@Gunnar419 wrote:
@Revelate wrote:
@Anonymous wrote:
@Revelate wrote:Net worth has little to do with one's behavior with regards to loan or credit card repayments.
Article didn't really mention anything else: it might not be a perfect system but there's a lot of data standing behind it.
I would guess you are wrong on this. American Express asks net worth on applications and they have lowest charge off rate. While you will have your professional athlete who spend 100 million dollars in a couple of years, people with normal jobs who accumulate wealth are going to much more likely to pay back debt. If you have a million dollars in savings you aren't going to default on a credit card with a 25k limit.
On the flipside the two near billionaires I've met had worse credit scores than I did even when I was still batting 640.
I think there's very little correlation between credit score and income / assets, but it's just anecdotal evidence and I could be wrong.
Also a CO is an accounting entry where the creditor has decided they're not likely to get it back... so if you are chasing someone with assets, you don't charge it off typically. I'm not really surprised by the Amex data as a result nor do I read that much into it TBH.
I agree with Revelate. I've known many poor but honest people who pay their bills religiously. I am one of them. I worked hard to earn my 800+ scores and earn them i did.
I have also been around a number of real hot shots in my life, including a few who made it onto Forbes lists, who scorned keeping financial commitments. Paying bills and keeping commitments was to them something only stupid middle class people did. They got away with it because merchants and banks are ALWAYS willing to take gambles on rich people, as generations of aristocrats have learned.
I've also known many middle class people with good incomes and assets who had trouble paying their bills because they were so desperate to keep up with the Joneses, something my poor but frugal counterparts don't do.
Yes, it's just anecdotal, but in this one case I know from experience that the FICO algorithms are correct. Otherwise I do think they've got a lot of flaws and need revamping, but I don't think the original article made a very good case for that argument.
Well then, perhaps it's time we learned a thing or two from them? Especially for those on here with 500K+ credit lines? Just sayin'. 
@Revelate wrote:Net worth has little to do with one's behavior with regards to loan or credit card repayments.
Article didn't really mention anything else: it might not be a perfect system but there's a lot of data standing behind it.
Agreed, its not a perfect system and yes creditors will look at other factors such as income, % of payments vs income, length of work, length of residence and your stability, etc. when deciding whether to give you a mortgage or car loan.
However, we must remember that first and foremost, credit scores and their models exist to supply information to LENDERS. It is not primarily for people buying credit and most consumer credit scores exist simply for our education. When the article suggests that the scoring model is ridiculous, they are looking at it from the consumer's POV.
From our POV, there are various ways of gaming the system and artifically boosting your credit worthiness. For example, I have 6 credit cards - all with quite high credit limits. I never use or even come close to these limits but the fact that I have such a high level of available credit enters into their "equations" and when charges are entered it has the appearance of utilizing only 1-2% of the credit. But take away those high credit limits and the utilization drops drastically. 
Starting Score: EQ 732 October 2007; Current Score: EQ 839; TU 865, July 2022;