Credit Scores

[Anonymous]

I'm sick of the fact that some company can put out this FICO thing!!  Just because I choose not to get myself into debt, like the rest of America, and therefore don't have credit cards or loans that means that I'm at risk of not getting a loan, job, credit card etc!!!  If I don't have debt then that should make me creditworthy!!!!!  Also due to the fact that I have "bad credit" because I don't have credit cards, loans etc I have to try and find a "bad credit" loan which means a "hard hit" on my credit score which then lowers my score!!!!?????  I'm sick of being a # in America!!!  I have a name and a life and that is what should be used when determining if I qualify for a loan or a credit card, not FICO that doesn't know a thing about me!!!!  

[llecs]

Welcome to the forums!

And I agree with you! I agree that a number shouldn't define your borrowing-future. I agree that it is impersonal. I agree that your merits alone should determine whether or not you get a loan.

....however, just for a minute, pretend that FICO does not exist. Lenders still look at what is on your credit report with or without FICO. If you have nothing on your credit report, how do I know that you are a good potential borrower? How do I know if you were dishonest or not in cleaning up your bad history just to get a loan with me? How would I even know if you'd even pay me back?

You are right, FICO is just a number, but lenders focus on the other stuff that leads to that number. If you lack any sort of credit history, without FICO, you are automatically a "high-risk" borrower. Gone are the days that your word means something. I have family that recalls walking into the bank they don't even do business with and getting loan(s) with only a handshake and a signature because everybody's word used to mean something. No longer is that the case unfortunately.

So, as you walk in and borrow money, or whatever your aim was, they don't know if you are a good person. They can't see any proof of being a good person on your credit report.

I'm a firm believer that you should owe no man nothing except for your love. Thankfully, many of us on here know how to game the system and remain 100% positively and unequivocally debt free and still keep very high FICO scores. Not only would you have a high FICO score but your credit reports, the ones lenders use to judge you, will show a positive payment history by which to grant you a loan at a low rate. You'll find that many of us agree with you. Glad you are here.

[Anonymous]

Well obviously if I have NOTHING on my credit report then therefore I owe NO MONEY!!  Since I owe NO MONEY to anyone that would have reported me to the CB's then why wouldn't I be creditworthy?  Thats just my thing.  I am trying to purchase a car but since I'm looked at as owing no money and have no outstanding debit I'm denied over and over again.  Seems to me that if I were going to loan someone money I think I would chose the person (not the #) that owe little to no money vs. the person with many open accounts.  With No Credit History I am categorized as "high risk".  And not only to mention if I did have bad debit that I paid off to get a loan and my FICO score went up UUMMMM same concept, you don't know if I did that or not to get a loan, CORRECT????

A FICO score was created by the person that was out to make millions.  CR's work to show creditors what is actually owed or paid or if there is nothing at all owed.

I'm frustrated over the fact that when I'm looked at as "high risk" because I don't have an established credit history, I'm classified in the same group as someone that owes lots of money and/or has a bad payment history.  

The point, as far as I'm concerned, of a CR is so that the bank, finance company etc can see what is on yours.  But since the majority only look at the FICO score they don't have a clue that I OWE NO MONEY!!! 

You say you can stay debt free and keep your FICO score high but yet I am but I still have a small score.  When I can only apply and get a secured credit card to build my history because someone decided to come up with this FICO thing is discrimination against me and other like me that don't have a credit history but are in the same class as others that do have in true a bad credit history.

[MidnightVoice]

Have you tried your bank or Credit Union?  If you use a branch regularly they might be willing to help

[Anonymous]

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@Anonymous wrote:

Well obviously if I have NOTHING on my credit report then therefore I owe NO MONEY!!  Since I owe NO MONEY to anyone that would have reported me to the CB's then why wouldn't I be creditworthy?  Thats just my thing.  I am trying to purchase a car but since I'm looked at as owing no money and have no outstanding debit I'm denied over and over again.  Seems to me that if I were going to loan someone money I think I would chose the person (not the #) that owe little to no money vs. the person with many open accounts.  With No Credit History I am categorized as "high risk".  And not only to mention if I did have bad debit that I paid off to get a loan and my FICO score went up UUMMMM same concept, you don't know if I did that or not to get a loan, CORRECT????

A FICO score was created by the person that was out to make millions.  CR's work to show creditors what is actually owed or paid or if there is nothing at all owed.

I'm frustrated over the fact that when I'm looked at as "high risk" because I don't have an established credit history, I'm classified in the same group as someone that owes lots of money and/or has a bad payment history.  

The point, as far as I'm concerned, of a CR is so that the bank, finance company etc can see what is on yours.  But since the majority only look at the FICO score they don't have a clue that I OWE NO MONEY!!! 

You say you can stay debt free and keep your FICO score high but yet I am but I still have a small score.  When I can only apply and get a secured credit card to build my history because someone decided to come up with this FICO thing is discrimination against me and other like me that don't have a credit history but are in the same class as others that do have in true a bad credit history.

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I disagree with the bold.  You're classified the same way as any other person who hasn't proved themself credit worth for any reason, including not building a credit history.  Based on the second sentence in your original post, it sounds like you think credit cards = automatic debt.  I completely disagree as a lot of people use credit cards to their advantage - cash back, air miles, establishing a good credit history, etc - instead of putting themselves in debt just because AMEX gives them a $20k credit limit.

