"To a large degree, NO, the consumer does not know the ins and outs of credit computation. This is a REAL issue. Of COURSE if you pay your bills on time and run zero balances you'll be in good shape. Duh. The larger and much more valid point is of course the intricate details for the rest of us living in the real world. The "games" that can be played with % points worth of utilization, opening and closing of accounts, and the artificial jacking up of credit limits tell you all you need to know regarding credit manipulation and some of the "secrets" of playing with scores."
But again, the basic principles of attaining and maintaining a high credit score are so simple that both you and the OP had them right in your own posts surrounded by complaints about how people don't know the ins and outs of credit scoring. That basic information is readily available all over the Internet with maybe 20 minutes of research. The fancier stuff that more well informed credit consumers do is all well documented on this site and many others; again free of charge, readily available, indexed, and searchable. I agree that many people don't know the ins and outs of credit scoring, but it's because they've chosen not to do even basic research. That's on them. 30 minutes and a computer on the Internet gives anyone who wants it all the information necessary to achieve and maintain a high credit score. If you want to do more intricate stuff with it to squeeze a little extra out of your score, spend a few hours. It's all still free and it's all still public knowledge.
"Second: no reasonable person, including the OP is stating or implying the "system" demands perfection."
From the OP: "2. It's a "system" that demands all-but perfection." Those are his exact words. His words; not mine, and not a straw man argument.
"The main thrust seems to be that the system itself is deeply flawed"
Do you have actual data that backs up the claim that the FICO scoring system does not accurately guage the likelyhood that an individual with a given credit history will stick to the terms of a credit arrangement? Because if you do, there's a $15 Trillion / year economy that would love to see that data.
"the central issue being that 1, 2, 3, or even 5 negatives holding unbelievable sway over hundreds or even thousands of postives over years of payment history."
It's only an issue if the system is designed to be nice to people and not hurt their feelings. The FICO scoring system is not designed to do that. It's designed to calculate the chances that an individual with a given credit history will stick to the terms of a credit agreement. That's all. If it does that job well (and decades of use in the real world says it does), then it isn't flawed. If 1, 2, 3, or even 5 negatives among thousands of positives over years of payment history predict that Person X has a 20% chance of defaulting, and that holds true, then the system isn't flawed. If 1 negative among 100,000 positives over 80 years of credit history says you have a 25% chance of defaulting, that isn't necessarily a flaw in the system; it's only a flaw if that turns out not to be the case.
You and the OP seem to be seeking something that's fair and kind and treats people as individuals with their own circumstances and needs and dreams and hopes and wishes. Any lender is free to do just that. That isn't what FICO is supposed to be doing for lenders. FICO is supposed to be providing an accurate assessment of how likely an individual with a given credit history is to stick to the terms of a credit agreement. That's all. It isn't trying to be nice or fair or kind or happy; it's a measurement. If you think it's incorrect, feel free to come up with your own and sell that to lenders. A word to the wise, others have tried to do just that for a long time and they've gotten very limited traction because FICO is so darn good at what it does.
"Seems many (including the OP) find the very nature of the issue to be that FICO is a private entity which can have a million motivations to do a lot of things: good and not so good."
Fair Isaac Corp has one motivation, which is to make money. It does so by providing the most accurate formula in the history of the world to lenders. It has competitors trying to displace it with other formulas, which forces Fair Isaac to continuously work to improve their formula. The goal of that formula is singular: to provide the lenders with that simple and easy to digest measure of risk so they can price their product based upon it. Lenders can choose to overprice their product just as any business can and borrowers can choose not to use that product just as any consumer can choose not to buy overpriced coffee. The role of the FICO score in all this is simply to provide the lender with that singular, simple, measurement of risk, and it does so exceedingly well.
"I watch my own CS continue to fluctuate like a plastic bag in the wind storm: as low as 675 and as high as ~800 in a 16 month period. And I've never missed a payment in my life, had a collection, or ever had utlilization over 50%. The idea that I'm "sometimes" in a significantly lower tier of credit worthiness is hilarious to me."
Again, if you can come up with a better formula, please do so. It'll help make the economy more efficient and you'll get rich. I can't speak to why you're seeing such wild fluctuations (assuming that you are and that you aren't, for example, just trying to make your point) without knowing more about what's in your credit report. However, I can say that FICO scoring works and has worked for decades. It works in the largest economy the world has ever known and it does so by choosing accuracy over kindness or some personal sense of "fairness".
"There's a good reason why dozens on this thread have agreed with the OP...and it's not because they're ill-informed or are irresponsible."
Some people are ill-informed and some people simply don't reason very well. In any event, the world keeps on going even as some choose to pee into the wind.
Starting Score: 675
