Credit Scores? Why do we even have them?

Dufferman Credit score slowly climbed just over 800 last month. Got an email today that my credit score dropped. Out of curiosity I checked and it went down 14 points and I have no idea why.

The same happened to me but it was on my FICO score that dropped 23 points down to 797 a month ago. Experian could give me no reason period - zero balances on every revolving line of credit, zero inquiries of any kind - 0% utilization rate on my 3 cards (one personal, one joint with my wife, and one business), car loans with one of them 2 months from paid off...My weakness is my average length of credit is "only" 9 years and that's because scores of years with carrying a mortgage (paid off in full with no late payments) eventually dropped off my record dropping my average length of time of having credit. Crazy.

My Vantage scores have held steady without any change up/down for months. Just the FICO.

Unfortunately, banks and insurance companies DO use the scores in setting interest rates offered to borrowers and in classifying risks for property and casualty lines of business. I'm also subject to background and credit checks every time I have to approach a new financial firm to be appointed to represent them so this topic is near and dear to my heart.

A few years ago, the credit rating agencies adjusted their formulas that resulted in the vast majority of Americans getting a bump up in their scores. I wonder if the rating agencies are getting some pushback from their customers (creditors) to reel it in again?

But almost every day, Credit.com and Credit Karma have a 'hot new card' that I'm pre-approved to receive. No thanks.

I have no clue how they work the formula, but they were implemented to eliminate lending bias and ensure all potential borrowers were underwritten the same

Dufferman So, I have pretty good credit.

Your score is still considered EXCELLENT.

Remember, it is a "credit" score. Not a "financial wellness" score.

The Man wants you using credit. Consistently. $0 balances are not credit score boosters. Using lots of credit, making payments on time, and having the means to pay it off makes The Man happy = good credit score.

Dufferman I cannot like this enough! Lost all respect for the process when I didn't miss a car payment for the 5 year loan on a car - finally paid the thing off and my credit score dropped because of no more loan.

Then I buy another car with a new loan and do a large charge on my credit card (paid off from a cash account when the statement was due) and it drops because I'm using too much of my credit limit.

Thanks, now I'm grouchy lol

Dufferman I am no expert but if my credit card usage runs higher one month then my score seems to drop the next. Example I'm thinking is if my normal credit card bill is $2k a month and I spend $4k one month then back to $2k.

PSA: Make sure you lock your credit.

My wife & I haven't been below 800 in over 20 years & today I'm at 801. All of our factors are excellent except that we don't have a mortgage or car payment, all we do is pay every damn bill on-time and pay-off CC balances monthly (treat our cards like American Express cards) unless we have a 4 figure balance then it's paid off in 2 months. 801 is still excellent but it's a matter of pride for me.

Toulon I'm in the "ignorance is bliss" section on this category of life's concerns.

They keep score?

sdandrea1

I don't worry about the number, I've been close to perfect, and as low as low 700's during a rough stretch when I was carrying a lot of debt when separated. As long as the score is in the upper 700's, you are considered to have great credit. Banks shoot in ranges for rates

Went to purchase a new dining room table and chairs over the weekend at a local furniture store. The salesperson asked my method of payment, I told them cash money. No lie, he had to consult the manager to make sure they took cash. lol

If there’s one thing better than having a good credit score, it’s being in a position to not have to be concerned about it.

Glad that my wife and I learned some hard lessons about wasteful spending early on in life rather than later.

There are a lot of things overrated in life. Not having mortgage/car/credit card payments ain’t one of 'em.

I have no idea what my score is now but at one time it was 15 points from perfect. I think 850 or something is perfect and I was 835. Like others here I closed out a card I never use and it went down. I thought that was really weird.
I'm not planning on ever buying anything on credit again unless we move or buy a second home, and even then might pay cash depending on interest rates and what we get for our current house. I do use my CC to buy pretty much everything for the points and pay it off monthly.

garyt1957 Perfect now depends on which of the three you look at. FICO uses 900 now--of course, but Experian uses 850. My bank doesn't list a Vantage # for me, not sure what that is but they do list their own score for me when I had a credit card with them but closed that and my score event down.

I'm more like @bogeypro , a pride thing as I haven't applied for any loan in over 10 years and don't add cards--got to get a life. My FICO is 861, they show how this is measure by percentages but no actual data. My Citi card (use for air miles) states two reasons for change--too many credit accounts and fewer accounts--go figure.

Once I was 849 when they sued 850 now they bump it up.

I would definitely look at all 3 if you haven't already. Several years ago when we bought my wife's car I was surprised when the credit union said our score was just ok and so we would have to pay a slightly higher rate. I checked all 3 and 2 of our scores were great while that one was just ok. There was an incorrect "blemish" on one that we were able to get fixed. Not really a big deal, but it would have increased the loan % a couple of tenths.

I hear the score and can drop with too many credit cards, but it can also be lower if you only have 1 card, no loans and everything paid on time. Apparently no activity is almost as bad as too much.

KCee I hear the score and can drop with too many credit cards,

It does. Drops every time you apply, whether accepted or not.
We never had any cc's. Never had any loans. Always paid cash as we went along. 1 day, about 18 mo. ago, I got an 'invite' to apply, through Amazon, and for shits/giggles, I did. Approved, with a really good line of credit. Of course this led to more offers and I started taking them up on them. Most had no interest for the 1st 12-15 months. A lot of them had cash back deals. Some even had bonus deals of 'spend x in xx days/months, get as much as $400 free cash'(they do pay!!). I kept getting approved and got a few just in a couple months. Use them as we should, and got a ton of free bonus cash back. Credit score was nearing 800! Then I stopped and kept close watch through Credit Karma at the fluctuations in score. It's crazy. No matter what you do/when you do it, it's going to change almost weekly, but even after getting even more cards the past few months, it's really never gone down all that much. I let them go, making just min. payments for a couple months, then paid them all off at once, just to see what happened to the score. It never moved. Now that I'm using a couple of them again, scores are slightly raising. FICO score is high. Vantage is fine. Experian and the others, up/down weekly. No sense to be made of any of it.

The more active loans, credit cards, etc. that you continue to make all payments on time. The higher your score will be. It's just the opposite from what you would consider to make sense. If you never had credit cards or loans with a record of paying them, they don't know if you are credit worthy or not.