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MyFico scoring is SO unfair

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MarineVietVet
Moderator Emeritus

Re: MyFico scoring is SO unfair


@mongstradamus wrote:

i thought usually when you pay off an installment loan your scores usually take an major dip. That is why people like to carry secured loans like what alliant offers to keep scores up. 


It seems more and more that FICO 08 looks at lack of installment loans in a more negative light than older models and that's unfortunate IMO but it's what we have to work with. And the impact appears to be varied. Some say they lost alot of points when the last installment loan was paid and closed while others report very little damage. Once again it's YMMV.

 

As far as carrying any kind of loan just for scoring purposes we all have to decide if that approach is right for us but I personally would never do such a thing. However I can't and won't say someone else is wrong for doing so.

 

Being debt free is always my #1 goal with scores a very distant second.

 

 

Message 11 of 20
EW800
Valued Contributor

Re: MyFico scoring is SO unfair

I fully agree, MarineVietVet! While I have worked hard to get my scores up, I would never take out a particular type of loan to make the FICO God's happy. I am enjoying being debt-free for the first time in MANY years and really want to stay that way as long as possible. Smiley Happy
Year 2012: All Scores in the 520 range, during a foreclosure, CC Settlement and high UTIL. Very ugly days...
April 2023: EX8: 840; EQ8: 832; TU8: 842 -- Middle Mortgage Score: 822
In My Wallet: Discover $73.7K; Cap1 Venture $48.7K; Amex ED $38K; Amex Optima $2.5K; Amex Delta Gold $18K; Citi Costco $22.5K; Cap1 Plat $8.4K; Barclay $7K; Chase Amazon $6K; BoA Plat $21.6K; Citi TY Pref $21K; US Bank $4K; Dell $5K; Care Credit $6.5K. Total Revolving CL: $296K
My UTIL: Less than 1% - Only allow about $10 a month to report, on one account. .
Message 12 of 20
Anonymous
Not applicable

Re: MyFico scoring is SO unfair

 

 

Student loans were paid off approx 8 months ago.  The negative marks (there were 3 of them) were removed 6 months ago. I finally broke down 2 years ago and financed a car to get some credit and just this past month opened a capitol one credit card (unsecured - I refuse to pay a company to allow them to charge me money). CL is $300, current balance is under $100.  In the 2 years of my car loan I have 2 late payments due to hospitalization for my disability...I relied on someone else to send them in my absense... I have one medical bill listed as in collections currently showing that I am disputing because I am working with a company called Human Arc that is assisting me in paying it so it should NOT have gone into collections.

 

The fact that people are penalized for NOT being in debt (ie. paying off loans) is again obscene!  One should be rewarded for choosing to live within their means and not exceed their ability to pay debt.  I have done so for many years.  I paid off old credit cards back in 2002 and closed the cards because I became disabled and knew I would no longer be able to afford them.  This should be rewarded, not punished.

 

That it was stated the system is a complex one.....it is MADE to be one.  It does not NEED to be one.  The "powers-that-be" make it that way.  They bring it upon themselves and the consumers. 

 

At this time, the only score I have is my TU that Captol One provides me with and it is a 620!!!  Simply because I have "no" credit, have paid off my debt and did not pay one of SEVERAL doctors as they wish to be paid!  Where are all the payments to all the other doctors and hospitals that I DID pay on time, as agreed???

 

 

Message 13 of 20
NRB525
Super Contributor

Re: MyFico scoring is SO unfair


@Anonymous wrote:

 

 

Student loans were paid off approx 8 months ago.  The negative marks (there were 3 of them) were removed 6 months ago. I finally broke down 2 years ago and financed a car to get some credit and just this past month opened a capitol one credit card (unsecured - I refuse to pay a company to allow them to charge me money). CL is $300, current balance is under $100.  In the 2 years of my car loan I have 2 late payments due to hospitalization for my disability...I relied on someone else to send them in my absense... I have one medical bill listed as in collections currently showing that I am disputing because I am working with a company called Human Arc that is assisting me in paying it so it should NOT have gone into collections.

