the right to do that, likes it's an American Right or something, and get mad when they find out that they have a low score as a result.
Since you are on here like the rest of us, it is very obvious that you care about your credit rating. I am not bitter about my fico score, and I am not made at the way this credit scoring system is set up. We just got to remember the game rules, and since I will be well dead when the year AD 32, 023 arrives, I h ope and pray that my Great, Great, Great, Great, Great, Great, Great, Great, Great, Great, Great to the 3rd power child will be smart enough to have a credit score above 800 because he Great Grand daddy to the 3rd power passed the important message down.



I'm 38, actually. And for me, it's easier to just find another place and start over than it is to wade through all this FICO scoring and wait year after year after decade for some number in a corporate database to inch up so that I can have decent opportunities in life. I'm still a young man, and I don't want to wait until I'm old and gray to have a backyard to barbecue in.

And to digress a moment, I don't think this whole corporatist FICO system in America is going to last too much longer. More and more people are getting madder and madder. America peaked around 1970, only deficit spending and slick politicians have covered it up. I think when enough foreclosure notices go out, eyes will be opened and a hard rain is gonna fall. The system America lives under requires a complacent population and cheap oil, and over the next twenty years both of those are going bye-bye. Between now and 2030 or so, America's moniker is going to change from "USA" to "WTF" I won't be here to see it. End of digression.

At the end of the day, I've got more important things to worry about than FICO. I got the ScoreWatch product and came here because I thought that FICO was something I have control over. Apparently it is not--it's like my genes, I can't help the fact my mother died from cancer and I probably got those genes, so why worry about it? God will punch my ticket when He's good and ready. And He will provide me with a way to get a home even though I have been cursed with a bad FICO for life.

Message Edited by TheNewWorldMan on 03-27-2007 01:45 AM
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Valued Member
twnkltoz
Posts: 54
Registered: ‎03-15-2007
0

And why do you think it is that so many homes have been f...

And why do you think it is that so many homes have been foreclosed on in the last year?
Valued Contributor
TheNewWorldMan
Posts: 2,374
Registered: ‎03-15-2007
0

Because we got into a bubble economy, fed both by individ...



twnkltoz wrote:
And why do you think it is that so many homes have been foreclosed on in the last year?





Because we got into a bubble economy, fed both by individuals' desperation and the bankers...and plenty of greed to go around. Having a population uneducated in the fundamentals of economics contributed, too.

During the late Nineties up to last year or so, you had housing prices soaring 6-12% a year. Figuring the increases would go on forever, people moved off the sidelines to join the housing market and buy in. Banks stepped up with larger loans. With more money chasing houses prices accelerated more. People got more desperate to "buy in while they could" and bankers stepped up with larger loans. That's when the subprime phenomenon kicked in. And so you had a housing price and credit spike that looked like Al Gore's famous "hockey stick" global warming chart.

But of course, a house isn't a magical font of equity money...it's a small plot of land, and some timber, glass, paint and concrete with some labor thrown in. And the true market value of these commodities hasn't doubled, any more than Dutch tulips all of a sudden were truly "worth" a year's salary when that bubble raged. So sooner or later people wake up and say, "Gee, this house isn't REALLY worth twice what it cost in 1997." Once that propagates throughout the economy, say good night to your housing bubble.
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Valued Member
twnkltoz
Posts: 54
Registered: ‎03-15-2007
0

Many people defaulted on their mortgages because they cou...

Many people defaulted on their mortgages because they couldn't afford them.  Their lenders approved them for way more than they could afford, and they couldn't make the payments.  That's why lenders are raising the minimum scores for 100% financing.  Credit history is important.
Valued Contributor
TheNewWorldMan
Posts: 2,374
Registered: ‎03-15-2007

And that's another reason I'm buying a home abroad...in t...



twnkltoz wrote:
Many people defaulted on their mortgages because they couldn't afford them.  Their lenders approved them for way more than they could afford, and they couldn't make the payments.  That's why lenders are raising the minimum scores for 100% financing.  Credit history is important.


