GuyInTexas

Question about FICO

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Couple quick questions

1. We recently paid off our car and other than one negative (late 60 days) was curious if it being paid off will help our score and

2. We also have a repo that is still on the report even though it was from 2000 and should have dropped off. Once removed will that raise my score much and does it count the same as a charge-off?

Thanks in advance!

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Which score? Your FICO Bank Card score (the "sucker" score) will probably improve. Your FICO New Car score will improve when the repo falls off. Your FICO mortgage score probably doesn't care.

And no, the REPO isn't the same as a charge off.

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Your sucker score depends mostly on your use of unsecured credit...other credit cards...so, paying off your car will probably make your score go up slightly.

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Why do you call it a sucker score? Do you have proof it is nowhere near the classic FICO? Or is this simply a guess?

If this is a "sucker" score, then what do you call Vantage and the EX/TU FAKO scores?

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The "classic FICO'...the one we, as consumers, are allowed to see IS what I call the "sucker score". Rather than measuring how good you manage credit, it really measures whether the credit card companies will make money off you by charging you interest and occasional late fees. It doesn't measure if you're likely to pay them off...that's not what they want...they want you making minimum payments for the rest of your like.

The Vantage score and the other FAKO's are closest to the sucker score.

All of these things depend upon your "use of credit". In other words, within certain limits, the more you got, the higher your score. That's why "utilization" is part of it. They want to make money off you...getting paid back isn't what they're after.

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Excuse the tone if it comes out a bit rough but I've always had a problem with the analysis of the FICO bank card score being called a "sucker score."

If the above statement (willingtocope) is accurate, then why would your score go up if you bring your utilization down? If it truly was a "sucker score" wouldn't be the opposite be true? If companies only want your money and the most of it, then one paying more interest is to their advantage.

I'm aware that your score is not affected with a $0 balance but it IS a fact that your score goes up if one manages credit wisely.

I think that the "sucker score" label is misleading. Especially when it is thrown around so freely in this website.xdancex

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No offense taken...or offered, for that matter. The term "sucker score" is mine, and mine alone. (The opinions offered here do not neccesarily reflect the official policy of the board or its sponsors).

However...I beleive in calling it like I see it.

If you read all the posts about credit scores on the board here...you'll see that quite a few are along the lines of exactly the opposite of what you said. "I paid off my credit cards...and my score went down. Why?". IMHO, because its designed that way.

The FICO Bank Card score is counter-intuitive. 0% utilization hurts your score. If your utilization climbs, your score goes up. There are limits, but, even those are flexible. If you've got $30k in available credit card limits, and are only using 10%...there will be other CC's lining up to give you a new card. If your score is 750, you'll be offered cards...but, if your score is 650, you'll also be offered cards. Maybe not the same cards, and certainly not at the same interest rate, but the offers will be there.

The FICO Bank Card score predicts two things. Their RISK, and their PROFIT. It has little to do with whether or not you manage credit responsibly.

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No offense taken...or offered, for that matter. The term "sucker score" is mine, and mine alone. (The opinions offered here do not neccesarily reflect the official policy of the board or its sponsors).

However...I beleive in calling it like I see it.

If you read all the posts about credit scores on the board here...you'll see that quite a few are along the lines of exactly the opposite of what you said. "I paid off my credit cards...and my score went down. Why?". IMHO, because its designed that way.

The FICO Bank Card score is counter-intuitive. 0% utilization hurts your score. If your utilization climbs, your score goes up. There are limits, but, even those are flexible. If you've got $30k in available credit card limits, and are only using 10%...there will be other CC's lining up to give you a new card. If your score is 750, you'll be offered cards...but, if your score is 650, you'll also be offered cards. Maybe not the same cards, and certainly not at the same interest rate, but the offers will be there.

The FICO Bank Card score predicts two things. Their RISK, and their PROFIT. It has little to do with whether or not you manage credit responsibly.

Your view is jaded because by your own admission you can't get a prime card. Therefore, you feel that because you manage credit properly and your FICO are bad, that FICO is a poor indicator of risk.

This is wrong.

