median fico score shell game....

[Anonymous]

i find it hard to believe that the median fico score in the u.s. is 720, or whatever "they" say it is at any given time. 

[Anonymous]

I wrote a post about this a little while back....

Until this "720 average" nonsense is audited by someone not affliated with the CRAs, I think it's a bunch of malarky.  It's a little like me asking you how much money you make a year without giving me any proof. 

I think the actual average is closer to sub-prime than to 700.  If I'm a loan company, I want justification that will allow me to make more money on a loan I've decided to extend to a customer.  That individual won't be more or less likely to default if the interest rate is a few points higher.  So I have an incentive to use a CRA that issues the lowest scores (or hope that they all do).  I make more money.  CRA gets more of my business.  I think you see this with the CRAs making it more and more difficult to dispute INACCURATE information.  If they were simply running a mathamatical alogorithim (sp?)  they would properly investigate all claims and make the process easier. 

Of course, if the CRAs get greedy and (for example) score everyone's credit at 600 and lower, then the Government might step in.  So short of that, play ball!  If there's a profit in screwing someone, assume they (and any biz.) will do it.  In fact, in Capitalism, a biz that doesn't screw over people (assuming no Gov gets involved) is not an effective one.  Don't hate the playa, hate the game.

My 2 cents. 

[Anonymous]

i will have to look up your prior thread.  i certainly would agree that it is to their benefit to keep this legend of half the population being above 720.  on any given day, i deal with dozens of people of all socio-economic groups, and it seems to me that most of them that i have talked to on the subject have scores in the mid 600's.  of course there are some who say they are above 700, and i believe some of them; however, of those, i think others are inflating their scores because many say 720, 720, 720, the score that they see and hear all of the time as the median.  i just find it really, really hard to believe that 720 is accurate. 

[Anonymous]

I don't know about this or have anything to back it up. With that said, what about all the old people who stopped using credit. Their score should be upper 700s before every thing goes dormant? Maybe?

Message Edited by ilovepizza on 06-20-2007 01:22 PM

[Anonymous]

if that is the case with the old people, which is a good point, pizza, then the fact that they have stopped using credit should be factored in and lower their scores.  just like my scores wont get higher if i sit on all of my revolving accounts at 0 balance, or just stop using credit altogether.

[MidnightVoice]

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ilovepizza wrote:
I don't know about this or have anything to back it up. With that said, what about all the old people who stopped using credit. Their score should be upper 700s before every thing goes dormant? Maybe?

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What makes you think old people don't use credit?

And given the increasing age of the population. a lot of those 720 scores are probably people who have got over their youthful mistakes and have stable credit in the 700s and 800s. 

[Anonymous]

midnight is probably right.  those fools should not be counted towards the median.  j/k.

[Anonymous]

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@Anonymous wrote:

if that is the case with the old people, which is a good point, pizza, then the fact that they have stopped using credit should be factored in and lower their scores. just like my scores wont get higher if i sit on all of my revolving accounts at 0 balance, or just stop using credit altogether.

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The FICO score is supposed to indicate risk potential and even if older people used credit less (which is debatable), such inactivity would not indicate increased risk, so there's no cause for their scores to drop significantly. In many cases, they will be getting near-maximum FICO points for credit age and probably for good utilization as well.

[Anonymous]

exactly.  just like if i had fifty cc's at 0 balance should show less risk than if i had 1-9% utilization on the same fifty cc's, regardless of the fact that i am not old.  well, okay, i admit that i am getting old.

[SoulSmilen]

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dog wrote:

exactly.  just like if i had fifty cc's at 0 balance should show less risk than if i had 1-9% utilization on the same fifty cc's, regardless of the fact that i am not old.  well, okay, i admit that i am getting old.

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Soulfucious say.... Age is a matter of mind; if you don't mind, it doesn't matter!