 

The fact that people are penalized for NOT being in debt (ie. paying off loans) is again obscene!  One should be rewarded for choosing to live within their means and not exceed their ability to pay debt.  I have done so for many years.  I paid off old credit cards back in 2002 and closed the cards because I became disabled and knew I would no longer be able to afford them.  This should be rewarded, not punished.

 

That it was stated the system is a complex one.....it is MADE to be one.  It does not NEED to be one.  The "powers-that-be" make it that way.  They bring it upon themselves and the consumers. 

 

At this time, the only score I have is my TU that Captol One provides me with and it is a 620!!!  Simply because I have "no" credit, have paid off my debt and did not pay one of SEVERAL doctors as they wish to be paid!  Where are all the payments to all the other doctors and hospitals that I DID pay on time, as agreed???

 

 


Medical debts are a whole other set of issues, mainly because we don't choose that misfortune. Sorry to hear you have those challenges.

The other, more insidious aspect of medical issues is, the randomness of the charges that result. There is little one can do to shop around for healthcare, and the negotiation of pricing is thus one-sided. Perhaps the main driver of your FICO issue is the medical debts, and if those were isolated the regular credit FICO would look more logical.

 

I think the latest versions of FICO are adjusting how they approach medical debts, perhaps someone else can expand on that? The point being that the complex algorithms are changing over time as new approaches to how debt should be looked at are discussed. So they are trying, FWIW.

High Bal Jan 2009 $116k on $146k limits 80% Util.
Oct 2014 $46k on $127k 36% util EQ 722 TU 727 EX 727
April 2018 $18k on $344k 5% util EQ 806 TU 810 EX 812
Jan 2019 $7.6k on $360k EQ 832 TU 839 EX 831
March 2021 $33k on $312k EQ 796 TU 798 EX 801
May 2021 Paid all Installments and Mortgages, one new Mortgage EQ 761 TY 774 EX 777
April 2022 EQ=811 TU=807 EX=805 - TU VS 3.0 765
Message 14 of 20
Closingracer99
Valued Contributor

Re: MyFico scoring is SO unfair


@Legal_Girl wrote:

It's a crying shame, but anytime a FICO score goes down due to a balance increase, etc., I have never seen it go back up as quickly as it went down, even with paying off balance.  At least in my experience. 


+1

 

My Discover card posted as Maxxed out because I needed to buy something right before my Bill popped up so it showed as maxxed and was planning on carrying it a few months but paying off 75% of it off as soon as it hit my account ( I had 0% APR). Shot my TU score down 60 points and took about 6 months to get back where i was the first time 


My Cards: Amex BCE: $9,000, Amex Hilton HHonors: $2,000, Amex ED: $12,000, Barclays NFL extra points: $3,000, Bank of America MLB cash rewards: $17,000, BBVA compass NBA Amex triple double rewards: $17,000, Chase Amazon: $1,000, Chase Freedom: $9,000, Chase Sapphire: $5,000, Chase Slate: $5,000, Chase Disney: $4,000, Citi Double Cash: $5,400, Citi AA plat: $5,500, Citi Simplicity: $3,000, Citi Thank you preferred: $8,800, Capital one GM: $2,000, Capital one PlayStation: $3,000, Gamestop: $1,150, Amazon Store: $5,000, Ebay MasterCard: $5,000, American Eagle Storecard: $750, Macy's: $500
EX: 744, TU:750, EQ: 740
Message 15 of 20
Anonymous
Not applicable

Re: MyFico scoring is SO unfair

I have ongoing medical debt due to my chronic disease.  Unfortunately, Medicare only covers a small portion of the expenses (which is understandable).  Therefore, I have ongoing medical expenses most of which I pay in full monthly.  Those payments are not reported to show my payment history.  Nor is my rent that I have paid on time for the past 7 years.  However, if I were not to pay my landlord, he could take me to court and put that on my credit.....again, UNfair.  As I stated in a previous post, if a company or individual is not reporting ALL payments, they should not be permitted to report anything.  It should not be one-sided,  That is not showing an accurate picture of an individuals ability to pay.  And don't get me started about my insurance rate being linked to my credit rating!  I have ZERO tickets or accidents in 22 years and pay more than some with a terrible driving record!  They tell me there is a "corrolation"......not with ALL.  It should be based on my driving, age and number of tickets, and nothing else.

