Credit scores. What a scam!

[Anonymous]

Ok. I have been doing this for almost 4 years. Watched the ups and downs. Seen what has effects. Recently I sold some property and used 20k to pay off debt. You know what happened? Hardly anything. I pay off $5,000 and 6,000 dollars and I generously am given 11 to 13 points. I have open accounts now with zero balance. No late payments no collections. Low usage. Nothing. BUT

i use my amazon card and my balance increases by $140 and they take 11 points? Seriously? The whole system is a scam. Lenders  have dozens and dozens of reasons to say no if they  want to. I expected to go from good to excellent with all the pay down because prior to that the whole reasons given for not having a higher score was the credit usage.  When there isn’t that, it’s like a lull  for adding points. Nothing until I use amazon then alerts start happening. Scam. The whole thing

[Anonymous]

It may feel frustrating but it's simply math.
There are algorithms for scoring that come into play. Frustrating? Maybe, but, logical all the same.

[Anonymous]

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@Anonymous wrote:

Scam. The whole thing

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It's really not.  You're definitely speaking from frustration rather than a clear head.  I'd recommend doing some more reading on the forum as far as the ingredients that go into a Fico score and how changes to those ingredients can increase or decrease a score.  Everything is very profile-specific, so what could cause a 11 point drop on one file may cause a 0 point change on another, or something that causes a 10 point gain on one file may have no bearing on another. 

A score is designed to try and assign a number as far as one's risk of default.  Minor fluctuations of 10 points up, 10 points down etc. are not going to dramatically change someone's risk of default.  Moving from "good" to "excellent" isn't a thing either, as those are just fluff terms that attempt to simplify things.  "Excellent" really is whatever score is needed to achieve a credit product under the best terms from any given lender.  That being said, it of course will vary from lender to lender, so a blanket statement can't be made that X credit score is whatever word (good, fair, excellent, etc) that you want to call it or that CMS front-end software assigns to it.

Again, read a lot and your views will change.  I shared some of your current views when I first found the forum and over time of coming to understand Fico scoring reasonably well I believe that it's overall a solid system.  Are there some quirks and opportunities?  Sure, as there are with anything in life.  I'm sure future models (Fico 10 etc) will work toward resolving some of the issues, but for now current models do a fine job of helping lenders predict risk.  There's definitely no scam going on, that's for sure.

[GApeachy]

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@Anonymous wrote:

 I have open accounts now with zero balance.

i use my amazon card and my balance increases by $140 and they take 11 points?

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Yes, it's frustrating alright.  You say "increases by"

Was your amazon card one of the accts. at zero balance or did you have a balance on it before the $140 charge?  If you had a bal on it what % was it sitting at before the $140 charge vs. % after $140 charge? 

[Anonymous]

The alerts from myFICO can be misleading.    

Depending on the utilization of whatever you paid down and your limits, your scores may not move at all. 

If you want help to see where the point loss may or point gains may have occured, you'll have to give the people here more info.  This includes what you have paid down, what the limits and current balances are on ALL of your cards, and any info such as inquiries/new accounts/etc.

[Anonymous]

That's right.  It's all very profile specific.

Cornelius could pay down $10,000 in revolving debt, the new balance(s) report and his FICO scores don't move a single point.

Rupert on the other hand could pay down $750 in revolving debt, the new balance(s) report and his FICO scores go up 60 points. 

While the above may sound like it makes no sense, specific to their profiles it can make perfect sense when you understand how utilization works.

[Anonymous]

What a crock!   You guys think you can really BS people with this "it makes perfect sense--you just don't understand nonsense?"
I'm a 64 year old life long corporate warrior.   I understand budgets, finance and how corporate process segments impact their market approaches.  But let me be clear--I've NEVER seen anyone who could make sense of the FICO systems.
They are a self serving method for lenders to charge additional fees and interest rates-- PERIOD.
The FICO score has no predictive ability whatsoever--I defy you to show me a single instance where the FICO score predicted accurately a borrowers' risk of not paying.

In fact, it is statistically true that 99% of borrowers will pay on time without default-- with the more accurate predictor of not paying being a medical emergency, Negative life event such as divorce or disability or loss of a job during a downturn.
Your FICO score has NO way of seeing any of those events coming---it's not, for instance, keyed to general market risk of a recession and it has no idea of your relative health or your marriage stability.    It is a scam tool that is used to extort more interest and fees--  but it is integral to the Rigged System that is banking and finance in the Corrupted USA today.
When y'all respond that I am too cynical and that i'm just not educated enough to understand-- answer these questions before you opine to me on this topic-
a.  What is the difference in treatment between a business entity and a personal individual credit report?

