As a tool for creditors to judge risk of potential customers, the scoring system can't just be skewed to improve everyone's scores. The system would just be unusable then.
What I'm asking is:
"In what ways could positive changes be made to improve the accuracy of your score to show the risk you present to a prospective creditor?"
I see three ways that the system could be changed to make it much more effective as a measure of risk to the creditors:
1. Require CCC's to provide two balance numbers when they report. The first is the statement balance they report now when it posts. The second would be that portion of the statement balance that is carried over from the previous statement. This would allow CRA's to judge utilization and debt based on the balance you carry month to month as opposed to the amount you PIF each month. This would make paying down your account prior to the statement posting to improve your score unnecessary. But it would be a more accurate measure of risk because CCC's can see that you PIF and don't carry balances forward while still seeing that you use your cards.
2. Eliminate the effect that having any balance on more than one card lowers your credit score. Given that not all credit cards are accepted everywhere, it is not unreasonable to use more than one at a time. I have to use either my Discover or my Visa when my AMEX isn't accepted at a store. As I always PIF and my Util is less than 10%, I don't think that using more than one CC makes me more of a risk. If anything, proving that I can coordinate multiple CC payments per month and not ever being late should prove that I am less of a risk, right?
3. Although this last one hasn't impacted me directly, I understand that the CRA's handling of disputes needs overhauled badly. Presently it takes nothing short of a lawsuit to get them to change inaccurate information on some people's reports. And obviously, having inaccurate information that lowers someone's score isn't providing the CCC's a reasonable measure of their risk. Not only does the consumer not get as good rates as they might have(or not get loans at all), but this also hurts the CCC's since they may pass up extending credit to someone they otherwise would have.
What other ways would make the credit scoring system better?
Giving us the formula wouldn't hurt.
Not having "buckets" - personal opinion
Enhanced ways evaluating Hard Inquiries. Many Lenders will do a hard hit at the start of the process and again at the end.....many times that's greater than 90 days....thus two hits.
Find a way to reward individuals for paying off old collections (instead of penalizing them)