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

On Tue, 20 May 2008 12:25:09 -0500, "Default User"
<defaultuserbr@[EMAIL PROTECTED]
> wrote:

>Daniel T. 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.
>> As such, a good FICO cost considerably more than the eight dollars
>> the OP mentioned. Am I right? 
>
>I don't think so, and it hasn't been that way for my own little bit of
>anecdotal experience. I've always paid off credit cards without
>carrying a balance, and I've had a good FICO from the first time I
>found out what it was.
>
>In the FICO scoring description, it doesn't describe anything about
>what you say. If does mention debt to credit ratio, so the lower your
>balances and higher (and more numerous) your limits, the better.
>
>
>

That's way to simplistic.  Once you have a credit card, you can
usually keep it forever or at least several years without using it.
Your debt to credit ration is good but you may not have a job or a
penny to your name.  A high FICO is obtained primarily by using your
credit to make timely payments over a period of time.

Take for instance college students.  There are several banks that
routinely set up tables in the student union signing up students for
their credit cards.  They give them to almost anyone without any
credit history whatsoever and no job.  They have great debt to credit
ratio when they start yet no FICO score.  They have to demonstrate
that they can handle that credit.  Paying off a balance every month
does not help.  It's virtually a wash.   In case you missed it, last
week i related a story where I was present with a co-worker who
applied for a cell phone and was denied without putting down a
substantial down payment.  This guy had a great income with a long job
history.  I know because I worked with him for 30 years.  His house
was paid of 15 years earlier, he always paid his credit card off every
month and even had a business that had a cash flow of several hundred
thousand dollars.  The problem is he had no recent track record of
making payments over time.
This is a true story.
Thumper
>
>Brian

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