The whole credit score model is 'ridiculous'

[Revelate]

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@Anonymous wrote:

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@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.

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I'm not so sure about that. Even people with huge net worths can be forced to pay their debts by obtaining a Judgment, holding a Debtor's Examination and compelling them, under penalties of Perjury, to reveal where their attachable assets are. A person with no Net Worth either has no assets (attacheble or not) or is updside down on those assets. It is much easier to forced sale a house to get paid than to force an asset-less person with 0% utilization on his credit lines to take a cash advance from Visa to pay Mastercard. Given the choice between a debtor with a positive net worth and a debtor with no net worth, both of whom simply refuse to pay, which would you see more collection potential with?

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The very few billionaires I've met (all of two, not a large sample admittedly) and discussed the issue with had credit reports similar to my original one when I found this forum.

The fact is they just don't worry about such things as they're deemed irrelevant when you can pay cash for whatever late model supercar you want as an example... as you suggest, they're "low-risk" borrowers when they do take out loans as banks know they have assets they can chase (mostly); ultimately one's net worth does secure your personal liability, but that doesn't mean their payment behavior is better than average.

[Anonymous]

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@Anonymous wrote:

I totally agree! Our reports and scores should be made available for free to us on demand. They should also be locked by default and the consumer able to freeze and unfreeze our reports for no charge as well. It's insane that the fee's the charge to subscribe to their monitoring services when it is something they are already supposed to be doing. I also think some revison should be made in regards to the UTL of credit lines. If we have 12K and even use half of that we shouldn't be dinged unless we carry a balance over a period of time. They don't really seem to be able to capture those of us that use the accounts, let it report and PIF. While I understand the guidelines it still stinks only a percentage of our credit lines can be utlized without causing a score drop.

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I agree with above statement. FICO would be better off if we raised the Utilization requirements, 30 percent is too low in today's world. 30 percent might made sense 50 years ago when cost of living was much cheaper. I would propose 60 percent before credit score starts to ding or get rid of UTL entirely. There is a reason why creditors gave you $60,000 credit line for example but ( catch 22) cant use at least half of that without credit score dings. It's time for FICO reform to match realitically fit for today's world.