Soring System

[Anonymous]

Apparently debt to credit is a ratio used in determining the score. I believe that this may be where my score takes a hit.  I have several cards that are used for different purposes, ie: recurring charges, on line purchases, Gas and MV expenses, general use.

I always pay everyone in full every month when the statement comes. I never have late charges or carry a balance. Basically if I don't have the money I don't buy the product.

To me, the way I was always taught in business school, this is excellent credit use and shows good credit management. I use cfredit because, in some cases you can't pay cash, in other cases it's not good money management to carry excessive cash with you, and in still other cases I do not want any of my bank account numbers released to a vendor for automatic withdrawl. Most vendors today won't ship product and bill you so you can send them a check directly. They prefer credit cards.

This said, after some fifty years of doing it this way, I don't see why my credit score should get dinged because of this.

I can't believe that my record shows that I would be a bad credit risk.

Actually I have one business locally thet I buy from where every time I walk in the owner asks if I finally have brought my checkbook to but the business!

I go to my bank and it's not a case of gettiing the loan but rather what the interest rate will be....

I think that this whole credit score business is computers with faulty progarmming. And no one will tell you EXACTLY what to do to get the best score.

P.S. I've been in the computer business since we did it on punched cards. And we've always said that computers don't produce faulty data unless the progarm is faulty.

[MidnightVoice]

---

@Anonymous wrote:

P.S. I've been in the computer business since we did it on punched cards. And we've always said that computers don't produce faulty data unless the progarm is faulty 

---

AKA Garbage in, Garbage out!! 

 

But you don't mention your actual scores - are they had?  Have you been denied credit recently?  Have you checked your free annual credit reports for errors? 

[Anonymous]

To answer your question.....

I have my credit reports and they all say NO DEROGERATORY INFORMATION.....

Reports show history as indicated.....

Score is high 700's

I want to know EXACTLY, whether there is anything I can do or not, whay its not 850.

Then I'm going to my elected representatives with a complaint....

[haulingthescoreup]

If you want to raise your scores, pay your CC balances before their statement dates so that they report $0 to the bureaus. Let ONE card show a $10-20 balance, and once it reports, pay it off as well.

I suppose you realize that scores in the high 700's are all you need, but if you want to tweak, this is the simplest way to do it.

For other things that might help (credit mix and so forth), read the forums.

And you surely know about bell curves, where scores at the extremes are exquisitely sensitive to the slightest change. This is part of the reality of having high scores.

[Anonymous]

Paying a credit card BEFORE you receive a statement is both practically and patently ridiculous! If you're going to do this use CASH and completely destroy your credit since you'd have no credit record.

The purpose of having a credit card is to consolidate a months purchases into a single payment each month.

How much you put on the card and your ability to pay the account in a current fashion should be the measure of credit risk. Someone who carries a balance from month to month is certainly not a good credit manager. I fail to see why using the allowed credit and paying it promptly does not constitute good credit management.

I know that I am looked more favorably by my commercial accounts by paying each month rather than the person who pays by invoice. The person who pays by invoice is actually nothing more than a cash customer. And while this may be good it shows no ability to manage credit. If this cash customer needs something large and wants to pay it at the end of the month he may not be able to do so since he has established no history of credit management. The vendor has no way of knowing whether this customer would have the cash available at the end of the month or not. This paragraph comes directly from the credit manager at one of my commercial accounts.

Message Edited by Prof on 02-16-2009 04:02 PM

[haulingthescoreup]

It's completely up to you whether you want to play the game.

[Anonymous]

Also, on another vein, saying that a score of say 790 out of 850 is good would be like saying that someone should be happy if a motor delivered to them and stated to have an output of 1 horsepower was found to actually have an output of only 0.929 horsepower. Maybe usable but certainly now what they have a right to expect. I certainly would be in trouble if I gave a student a 93 and told them they needed to buy special paper if they wanted 100. In my engineering world 790 (93) out of 850 (100) wouldn't allow you to keep your job very long or be invited to work on the next product.

[haulingthescoreup]

Well, all I can say is that if you want to shoot for 850, learn how the formula works, and implement it.

[Anonymous]

First and foremost I don't think something as important as a credit score should be "A GAME". I don't play games with money!

Second, the "formula" should not be designed to penalize good money management and credit practices.

As I edited my first message a few minutes ago. To pay BEFORE the statement date would be the same as using CASH and that would REALLY blow ones credit score as there'd be no credit to report.

Also I've been looking for the elusive formula for quite some time. Every time I find something it's writtem in such generalities it actually provides no direction.

Message Edited by Prof on 02-16-2009 04:15 PM

[haulingthescoreup]

I apologize if I sounded flip. I understand how irrational some of this seems. These forums deal with practicalities, not ideals.

The scoring formulas are statistics-driven, so you know what that means --outliers like you are treated oddly. The way that they weight various elements of your reports is derived from however many histories they crunched. The elements are those on your credit reports, and what your reports show for balance, in almost all cases, are the amounts on your statements. There isn't a field to show balance due on the due date, which is what would be needed to show payment in full upon receipt of the statement.

As there is this glaring limitation, we have learned that if we want to get credit for monthly payment in full, we have to pay before the statement drops. It's true that if one has large balances, up in the thousands for every account, one will lose the advantage of earning interest by paying a bit early. But if you'll check your accounts, you will probably find that your lenders have been quietly inching up the due date, shortening your payment period. In times where 3% is a huge APR on savings, I found that I was losing literally pennies by paying early.

While it would be nice if everything agreed with the logic that we would like to assign, the fact is that often the second-best option is to learn how to work the system, or play the game.


edited to remove a sentence fragment, gasp

Message Edited by haulingthescoreup on 02-16-2009 04:30 PM