@surferchris wrote:
@Anonymous wrote:
@SouthJamaica wrote:I'm fairly certain that a person who's paid off all of his debts cannot get a perfect score.
That's pathetic.
No it's not. First of all there's no real world difference between a score from probably 780-850 (+/-) so anything in that range may as well be considered a "perfect" score. People that have "paid off all their debts" can certainly fall into that range quite easily.
Second, like many things in life you have to use the system. It's like investing. You may have had a few solid investments in your life, but if you aren't happy with where you're at as a result you can either do nothing or invest more.
Your statement is far too generalized. You're suggesting a person that has paid off all of his debts should be able to achieve a score of 850. Here's my question back to you. Say an 18 year old individual has a <1 year AAoA and exactly 1 account, ever, on his file. He's run it up, but paid it off. According to your simple, generalized statement this individual should be able to achieve a perfect score. Or are you only referring to people in their 30's+ with over a decade of history that have paid off say 15 accounts? Or somewhere in between these two individuals? Where is the line drawn? The point is there is no line, and that's why scoring takes into account a ton of different data, bucketing, etc. to arrive at an estimation of ones creditworthiness.
Agreed.
Agree with what?
All I said is that paying off all of one's debt should not be a barrier to attaining a perfect score.
I never said, and would never say, that being debt free is the only requirement for a perfect score, or that having some manageable debt should bar one from having a perfect score.
I can't understand the lack of ordinary logic here.
My position is simply this: all other things being equal, having current debt does not make one more creditworthy than someone who has no current debt.
The OP is in his eighties. He just paid off his last mortgage. He should not have lost his near-perfect FICO score just because he paid off his debt.
@iv wrote:
@SouthJamaica wrote:I can't understand the lack of ordinary logic here.
My position is simply this: all other things being equal, having current debt does not make one more creditworthy than someone who has no current debt.
The OP is in his eighties. He just paid off his last mortgage. He should not have lost his near-perfect FICO score just because he paid off his debt.
There is so much twisting of logic in your answer I don't know where to begin.
To repeat: no, having current debt does not make one more creditworthy.
Thank you for finally conceding that.
Actively paying current debt does. (Just as actively being in default makes one less creditworthy.)
Uh, it's impossible to be actively paying current debt unless one has current debt.
SImple logic....
The OP didn't lose his near-perfect score.
Yes he did. He was just under 850, then dropped to 816.
Pretty sure anyone here would agree 800+ is still "perfect".
No rational person would say that 800 is a perfect score on an 850 scale.
I've been at all-850s, and there is absolutely no difference between the 780s and 850 (other than funny reactions from CSRs).
That is irrelevant to the subject we were discussing.
For that matter... When I was at 850s, I had one open mortgage, one open car loan, and three cards.
Then I added two additional real estate loans and a new 0% card in a six-month period. More debt. So... you're saying my score should have gone "up", right?
No I would not have said that at all.
Of course not. It dropped to the 820s. (Still "perfect" for all real purposes.)
No, not perfect, unless you like to twist logic.
Because, of course, there is far more to scoring than "debt=good".
Of course there is. But the FICO formula does say that current debt is necessary for a perfect score, and does say that some debt is better than none.
(You've been around here long enough to know that, too...)
Yes I do know that
And yes, "creditworthy" does mean "being a better money-making opportunity for banks".
If you're using "credit worthy" in any sense other than "not risky", then you're not using it in the sense that I used it. My whole point has been that while FICO's public pronouncements suggest that it is all about risk avoidance, there is another factor at work which is whether someone is willing to be a debt customer in perpetuity.
Credit. Worthy.
A lender believes, based on data, that you are Worth extending Credit to - ie: that you will make them money.
Risk + reward. The point I've been making all along.
(It's when scoring models designed for extending credit start getting used for non-lending uses that things get sketchier and less "logical".)
What's sketchy is FICO's claiming that it's only about risk avoidance, when it isn't.
There are some seriously twisted statements in this discussion.
The fact is this with regards to FICO scoring: you can optimize your score (under all models released) with call it a total of $10 of reported debt: $5 on a single credit card, and $5 on a typical $500 share secure loan, and you might even be able to do it with $2 depending on your credit card issuer of choice.
Have 4ish more credit cards at $0, and congratulations, you win the FICO scoring game. Between that and never missing a payment, that's really it: it's not magic.
Having $16000 or $160000 or $1600000 installment debt simply isn't needed, the magnitude of it is absolutely irrelevant as it's just a percentage calculation no different than the revolving utilization side... and it's flatly impossible to state that high revolving utilization equates to any sort of good thing under ANY credit score ever released, FICO, FAKO, even the worst of the old educatonal scores which are finally dying out thankfully. I don't care who you are, when you can solve FICO for less than a yuppie foodstamp worth of debt, nobody should be arguing that having a high debt load is necessary.
Also it is absolutely correct to state that anything above 760 is effectively irrelevant since no lender cares about it, and therefore neither should anyone else. Perfect scores, yawn, other than bragging rights (which are dubious at best) they're useless. If that changes in the future fine, but it's held for what, 30 years now?
I can empathize with some of the fustruation I see on this forum, but if you're not willing to at least take the time to look into the mechanics of the algorithm and simply proceed to simply cry foul and not listen to anything others are stating, well I have incredibly little respect for that behavior. We're adults here, but this is starting to smack of "Someone Is Wrong On The Internet" bickering, and that slides close to non-acceptability here under our TOS.
