Your age of accounts is taken into account by FICO. You have no valid complaint regarding these points, and they are irrelevant to your arguments.
just_curious wrote:I have credit lines totaling well over $200K on my CCs, plus two more without limits. Many open 15+ years, one well over 30.
just_curious wrote:I pay every card, every month well before the due date, no matter what the amount owed (and it is never a strain on the checking account).
cheddar wrote:just_curious,With all due respect, here is what you are missing, in my opinion.
You are a greater risk in that respect than someone who doesn't charge up their cards and PIF them every month.The fact remains that those who use their cards heavily represent a greater risk than those who do not.
just_curious wrote:Ability to pay [which is indirectly reflected in the payment history] matters too, actually.
Default rates imposed for late payments, exceeding credit limits and bounced payment checks typically are levied on cardholders with poor credit scores, often incrementally. But state banking regulators and watchdog groups report a growing number of complaints of maximum default rates being imposed on erring customers with above-average credit scores of 700 and higher. They has been a growing trend to go go after even the higher past FICO scorers, using their high scores to suck them in, and then using anything in their arsenal to jack up their rates for any pimple on their record, no matter how small. Yes, They understand and love the game that they support!
The tighter rein on credit-card debtors comes amid heightened scrutiny in Congress of suspect industry practices. Lawmakers fear wary lenders will resort in the months ahead to "hair-trigger repricing" of interest rates on cardholder's existing balances at the least provocation. "We find it totally unfair that if you're one day late, you get hit with a 30%-plus interest rate," said Linda Sherry, director of national priorities for Consumer Action. "There's been a pervasive attitude of hands-off the industry because we don't want to tinker with the marketplace, but some of its practices are just patently wrong."
"Some issuers are pointing to the hits they've taken from the subprime mortgage fallout as a reason Congress shouldn't regulate the credit-card industry," said U.S. Rep. Carolyn Maloney, D-N.Y., chair of the House Subcommittee on Financial Institutions and Consumer Credit. But "the hands-off approach prior Congresses have taken to this industry has spawned unfair practices that hurt consumers, including hair-trigger repricing."
In a bid to forestall tighter regulation, leading card issuers Citibank and Chase declared this year they'd abandon highly criticized "universal default" policies. Under that practice, banks boost a cardholder's interest rate for delinquencies on outside accounts or a drop in their credit score even if they have a flawless payment record on that lender's account.
Consumer advocates said the banks made that concession knowing they'll need to take a harder line with customers as delinquencies rise and would face intense heat in Congress if they sharply hiked rates for so-called "off us" activity.
Citibank, which dropped universal default in March, declined to disclose whether it is since hiking late payers to maximum default rates more often or swiftly. "We reprice to our default rate only a very small portion of customers," spokesman Sam Wang said.
The decline in Americans' home equity due to slumping real-estate values is limiting cardholders' ability to pay off higher-interest credit-card debt with home-equity loans. As that resource becomes unavailable to more borrowers, experts say, lenders are taking aggressive measures to limit their exposure on unsecured credit-card debt.
Credit-card lending is the riskiest personal debt for banks to hold because, unlike mortgages or car loans, it's not secured by collateralized real property they can seize if borrowers fail to make payments.
But credit card lenders have learned that low introductory and balance transfer rates, often touted to consumers as their "privilege" for having secured a high credit score, are effective means for inticing customers to aborb higher debt, with the hope them them, the credit card company, that the consumer will then either not pay what was lent within the intro period, or better yet for them, will miss a payment with someone that will allow them to then cancel the lower rate, and jack up the screw, to astronomical rates, and great profits!
Yes, Virginia, they know who Santa Claus is!
Basically, FICO is a statistical analysis, and does not (and cannot) treat individuals as individuals. 30 plus years of perfect payments is only 7 years - only the last 7 years are counted in the score. 35% of the FICO score is utilization of of available credit. Income is NOT a factor - FICO does not know your income.
The above seems contradictory:
One thing I would like for you to clarify isthe 7 years that you were talking about with credit. I believe you said that fico only looks into the your history for 7 years however it seems contradictory in that the length of credit history is a big factor in credit scoring so how can you uphold this statement as an absolute truth.please explain.