         Answer-- the most notable difference is that multiple late payments or collections fewer than 5 in a 24 month period do NOTHING to lower a business credit score-- while similar late pays/collections would move a personal score to near O;  Similarly a bankruptcy or a foreclosure on your personal credit marks you as un-creditworthy for a decade-- but a business?  almost no impact at all-- in fact, debtors in possession as corporate entities get sweetheart interest rates because the judge will force payment.  And after discharge-- the business simply shuts down and re-incorporates as abc new corporation-- and they start off their week with a new clean bill of health from the credit agencies.  Now don't you try changing your name or SSN-- that's criminal fraud--but for a corporation-- bankruptcy is just part of the cost of doing business.

b.  How does one differentiate between a thief running a corporation-- and a thief living down the hall?

The thief living down the hall is personally accountable for his bad debts and late payments,  the corporation-- not a bit accountable.

Again--the whole system is rigged to make it easy for corporations to screw average Americans-- wake-up -- and start building guillotines if you want to see how to make this system fair again---get rid of all the insurance, banking and finance honchos--and we can start having a real system again---

[GApeachy]

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@Anonymous wrote:

What a crock!   You guys think you can really BS people with this "it makes perfect sense--you just don't understand nonsense?"

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@Anonymous wrote:
wake-up -- and start building guillotines if you want to see how to make this system fair again---get rid of all the insurance, banking and finance honchos--and we can start having a real system again---

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Where should we put them?

[SEAlifer]

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@Anonymous wrote:

What a crock!   You guys think you can really BS people with this "it makes perfect sense--you just don't understand nonsense?"
I'm a 64 year old life long corporate warrior.   I understand budgets, finance and how corporate process segments impact their market approaches.  But let me be clear--I've NEVER seen anyone who could make sense of the FICO systems.
They are a self serving method for lenders to charge additional fees and interest rates-- PERIOD.
The FICO score has no predictive ability whatsoever--I defy you to show me a single instance where the FICO score predicted accurately a borrowers' risk of not paying.

In fact, it is statistically true that 99% of borrowers will pay on time without default-- with the more accurate predictor of not paying being a medical emergency, Negative life event such as divorce or disability or loss of a job during a downturn.
Your FICO score has NO way of seeing any of those events coming---it's not, for instance, keyed to general market risk of a recession and it has no idea of your relative health or your marriage stability.    It is a scam tool that is used to extort more interest and fees--  but it is integral to the Rigged System that is banking and finance in the Corrupted USA today.
When y'all respond that I am too cynical and that i'm just not educated enough to understand-- answer these questions before you opine to me on this topic-
a.  What is the difference in treatment between a business entity and a personal individual credit report?

         Answer-- the most notable difference is that multiple late payments or collections fewer than 5 in a 24 month period do NOTHING to lower a business credit score-- while similar late pays/collections would move a personal score to near O;  Similarly a bankruptcy or a foreclosure on your personal credit marks you as un-creditworthy for a decade-- but a business?  almost no impact at all-- in fact, debtors in possession as corporate entities get sweetheart interest rates because the judge will force payment.  And after discharge-- the business simply shuts down and re-incorporates as abc new corporation-- and they start off their week with a new clean bill of health from the credit agencies.  Now don't you try changing your name or SSN-- that's criminal fraud--but for a corporation-- bankruptcy is just part of the cost of doing business.

b.  How does one differentiate between a thief running a corporation-- and a thief living down the hall?

The thief living down the hall is personally accountable for his bad debts and late payments,  the corporation-- not a bit accountable.

Again--the whole system is rigged to make it easy for corporations to screw average Americans-- wake-up -- and start building guillotines if you want to see how to make this system fair again---get rid of all the insurance, banking and finance honchos--and we can start having a real system again---

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I was with you until you got to the guillotines. We could just have more banking regulations, jeez!

[Anonymous]

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@Anonymous wrote:

The FICO score has no predictive ability whatsoever--I defy you to show me a single instance where the FICO score predicted accurately a borrowers' risk of not paying.

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I gave up on your reply with that statement.  The entire point of the Fico system is to attempt to predict risk of default.  While the system isn't perfect by any means, there's no way you can tell me that a group of (say) 10,000 individuals with Fico scores in the 550-600 range are of equal risk of default as a group of 10,000 other individuals with Fico scores in the 750-800 range.  Just the fact that we're talking scores in the 550-600 range means that they have negative information present on their report.  Those with negatives present historically are more likely to be late again than those that haven't ever been late, so right there your argument falls short.  I'd also like to see you link some references to some of the things you say, as from my perspective they are just [your] opinions stated as fact.