@Anonymous wrote:
@Anonymous wrote:Does "cash" for you mean actual physical pieces of green paper issued by the Treasury Dept? Just curious... want to make sure I am understanding you rightly.
"Cash" means funds not derived from any debt mechanism, CC's, loans, etc. Accomplishing the necessities of life in this manner necessarily means that you are living within your means, not that this is impossible with credit cards as well. We are punished by this mysterious scoring mechanism for not using credit AND using more than a very small amount. We are then punished by lenders for using very small amounts AND no amounts of credit. I strongly maintain that any scoring system that considers one more credit worthy and rewards scoring for paying a $5 Netflix charge on one CC is seriously suspect.
@Anonymous wrote:It's certainly true that if a person refuses to have any credit accounts (in particular at least one credit card) then the current structure of life in the US (and probably any First World democracy) will be a bit more challenging for him than if he does not. It's easier to rent a car if you have a credit card, it's easier to get a mortgage if you have one, etc.
Ah and that's the crux of it. How extraordinary that our lives necessarily must revolve around this mysterious score, whose data validity can only be accepted by belief, seeing as how basic tasks are nearly impossible without pulling yourself into the credit and scoring system. And how ridiculous it is that consumers are then punished by this same system when "issues" in the financial sector put them in positions of insolvency.
The cherry on top is beyond simply being approved or not, this magic score determines the great cash cow, interest rates. I wonder how much the TBTF banks made on people post 2008 whose FICO suffered due to the recession in massive interest rate increases? Well, it was justified by their FICO score, I know...
You can exist with cash only, if you don't want to get out and participate in society. But let's look at a hypothetical.
You want to get on an airplane in a small US city, and fly to London England for a week of sightseeing. With a credit card (even one that charges FTF) you can pay the Lyft / Uber / Cab driver to get you to the airport. You have no idea where the driver came from, or where they go after you get out of the vehicle, but they are happy to help you out, for a fee.
You buy, online, an airline ticket for an agreed price, and pay with your credit card. The airline greets you with a smile, and sees that you get to your destination, even if there are three hops to arrive in London.
In London, you have pre-arranged a hotel where a room is reserved in your name for a known price for x number of nights. How cool is that?
From the London airport you are able to hail a cab (again you have no idea who the person is, in some cities they don't even speak your language) and get to the hotel.
Hungry? Walk down the street and ask for a restauranteur to feed you, for a small fee. She / he is happy to do so, and you walk out the door never to see them again.
At the end of your trip, the airline is waiting for you, and gets you back to your home airport.
Your bank credit card has recorded all these costs, based on your contract you agreed, to pay the amount at some point in the future, either all now, or over time. This credit card was given to you based on a quick look the bank had, based primarily on your FICO score, that told the bank how likely you were to pay off the account. This is based, of course, on your history of paying other creditors on time. Even if, at the time you applied, you had all credit cards at zero balance, that scoring penalty is not likely to be sufficient to prevent you getting a credit card, as long as you have always paid on time.
If, however, the card applicant had missed three payments in the last year for 30 days, and another payment for 120 days, would the bank, on seeing the ~600 FICO score, be unjustified in holding back the granting of credit? Or, alternatively, because the cardholder made their last two payments, the bank should take that into account and just give the card applicant a $30,000 credit line?
Many of the situations you are using to say FICO is a scam, are based on cardholders choosing to carry a balance and incur interest costs. That is a choice of the person to how they want to use credit. The only absolute in credit is, always pay at least the minimum on time. Everything else is a choice in how to use credit. There are indeed some impacts to FICO score of these credit choices, but nothing so severe as missing payments.
The other point I would like to raise, if you don't think FICO is appropriate, then tell us how you would arrange a measure of millions of individual consumers, to measure their credit worthiness, and supply that information efficiently to thousands of banks around the country so that those banks can make credit-granting decisions. CGID and BBS are proposing minor improvements to the FICO algorithm, based on areas that might realistically be measured.
But if you really don't believe FICO should be used, then you really do have to come up with an alternative, and show how it would work. Otherwise, a large share of consumer activity would be limited. No pressure 
