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As a person who uses only credit cards and pays the full balance, I welcome this change.
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Changes are coming to your credit score (CNN)
- Thread starter Carnby
- Start date
More here:
As a person who uses only credit cards and pays the full balance, I welcome this change.
I have great credit and even I don't understand how this shit works. Next time someone tells you they know a lot about credit scores, ask them how many points a late payments costs.
I currently don't have a credit card because of my credit score is too low, will this change help first time credit card applicants?
As someone struggling to get out from under a rough few years, we already got penalized for carrying balances and this sounds like we'll get hit more. I hope it doesn't make our situation worse. But I'll have to see what it looks like.
yet as a black man, I can't help but feel like this will bite me in the ass some how
Sounds like if you're making consistent payments it's gonna slightly go up. I'd love that if that's the case, it's my only hope at this point
On net, it's a great change. If you make a large purchase and receive a 0% interest deal, you can now still enjoy a high score despite the utilization going massively up.
For example, I currently want to refinance my home but have two revolving accounts with large 0% interest charges. I took a 15 point hit to my score and will end up paying early on a portion of that debt simply to get the better refi rate.
For example, I currently want to refinance my home but have two revolving accounts with large 0% interest charges. I took a 15 point hit to my score and will end up paying early on a portion of that debt simply to get the better refi rate.
Because they are an imaginary number designed to punish people for being poor?
Discover has a great credit card, the Discover It Secured card, that allows you to make an initial deposit of whatever amount and that amount is used as your limit for the first 12(?) months of having the card. From there, they typically raise your limit and turn it into a standard credit so you can begin building your credit.
Let's say you're thinking of lending money to someone and want to know the likelihood of them paying you back. What alternative system would you recommend?
Yes. FICO 9 was release some time ago and only few bank uses it (Most national bank / credit unions don't). This new change is FICO 10 and won't probably be used either, or at least not in the near future.
Most lender currently are using FICO 8.
Yes most banks are still using FICO 8 and only a few have moved to FICO 9. Its just different scoring models.
WTF?!?! What's the point of FICO if it has these fragmented numbered versions???
It's a scoring model. They update it over time. Consider it patch notes. In reality, the change from one model to another is a less than 10 point change for most people.
FICO 9, for example, ignores your medical collections to calculate your credit score.
Is FICO publicly available to view or is it something confidential that no one can see other than financial industry people?
If credit scores were used only for lending actual money to someone, and not for important things like getting an apartment or even a job in some cases, then a credit score system would be much more palatable. But when it's used for other things, then it totally screws over the poor.
FICO 9:
- Third-party collections that have been paid off no longer have a negative impact.
- Medical collections are treated differently than other types of debt. Unpaid medical collections will have less of a negative impact on FICO® Score 9.
- Rental history, when it's reported, factors into the score?this may be especially beneficial for people with a limited credit history.
A system that is transparent and actually tells you how your score is created. This current system doesn't tell you shit other than your score and accounts.
The whole credit system is fucked. You got shit credit but lots of income and want a new bmw? Get a sucker to co-sign, doesn't matter if they don't make nearly enough to cover it if you don't pay. Thats what happened to me, went from perfect credit to untouchable because of the debt to income ratio. Credit is still shit 7 years later. Lucky for me they eventually totaled the car and it got paid off, but I still got 5 years left until that crap goes away from my credit report. I've basically been saving up money with income from my second job to pay down my own debt faster. Doesn't seem to have any effect on my credit at all though. Next car I get will probably be a cash purchase. Turns out its pretty easy to save up 30-40k when you don't have credit card payments to deal with so its not so bad.
Get a secured credit card as someone pointed out earlier. I did the Discover Secured Credit Card route where I gave them $200 as my credit limit. After a year they refunded my money and increased the limit to 1500. I only used the card for reoccurring bills every month and paid off the balance whenever it was charged.
So for first time credit card people: It's good to get a secured credit card and only have bills charged to the card to pay off the full amount before the due date to get a higher credit score?
Cosigning a loan is accepting responsibility for the debt. There are plenty of things to dislike about aspects of the credit system but I struggle to understand what you think should have happened in the case you presented. Were you mislead?
It's a great way to establish a responsible credit history. The earlier the better.
Lol. I know exactly how this current system "works" and I have good credit so this isn't a personal issue.
Doesn't make it any less dumb that someone is penalized for being poor or for mistakes in their youth. Nor should someone be forced to use these credit products designed to keep people In a perpetual cycle of debt in order to have a good "credit score".
You have the exact same mentality that banks and these financial institutions want you to have.
History is important. Look no further than this very forum, which has a way of tracking feedback for the Buy/Sell/Trade thread so people can gauge who they can trust in future transactions.
That's a good argument for regulating who can use credit scores for what (just like, say, medical records are regulated), not for throwing out the system, in my opinion.
Is the lack of transparency a US thing? I use creditkarma in Canada and the score is pretty transparent. Not in its exact details (creditkarma just makes an estimate of your score) but nothing seems like a surprise. Wouldn't the American version of the site be similar?
I'm talking about how a score is created, what makes it go up? What makes it go down? How many points is assigned to each action? If I get a credit card, how does it actually effect my score. Shit like that