The Futility of Trying to Improve FICO

[Anonymous]

Dude, you've got like several major (large) black marks on your report. Two new positives doesn't outweigh that -- and it shouldn't. It's not going to heal overnight. You didn't get into this mess overnight, and it's not going to resolve quickly, either.

Six months is really only a beginning. FICO is a predictor of default risk over the next two years -- and you don't have two years of positives to show right now. For that reason, the negatives should weigh more. I'm sorry that's not what you want to hear.

My scores are up an average of 120 points, but it took a lot of work to get there.

Many lenders won't approve you with unpaid chargeoffs (at least not for a real card), especially if the chargeoff is larger than some nominal amount ($500 is a commonly-mentioned limit). When I paid my last chargeoff (and all of mine were less than $500), I started getting real approvals.

I'm guessing the unpaid baddies will keep you from getting upgraded by BofA indefinitely, regardless of your score -- especially now that MBNA's in charge.

[Anonymous]

The negatives are charge-offs from $126 to $394, totalling less than a thousand dollars.  One of the chargeoffs is paid with a balance of zero...I was just about a week too late to stop it from charging off.

From what you all I saying, I've made the right choice to just leave all this behind and start fresh somewhere else.  If they're never going to approve me for any credit line increases, then my credit score will never rise...and of course if it never rises, I'll never get approved for anything.  It's an endless loop, with no way out.

It's a shame the system hosed my life here in America over less than a thousand dollars, but these are the times we live in.  I'll be sending my fiance my resume so she can start shopping it.  When I find something, I'll be making the final preparations.

[Anonymous]

Just because the amounts are in the hundreds doesn't make you a good risk. The primary thing a creditor cares about is that you're not going to default on your agreement with them, and a charge off is one of the worst ways to do that.

Just put yourself in a lender's shoes, and see how you would feel about lending money to someone who charged off 300, or who charged off 600, all around the same amoutn of time ago. Personally, I don't think it really matters in this case - granted there is some difference depending on the magnitude, but if you can't pay back several hundred... Plus, about the only a week too late excuse, do remember that this doesn't happen the second you're past due. Generally a charge off means you're late over several months (not necessarily saying this was your case, but from a radnom person looking at your report, this is likely what they will think).

It will take time, and as mentioned before a couple of good things do not balance out a couple of bad things. And your score will rise just fine without CLI's. Good on time payments for a long time, even on a very small limit, are still good things. Plus eventually the charge offs will drop off the report.

Message Edited by okrogius on 03-26-2007 05:02 AM

Message Edited by okrogius on 03-26-2007 05:04 AM

[Anonymous]

If it's such a small amount, and they keep re-reporting it anyway, why don't you just pay them off, or settle them at least?  Then, they'll start going away and you can rebuild.  Why do you think it will be so easy to buy a home overseas...do they not care what your credit history is over there? 

[Anonymous]

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@Anonymous wrote:

Just because the amounts are in the hundreds doesn't make you a good risk.
...
Good on time payments for a long time, even on a very small limit, are still good things. Plus eventually the charge offs will drop off the report.

Message Edited by okrogius on 03-26-2007 05:02 AM

Message Edited by okrogius on 03-26-2007 05:04 AM

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Well, I'm in my late thirties now, and don't care to wait around until I'm 60 or so to be able to buy a house and have some of the better things in life. I'm not going to live in apartments the rest of my life because I had a couple bad years.

If I save up my money, in six months to a year I can be out of here, and where I'm going I can build a house on a beach on half an acre of land for around US$50,000. And no one's going to check my FICO...if you're an American with a college degree and some IT experience, you can write your own ticket.

[Anonymous]

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@Anonymous wrote:

If it's such a small amount, and they keep re-reporting it anyway, why don't you just pay them off, or settle them at least? Then, they'll start going away and you can rebuild. Why do you think it will be so easy to buy a home overseas...do they not care what your credit history is over there?

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They don't care about FICO; where I'm going isn't a U.S. satellite.

