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

Douglas Johnson <post@[EMAIL PROTECTED]
> wrote:
> "Daniel T." <daniel_t@[EMAIL PROTECTED]
> wrote:
> 
> > It seems to me that timely payments on loans increase your FICO
> > while credit use (paying off the cards before interest accrues)
> > does not. 
> 
> This doesn't make sense to me.  Why would borrowing money regularly
> (don't hair-split the term) and paying it off regularly be bad for
> your score?
> 
> It shows the ability, willingness, and discipline to handle credit.
>  It also shows an aversion to usurious interest rates, but Fair
> Isaac doesn't care about that.

Really? I'm not so sure. I expect that Fair Isaac cares about what their 
customers care about. Their customers are not you and me, rather they 
are lending institutions. I expect that lending institutions do care 
about consumers willingness to pay "usurious interest rates", or at 
least that makes sense to me.

> I haven't had a loan in over ten years, always pay my credit cards
> in full each month, and have a top drawer FICO score.

Well, the FICO score depends on other things besides punctuality of 
payment, for example your ratio of outstanding revolving debt to total 
possible revolving debt. I expect you are in good standing there.

So the question to ask is, would your score go up or down (or remain 
unchanged) if you took out a loan (non-revolving debt) and made "timely 
payments"? Myfico.com claims that doing so would raise your FICO "in the 
long run."

--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators
strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond.  For all of the other tips and suggestions, see "FROM
THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on
the
Newsgroup.