FICO isn't discriminatory at all.  Your score is based on nothing more than how you have handled your money/credit and the way your scores are calculated is actually fairly transparent.  

You aren't in the same boat as someone with a bad history, you (from the looks of it) have no history, which isn't as good as someone with a spotless 20 year history, but at least you aren't in a hole as so many of us here are or have been.  

Be thankful that you came across this website early in your credit life!

[Anonymous]

Also, try to see it from the lenders pov.  IMO there are 3 types of borrowers:

1.  People who borrow and, at the very least, follow their repayment schedule.

2.  People who borrow and are late or don't pay back at all.

3.  People, like you, who have yet to establish themselves as Person 1 or Person 2.

From the lenders pov, Person 3 is potentially an extreme Person 2, someone who just borrows and borrows but never pays back.  Person 2 at least has some history of other lenders giving them a chance for whatever reason, maybe because they have paid on time and in full but due to unfortunate circumstances have fallen behind on their payments or accrued unavoidable amounts of debt.  As Person 3 all you have to do is establish yourself as a Person 1, even if you have to start with secured cards only.  Person 2 not only has to start being a Person 1, but they also have to explain or pay for their old habits and mistakes everytime they apply for any sort of credit.

[llecs]

Ignore FICO since FICO scores based on what is on your credit report. In fact, lenders look at the content of your credit report over any score. You can have a high score and still get denied because of what is on your credit report.

If you lack any sort of history on your credit report, how would I know, as a lender, that you are a good borrower? You cannot prove to me on your credit report that you can repay the loan. Do you see where I am driving at? Those auto lenders are unsure about your ability to pay if there is a lack of a history. If I was a lender, I'd rather see ongoing payments, a low to no debt-load, and a positive history if I were to loan money. Without any history to prove that you can be responsible, then you would be seen as a high risk borrower. BTW, again, I'm not saying that's fair. But too many people out there have defaulted and skipped out on their payments, whether on purpose or no fault on their own, and it hurts all of us.

If nothing is on your credit report, you do not have a FICO score. The only way a FICO is generated is if open accounts are reporting, of which you are making ongoing payments. I take it your goal is to remain debt-free other than the car, right? What many have done is to open a secured credit card, as you mentioned, and let that report. The limit does not matter per FICO scoring. Let that report and pay in full monthly. Remain debt free and pay no interest on it. In time, a FICO score will be generated. A very nice one in fact. And if you have any old, closed and positive accounts showing, then your score will factor in those accounts too and your score will be even higher. Even with that one card, I bet your scores would be in the low 700s in no time at all, assuming you don't have any old bad accounts reporting from the past. Just use that one card every 3-4 months for a pack of gum or cup of coffee just to keep it active and pay in full.

Now that one card alone might not result in an approval. You'd have a nice score but as mentioned, they look at the content of your report over the score. But one reported secured card goes a long way.

[Anonymous]

I'm not trying to argue your point, I'm just arguing that fact that I'm treated like someone that doesn't pay their bills.  I have had plenty of utilities bills in my name, all in good standing, but not once have I seen those reported.  So I start just like as if I was getting out of high school and getting on my own and getting a secured credit card or co-signer (which who can find one of those these days???).  Its just frustrating that they look at a # and not what is actually on my report.  We all pay the price due to the banks and finance companys lending out to anyone and they didn't care about a report or #, guess I should have jumped in the band wagon when everyone else did. 

[Anonymous]

Welcome aboard, fedupwithFICO!

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@Anonymous wrote:

I'm not trying to argue your point, I'm just arguing that fact that I'm treated like someone that doesn't pay their bills.  I have had plenty of utilities bills in my name, all in good standing, but not once have I seen those reported.  So I start just like as if I was getting out of high school and getting on my own and getting a secured credit card or co-signer (which who can find one of those these days???).  Its just frustrating that they look at a # and not what is actually on my report.  We all pay the price due to the banks and finance companys lending out to anyone and they didn't care about a report or #, guess I should have jumped in the band wagon when everyone else did. 

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It sounds as though, from what you've shared, that the problem is not your FICO score (or lack thereof), but a lack of reported credit history-- positive tradelines. Fortunately, that's fixable!

It is admirable, and even wise, to live a debt-free existence. The only real downfall is if, by extension, you live off of the credit grid. If a time should come when you want to finance someting, things can start to get painful. It sounds like this is the situation that you've found yourself in. <-- I wish that we'd all gotten a more realistic introduction to the personal finance and the credit landscape as high schoolers, then we'd understand the nuances of credit. And that credit does not, by default, equal debt. Managed carefully, credit is a tool that can make our financial lives a lot more convenient.

The good news is that time heals in the world of credit. If you stick around, and do some reading, you'll find that there are steps that you can take to build a positive credit history without getting yourself into undesirable debt. Alternatively, credit isn't compulsory. Your financial life can be just fine without credit as well. But, if you're thinking of doing any financing, I'd forgo a creditless existence, and opt for the 'credit without debt' avenue.

I hope you hang around!

[MidnightVoice]

Have you tried the bank or Credit Union you use?