@Anonymous wrote:Why can't we have both? Shouldn't there be a reward for paying your house or for that matter your car off?
You do get a reward, namely better finances, but not FICO wise. Data didn't show that unfortunately when they were designing FICO 8 and presumably FICO 9.
Finances > FICO, and I've never seen anyone disagree with that assertion; they're simply not equivalent measures, and unless one simply believes the algorithm was designed by Oujia board, it's little hard to suggest that there wasn't a rationale based on the data for how they went about it.
Does it reward everything that we believe is "good," obviously not, but we figured this out a year ago and it gets reposted commonly... anyone who finds this forum and posts, well it's a shorter amount of time to just *fix* instead of posting a second time here honestly even if it might not produce the same emotional response. I know you've seen it Sandi but for anyone else reading simply go read the Method thread if you have zero open installment loans, and go win from the FICO perspective.
Method:
http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Adding-an-installment-loan-the-Share-Secure-technique/m-p/4506756#U4506756
Gory Theory:
http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Installment-tradeline-utilization-thread/m-p/4055989#U4055989
@Anonymous wrote:
@Revelate wrote:There are some seriously twisted statements in this discussion.
The fact is this with regards to FICO scoring: you can optimize your score (under all models released) with call it a total of $10 of reported debt: $5 on a single credit card, and $5 on a typical $500 share secure loan, and you might even be able to do it with $2 depending on your credit card issuer of choice.
Have 4ish more credit cards at $0, and congratulations, you win the FICO scoring game. Between that and never missing a payment, that's really it: it's not magic.
Having $16000 or $160000 or $1600000 installment debt simply isn't needed, the magnitude of it is absolutely irrelevant as it's just a percentage calculation no different than the revolving utilization side... and it's flatly impossible to state that high revolving utilization equates to any sort of good thing under ANY credit score ever released, FICO, FAKO, even the worst of the old educatonal scores which are finally dying out thankfully. I don't care who you are, when you can solve FICO for less than a yuppie foodstamp worth of debt, nobody should be arguing that having a high debt load is necessary.
Also it is absolutely correct to state that anything above 760 is effectively irrelevant since no lender cares about it, and therefore neither should anyone else. Perfect scores, yawn, other than bragging rights (which are dubious at best) they're useless. If that changes in the future fine, but it's held for what, 30 years now?
I can empathize with some of the fustruation I see on this forum, but if you're not willing to at least take the time to look into the mechanics of the algorithm and simply proceed to simply cry foul and not listen to anything others are stating, well I have incredibly little respect for that behavior. We're adults here, but this is starting to smack of "Someone Is Wrong On The Internet" bickering, and that slides close to non-acceptability here under our TOS.
I've found this to be an interesting discussion. If this is what qualifies as non-acceptable under your TOS, then I'm done with this place.
The discussion isn't the issue, to ignore the well known facts of the matter in order to generate a negative reaction is very much troll-like behavior. For people looking to pick fights to the exclusion of a healthy discussion, that's a problem and has precedent here: there are other places on the net for that sort of exchange.
Frankly the times we've had to exercise this sort of thing is incredibly rare (maybe once a year) as generally a pointed reminder about keeping things on point addresses it; however, this would've already gone sideways over in CC's on a similar topic, UFS is far more restrained in that regard.
I'll fully admit I'm not blameless in this given my last two posts; however, this forum is about the respectful exchange of information and ideas and if it strays from that, no bueno.
@Anonymous wrote:
@Revelate wrote:There are some seriously twisted statements in this discussion.
The fact is this with regards to FICO scoring: you can optimize your score (under all models released) with call it a total of $10 of reported debt: $5 on a single credit card, and $5 on a typical $500 share secure loan, and you might even be able to do it with $2 depending on your credit card issuer of choice.
Have 4ish more credit cards at $0, and congratulations, you win the FICO scoring game. Between that and never missing a payment, that's really it: it's not magic.
Having $16000 or $160000 or $1600000 installment debt simply isn't needed, the magnitude of it is absolutely irrelevant as it's just a percentage calculation no different than the revolving utilization side... and it's flatly impossible to state that high revolving utilization equates to any sort of good thing under ANY credit score ever released, FICO, FAKO, even the worst of the old educatonal scores which are finally dying out thankfully. I don't care who you are, when you can solve FICO for less than a yuppie foodstamp worth of debt, nobody should be arguing that having a high debt load is necessary.
Also it is absolutely correct to state that anything above 760 is effectively irrelevant since no lender cares about it, and therefore neither should anyone else. Perfect scores, yawn, other than bragging rights (which are dubious at best) they're useless. If that changes in the future fine, but it's held for what, 30 years now?
I can empathize with some of the fustruation I see on this forum, but if you're not willing to at least take the time to look into the mechanics of the algorithm and simply proceed to simply cry foul and not listen to anything others are stating, well I have incredibly little respect for that behavior. We're adults here, but this is starting to smack of "Someone Is Wrong On The Internet" bickering, and that slides close to non-acceptability here under our TOS.
I've found this to be an interesting discussion. If this is what qualifies as non-acceptable under your TOS, then I'm done with this place.