And even if I pay the charge-offs, they won't "go away." Odds are the collection agencies won't even change my listings on my credit report...I'll probably have to chase them and get lawyers on them and even if anything changes it will take years. And even then, all that happens is the debt gets the tagline "paid charge-off." FICO doesn't care...all FICO cares about is that you made a mistake and by God we'll rub your nose in it for seven to ten years.

[Anonymous]

New World, I don't mean to be blunt but you seem to be the only person on this board who is unable to improve their FICO score.  I've seen posts from folks with past liens, bankruptcy, collections and chargeoffs.  Through time and dilligence all have made improvement.  New World man its not that its futile to try and improve your scores, the simple fact of the matter is that you have to work to do so.  That's the part you don't really seem to want to do.

Pay them off, they will stop updating every month.  This creditor lent you money in good faith and is well within its right to continue to try to collect that money within the law.  If that means letting you see with your own two eyes that they will do whatever it takes to prevent you from securing new creidt until they are paid, that is what they will do.  I know I would.  That is the penalty built into the system.

Again I ask that you please stop discouraging people who really WANT to do the work just because you are unwilling to.

[Anonymous]

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@Anonymous wrote:

New World, I don't mean to be blunt but you seem to be the only person on this board who is unable to improve their FICO score. I've seen posts from folks with past liens, bankruptcy, collections and chargeoffs. Through time and dilligence all have made improvement. New World man its not that its futile to try and improve your scores, the simple fact of the matter is that you have to work to do so. That's the part you don't really seem to want to do.

Pay them off, they will stop updating every month. This creditor lent you money in good faith and is well within its right to continue to try to collect that money within the law. If that means letting you see with your own two eyes that they will do whatever it takes to prevent you from securing new creidt until they are paid, that is what they will do. I know I would. That is the penalty built into the system.

Again I ask that you please stop discouraging people who really WANT to do the work just because you are unwilling to.

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I'm just a hardnosed realist, not an idealist. Sorry if that rubs you the wrong way.

For the past four months, I've been paying every bill on time, my credit utilization is down from 99% to around 40%, and guess what? My FICO score has actually DECLINED a point.

So tell me what sort of conclusion I'm supposed to draw from that. I go by hard numbers, not "ought-to-bes" or wishful thinking. I concur with Robert Heinlein, if it can be expressed in figures it's fact, otherwise it's opinion.

I'm not going to stop "discouraging" people; I'm going to continue to report the facts as I observe them. If that's a contrarian view, then too bad. The fact is, FICO doesn't care whether a debt like my charge-offs is paid or not. I've observed that, read testimony on countless boards as well as from a couple friends of mine. Whether I pay or don't pay, I'm hosed for the foreseeable future. So rather than spit into the wind, I'm relocating.

[Anonymous]

So, you've shown that for two years you aren't willing to pay your bills, and for four months you've been willing to pay a couple of them -- and you think that should give you a pass for a high score?

The fact is, the failure to pay bills is what caused the score drop, and FICO scores don't care about the reason you failed to pay your bills, only that you did. Most people would have more than $1000 in savings to cover those bills before they charged off. (Believe me, I learned my own lesson on that, so I'm not trying to give you a hard time. I've been there.)

Even without report changes, FICO scores do fluctuate a bit. Not much, granted, but a few points here and there. People move about in pools.

It sounds to me like you're still fundamentally not taking responsibility for your financial situation and instead blaming it on FICO.

It's getting to the point in our global economy where credit does follow you from the US to other countries, as people have discovered to their dismay. Experian, after all, is based in the UK these days. So don't be surprised if your existing chargeoffs mean you can't establish credit in a new country. Their credit reporting laws may be different, and you may suddenly find that chargeoff sticks around for fifteen years -- or twenty.

I do hope you don't intend to stiff the creditors who gave you a second chance when you move.

[Anonymous]

Well, your so-called "facts" are nothing but conspiracy theory and bitter complaining in an attempt to bring other people down to make yourself feel better.  You can't expect years worth of poor money management to disappear because you've made payments on a $300 secured credit card for less than a year. 

I've spent a lot of time on the creditboards forum.  I watch people's scores rise.  It can be done.  If you can't post anything helpful, or take rebuilding your credit seriously, I don't know why you're even posting here.