And that's another reason I'm buying a home abroad...in the coming months we're going to see a pendulum effect.  The system will over-react (it always does) and we'll go from mortgages being handed out like candy on Halloween to practically NOBODY getting approved.  Banks are going to shy away from high and even medium-risk loans...you'll have to have the credit rating of Satan Himself to qualify for a mortgage.  And since for me that's, oh, about thirty years away, it ain't gonna happen.
 
The one plus side to this for potential homebuyers is that by 2008 to 2009, with all that jive mortgage money pulled from the housing market, demand will slump and housing prices will plummet.  So if you're more fortunate than I am and you have $30,000 or so of cash, or a nosebleed credit rating, you'll be able to get yourself a great deal on a home.
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Contributor
antredd67
Posts: 83
Registered: ‎03-22-2007
0

Housing Bubble Bursting

  Newworld is very right in that I don't see the housing market ever skyrocketing again the way it did in the late 90s to 2004.  I was one of the blessed home owners who bought  his first house in  sunny southern california in 1996 and after 2 years had a $50,000 profit check on that home sold, traded up to a larger home and received a $150,000 check, and traded up to an even larger home receiving a $210,000 profit check being in that house just 18 months.  So from 1999 to January of 2005, my family and I were buying and selling our home every 2-3 years. With that said and as blessed and fortunate as I was, I had no clue being then in my late 20s, early 30s, and mid 30s what having good credit meant. 
 
  Just turning 40 this year, one would think that my Fico score should be well into the high 700s.  But the mistake I made was that I didn't want to pay cash for anything when I  had the credit to do it.  A mistake that many of us 20 and 30 somethings make is wanting things now and not having the patience to wait or pay cash for it.
 
Call it spluring or plain stupidity, but the truth of the matter is that, if you care about your credit rating, then all of that charging, living above your means will catch up with you.
 
Joining this forum has allowed me to see the light as long as we play by the Fico scoring rules. So I  am not discourged because I see my score rising when I play by the Fico rules.
Moderator Emeritus
Brammy
Posts: 5,436
Registered: ‎03-10-2007
0

Isn't it funny how we can all get omething that can virtu...

[ Edited ]
Isn't it funny how we can all get something that can virtually ruin our lives if not handled correctly but no one ever tells us that FIRST.  Most people who visit these boards started doing so to trying to figure out how to dig out of the mess they found themselves in.  For me it was rebuilding credit I totally destroyed.
 
The first time I pulled a three in one, I literally wanted to cry. I actually winced when I saw the numbers.  Now I love all my alerts because every time I get one it goes up, when It goes the other way I know why and I know not to panic.
 
I filed bankruptcy and decided, it wouldn't happen again.  I know several multi filers who just don't seem to get, the Burger king burger is not worth a 35.00 overlimit fee.
 
 


Message Edited by Brammy on 03-27-2007 09:11 PM
Valued Contributor
TheNewWorldMan
Posts: 2,374
Registered: ‎03-15-2007
0

Yeah, I was born a little too late for Peak America...I d...

Yeah, I was born a little too late for Peak America...I didn't get to the table until they'd taken the punchbowl away.
 
I just find it incredible that my financial life is hosed and I'm blacklisted over less than a thousand dollars in bad debts.  I could understand if I'd been a high roller and blown tens of thousands of dollars and had repos and foreclosures.  But it was a phone, dental and power bill for God's sake!  It could have happened to anyone who found themselves on hard times.  And yeah, I can understand it bumping my credit score for a couple years, but to be blacklisted for LIFE?
 
You should really see the movie Gattaca if you haven't already.  In the movie, everyone's privileges in life were determined by genetics.  Well, that's what America is moving toward, only instead of DNA you've got FICO.  And once you're "IN-VALID," you're hosed for good.
 
My honest advice for any American with serious marks on their credit who wants to buy a home is to EMIGRATE.  There's a whole world out there where people live free of having their names blacklisted in government/corporate databases.  Get out while the dollar is still worth something and you're still young (or in my case, in the early stages of middle age).  The folks running FICO want an America full of blessed "beautiful people," with surveillance and our every move documented in triplicate, fine, let them have it.  There's a lot more of us than there are of them, and when you get right down to it, they need us more than we need them.
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