It's a minor adjustment to move from paying on the due date vs. just before the statement date, and you get the extra points for doing so.
A FICO score is not like a motor. It figures the possibility of one defaulting, therefore an 850 would say that there is 0% of an individual defaulting...not possible in my opinion.
A FICO score is not like a motor. It figures the possibility of one defaulting, therefore an 850 would say that there is 0% of an individual defaulting...not possible in my opinion.
Starting Score: 469
@Junejer wrote:
It's a minor adjustment to move from paying on the due date vs. just before the statement date, and you get the extra points for doing so.
A FICO score is not like a motor. It figures the possibility of one defaulting, therefore an 850 would say that there is 0% of an individual defaulting...not possible in my opinion.
Exactly. The Fico score vs. engine specs is a very poor analogy.
Fico scoring segments the population according to a risk model. It is not perfect, but it has more statistical testing behind it than any of the competitors, so it is still regarded as one of the best tools available. It gives banks and other lenders a numerical target - if a lender wants customers only in the top 10%, they can set a Fico score of aaa as their minimum. If they want the top 20%, they can set bbb as their minimum. And so on ...
A more useful analogy might be the SAT score. Not making a perfect score does not represent a failure. The SAT score is used along with other criteria to determine who is selected for admission to a particular school. Some schools may require a 1300 score, some a 1000 score, etc., just like some banks/CCCs look for 750+ Fico scores while others require only 700+ scores.
If a 790 score earns the best possible interest rate on a mortgage or auto loan, then the fact that it is not an 850 score makes zero difference. However, if someone does have a 790 score, there is probably some factor(s) in their credit history (age, credit mix, etc.) that are not quite earning them 100% of each scoring category, and keeping them from approaching 850. The formula is what it is. Some people do have 850 scores, it is not a mythical number.
And analyzing a formula that is not public IS a game, and that's just the way it is. Politics is a game. Progressing in an office environment is a game. Disputing incorrect info on a credit report is a game. Life forces everyone to play games all the time. It's not right, but learning to play the games will get a person a lot farther than fuming about the circumstances ... 
With all due respect prof, I think you are making this thing too complicated. Many members here do this. I am able to check my balances online and pay my CCs online as well. I just did this the other day. A couple of days before the statement closed, I went online and made the payment. I know that there were no other charges pending, so the balance will be reported as $0. If I were to choose, I could've left $10 on this card, to get a balance to report. Then, on the due date, or before, I could pay the remaining $10, thus avoiding interest charges. In my HY accounts, I can make six transfers per month.
FWIW, I was a VP in Commercial Lending, and quite frankly, I was able to negotiate rate with my customers, based off of their relationship with us, versus the FICO score. So, if a customer had a great, long-standing relationship with us, and has borrowed and paid off millions of dollars in the past and they had a score of 740, I would give them a much better rate than a brand new customer to the bank, with no track record and an 840 FICO score.