FICO is unfair...

[Anonymous]

Fico scoring is unfair and frustrating for me. Over 2 yrs ago, I paid off all my credit cards. My credit score mix now includes my mortgage, student loans and I have several credit cards. Since I paid off the cc's, I typically PIF when the statement hits me in the mail. On some months I pay 50% of the balance if I charge a larger amount. Since I'm suppose to show usage on the cc's, I don't see a problem doing this. What frustrates me most is when I get a Fico score alert saying I have a drop in my score because of a balance increase. For example your balance increased 143% from $0 to $44 on a card with a $3k limit. Why the hell should I lose 5 points for having a $44 balance on a cc??? I've been on this board for quite some time so I know that your score goes up ever so slowly but can drop faster than adead bird in the sky. It just seems unfair. I keep every card usually under 10% utilization for months at a time, all cards as a whole under 30% and haven't seen that much in the way of score increases. My score isn't the worst but hell, I think it should be moving alittle quicker than it is. Some months I go without spending much of anything and get a monthly fico alert saying NO CHANGE in your fico this month. This really is discouraging!!! Does anyone else feel my pain on this or am I a lone wolf on an island. Or maybe someone can tell me what the hell I'm doing wrong.

[llecs]

Try this-

Make sure all balances report on your CR under 10% for each individual card and total cumulative as well. EQ showed my last report at 27% total. Not great, but not bad. EQ said it was a bad thing to have it that high.

Study your history more. Maybe there's a baddie or a late that's stopping you from growing like you'd like to.

[Junejer]

How many open accounts do you have? Mtg, car loan, CCs, etc. Keep the total accounts with balances at less than 50%.

[haulingthescoreup]

Agree --it might be that the card that reported a $44 balance made "too many" cards with balances, even if you didn't get that actual flag.

Try for as many cards as possible PIF'd. If you have one or two with larger CL's on them, let them show under 10%, or even under 5% balances.

And for those who understandably don't have that much time, this is because it sounds like you're headed for a mortgage.

[Anonymous]

I have about 5 cc's with total CL's around 30k, I think I use about 2 of those pretty regularly. Like Amex for the rewards and 1 credit union visa. My mortgage is really high (over 400k), and I have high student loan debt, which fico says is too high, but it's been in deferrment for a long time and I just started paying on the student loans 3 months ago. My monthly amex bill runs about $1000, so I can get the mileage on that card, we put most of our monthly expenses on that card. But amex has been nice to us, they hardly report. It's the other cards that pretty much stay at zero, which I might use once in a blue moon that report such small balances like $44 or $105 that keep lowering my score. Occasionally I'll use those cards if a merchant doesn't take amex or if I think I'm near going over 10% on my amex. It's like I'm responsible for a few months, see no score increase, just holding steady, then I use a mc or visa and get dinged 5 or so pts for a small balance. I just don't get it!

[Anonymous]

I think in general (personal opinion) the point of Fico is to legally lower your score, raise your APRs and generate interest fees for creditors.

The whole 'bucket' thing really confirms that. It makes it very hard for people to increase their credit (IMHO) as it punishes people with good credit by penalizing them unduly for things that people with worse credit don't get penalized with. Oh, I understand the concept; 'people in your bracket don't have 30 day lates' but if you are going to only charge a person with average credit (and higher APRs) 5 points for their 30 day late, how can you justify penalizing a person with a 750 30 points? They'd say it is because the 30 days late in uncharacteristic and an 'indicator' but that is nonsense; it is to justify getting the low APR customer down as fast as possible. The only thing that is an indicator of bad credit is bad credit whether you are a 500 or an 800.

It is all a big (expensive) game and IMHO any trick in the book you can take to make it work for you is fair. Otherwise it is money being stolen from you. Can't really see how a system where you borrow money at one rate and then are gamed to get the rate on the money you borrowed to double or triple can be seen as anything but a scam.

[marty56]

They funny thing is that being late on a CC payment is the only crime I know of where they are allowed to presume they reason why you did something (or didn't do in this case) and what you are planning to do (or not do in the future).

Is it Marty just forgot to make the online payment or is Marty heading down the road to financial doom?

I think the FICO concept is great.  Its the CCCs and CAs that use the system to harm people or not.

[Junejer]

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@Anonymous wrote:
I think in general (personal opinion) the point of Fico is to legally lower your score, raise your APRs and generate interest fees for creditors.

The whole 'bucket' thing really confirms that. It makes it very hard for people to increase their credit (IMHO) as it punishes people with good credit by penalizing them unduly for things that people with worse credit don't get penalized with. Oh, I understand the concept; 'people in your bracket don't have 30 day lates' but if you are going to only charge a person with average credit (and higher APRs) 5 points for their 30 day late, how can you justify penalizing a person with a 750 30 points? They'd say it is because the 30 days late in uncharacteristic and an 'indicator' but that is nonsense; it is to justify getting the low APR customer down as fast as possible. The only thing that is an indicator of bad credit is bad credit whether you are a 500 or an 800.

It is all a big (expensive) game and IMHO any trick in the book you can take to make it work for you is fair. Otherwise it is money being stolen from you. Can't really see how a system where you borrow money at one rate and then are gamed to get the rate on the money you borrowed to double or triple can be seen as anything but a scam.

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nycc, in defense of the buckets; if we didn't have them, then people with 500s would be compared to people with 800s and would be getting killed. They would never get above the 500s. The rationale is that people with 500s already have enough cr@p killing their scores, much more egregious than a 30 day late.

[Anonymous]

hi all i am kinda new to this forum.i have Ben doing a lot of reading these past few weeks on scoring and reports.my husband is in the car bizz and i get a chance to read a lot of credit reports and scores.the scoring system defiantly is very strange to the point that we basically make our own decision wether or not to finance for someone or not the reason i say this is because you look at these reports and the scores that go with them and it doesn't make sense sometimes example just today someone came in and wanted to be financed by us so we did our credit check she had 3pages of all collection and charge offs and her score was 551 to me it should have ben alot lower because most of these were recent and old to but like from 99 to 08 with about 25 of them for the past year and not one good account .even with auto scoring there is something wrong with this picture think all this scoring stuff is a bunch of hot air deffantly for Apr's.i had someone else come in and had a less score and they only had 1 charge off from 06 and they had  some credit cards a morgage never late on morgage and did have a few lates on there cards and there score was 28points less i no they say every report is different but iam going with the person that has a morgage

[Anonymous]

Wow jenifer, that has to be the longest sentence I've ever read.

Interesting post. Thanks and welcome to the forum!