Re: How Much Is A Credit Score (FICO) Worth?

John A. Weeks III wrote:

> I guess I even dispute that statement.  FICO does not look at
> assets or savings, only debts.  I think credit part has to
> include assets to be fair.  After all, is someone like Bill
> Gates a bad credit risk if he has no loans outstanding, and
> thus a zero FICO?  And if a person can handle a $200K loan,
> but also has another $100K in the bank, aren't they a better
> risk than someone with $0K in the bank and $50K in credit card
> debt?
> 
> I still only see FICO as a measure of how badly a bank can
> rip you off, not what a great deal they can give you.
> 
> -john-

But John, since income is not part of the FICO score, nor are assets, 
it's possible, however unlikely, that Bill's FICO is not great.
Is he actually a bad risk? Of course not. When we last went around on 
FICO, I thought we agreed that FICO created a number offering a 
likelihood of default, not a measure of one's ability to pay anything.

I pull $30000 off a zero interest deal, and deposit the money to earn 
5%. FICO sees that I grabbed a new card and maxed it. It doesn't see 
where the money went.

I decide I hate XYZbank and cancel two cards I've had for a while. FICO 
score drops.

I struggle to pay three high interest cards off, and somehow find two 
cards that will permanently lower the rate while transferring the debt, 
and I cancel the three old cards. FICO just got trashed.

There's no one at Fair Isaac asking questions, looking over one's 
shoulder. Just a series of equations.

Joe

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