 

I have been working on this for many years and have wanted to stop renting and paying more than it would cost me to buy a house, but I am ready to just give up!  I am tired of trying to play their games that have no logic and want to keep me in debt.  I just don't know what to do!

 

BTW:  My credit shows one credit card is 20 years old with CL of $1000.00 (yes, one thousand) zero balance.  It is a BP card that I don't even have anymore. I have not used it in more than 7 years! 

 

 

Message 16 of 20
Anonymous
Not applicable

Re: MyFico scoring is SO unfair

Again, there is no logic with the system.  If you charge on the cards they lower your score.  If you pay it off they lower your score (this should increase it by leaps)!

 

It should increase as quickly as it decreases and by as many points.

 

Who decides this and who is in charge?  isn't there a way to fight this and have it changed?

 

Message 17 of 20
Anonymous
Not applicable

Re: MyFico scoring is SO unfair


@Anonymous wrote:

Again, there is no logic with the system.  If you charge on the cards they lower your score.  If you pay it off they lower your score (this should increase it by leaps)!

 

It should increase as quickly as it decreases and by as many points.

 

Who decides this and who is in charge?  isn't there a way to fight this and have it changed?

 


I'm sorry for the medical issues you suffer from but you act like that the 'system' prevents anyone from doing anything to raise and maintain good or even great credit scores.  That's just not true as many people here can attest.  Whatever the reasons, you do have late payments and therefore lower scores as a result.  If you really want to raise your scores there are plenty of things you can do such as PFD letters and or Goodwill letters.  In addition you stated that you are unwilling to get a secured credit card.  A LOT of people on this board have done exactly that and in very short periods of time raised their scores qute significantly.  Instead of just complaining that the system is stacked against you such as making people with poor credit pay higher interest raises (which makes perfect business sense as it costs credit card companies and banks more to deal with people that pay late), look for ways to improve your scores.  Your simplistic statements such  as 'if you charge on the cards they lower your score. If you pay it off they lower your score (this should increase it by leaps)!" just arent true.  While there might be some issues that seem to make no sense in scoring models, people that use their credit cards and pay on time and keep low balances do see their score rise and often quite quickly..

 

if if you truly are interested in having a better score instead of letting your frustration just lead you to vent, visit the rebuilding forum and research and ask for ways to do just that.  You can get a lot of help on this board if you so choose and I wish you luck.

Message 18 of 20
Anonymous
Not applicable

Re: MyFico scoring is SO unfair

I am not the only one that refuses to play the games of the "powers that be".  It is not good business or financial sense for me to pay a company to allow them to charge me a high interest rate to use their card.  Nor is it a good financial move for me to have credit cards or loans that make me live beyond my means.  These are the things that make me compain about the system and its flaws.  For those on here that have decided to get a secured card, that was their choice (while I see it as an unwise financial decision).  I live a VERY limited disability income and cannot justify that type of expense when I pay my debt on time.  2 late payments and hundreds of on-time payments....difference is most of the on-time payments are not reported.  Another flaw that should be fixed.  While the 2 payments were ultimately my responsibility, it was a new car loan and my niece (who has always paid my bills while I am in the hospital) mailed them to the wrong address.

 

Not sure why you say otherwise, but it IS true that if a person charges the max on their credit card their score is lowered (heaven forbid they use the credit they are given) or if they pay it off their score is lowered (mine was when I paid off BP and again when I paid off ALL my student loans). I am assuming you work for the system since you are so quick to defend a system that is so flawed and needs to be readjusted in a MAJOR way!  It is completely one-sided against the typical consumer and unless a person is willing to play the game, they are screwed.  Plain and simple, the logistics behind the scoring system needs to be recalculated.  It does not need to be as complex as they are making it out to be.  Nor does it need to be as unfair.  At one time, creditors actually took the time to LOOK at your credit, now they just look at a number and judge you on that alone.  That was by fr the biggest mistake made in recent history in regard to credit!  It does not give a fair and accurate picture of how a person pays their debt. 

 

 

Message 19 of 20
Anonymous
Not applicable

Re: MyFico scoring is SO unfair

Thank you for supporting me on that matter.  It is nice to see someone else that does not want to live outside their means!

 

Happy Holidays!

 

Message 20 of 20
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