If what you said was correct, we could infer that an occasional slow pay (30-day late) would do wonders for your "sucker score". We could also assume that carrying high balances and making only the minimum payments would cause the "sucker score" to rise.

This isn't true. It's incorrect.

The reason that carrying a small balance is good for your score is not because banks want to see you carry a balance, it is because it shows repayment history, whereas leaving the credit card at a balance of $0.00 does not.

The people with the highest FICO are the ones who have little or no debt and a history of paying off their bills on time. They are the people who could live without debt and the ones who aren't overextended. These are hardly the "suckers" from whom the banks make money.

I know you believe what you write, and you've been preaching it for years, but it's 180 degrees from the truth...

FICO is an indicator of risk and nothing else. There are other scores banks use to determine profitability...

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If what you said was correct, we could infer that an occasional slow pay (30-day late) would do wonders for your "sucker score". We could also assume that carrying high balances and making only the minimum payments would cause the "sucker score" to rise.

The points I'm trying to get across is this...

1. Credit card companies DO NOT want debtors who pay their balance in full each month. They DO want debtors who pay them interest (and occasional late fees). They DO want debtors whose overall "utilization" predicts that the CC company will be able to rate jack them, thereby increasing their profit per dollar loaned. They DO want debtors with a PAYMENT history...not a REPAYMENT history. They don't want all their money back...they want monthly interest on the money they loaned you.

2. The FICO bank card score is intended to tell CC card companies how much a debtor fits the previous statement.

3. From a debtor's standpoint, fitting into the category defined by item 1 IS NOT A GOOD THING.

4. Having a credit card with a reasonable credit line that you use for emergencys or instead of carrying cash around IS A GOOD THING...if, you pay it in full each month.

5. Item 4. is true whether you have a "prime" card or not. (For the record, I have an Orchard card. Prime? Nope. But, I don't care...I pay it in full each month).

Therefore, IMO, concentrate on managing your money, living within your means, only have a credit card for real emergencies or to carry instead of cash, and pay your CC balance in full each month.. What I just said has nothing to do with your credit score.

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The points I'm trying to get across is this...

1. Credit card companies DO NOT want debtors who pay their balance in full each month. They DO want debtors who pay them interest (and occasional late fees). They DO want debtors whose overall "utilization" predicts that the CC company will be able to rate jack them, thereby increasing their profit per dollar loaned. They DO want debtors with a PAYMENT history...not a REPAYMENT history. They don't want all their money back...they want monthly interest on the money they loaned you.

2. The FICO bank card score is intended to tell CC card companies how much a debtor fits the previous statement.

3. From a debtor's standpoint, fitting into the category defined by item 1 IS NOT A GOOD THING.

4. Having a credit card with a reasonable credit line that you use for emergencys or instead of carrying cash around IS A GOOD THING...if, you pay it in full each month.

5. Item 4. is true whether you have a "prime" card or not. (For the record, I have an Orchard card. Prime? Nope. But, I don't care...I pay it in full each month).

Therefore, IMO, concentrate on managing your money, living within your means, only have a credit card for real emergencies or to carry instead of cash, and pay your CC balance in full each month.. What I just said has nothing to do with your credit score.

1. Wrong, but it's a bit of a paradox. I have elaborated on that below, but I still don't think you'll "get it". (Something about a horse and drinking water..)

2. 100% completely wrong. There are other scores for this...

3, 4. Absolutely, nobody would argue with that.

5. Maybe, but there are huge advantages both to prime cards, and maybe even for "non prime" cards with signature (Visa) or platinum (Mastercard) benefits.... The point being with those type of cards, you get extra protections above those granted to you by Federal Bank Reg-E. One quick example would be if a company which you purchased furniture from goes bankrupt and the product is faulty... you can file a dispute with any card, and they will put in a claim for you against any remaining assets the company has.. Chances are, you won't get your $ back, and if you do, it might be years down the road. With a prime card, especially if you have had it for years, and if you have serious deposits on file with that institution, they will put in the same claim, but they will deal with slow paying and will usually give you a courtesy adjustment within several days.

Back to point #1

That's true to an extent as far as the actual results, but it's an unintended (at the time it was first realized anyway) consequence of poor underwriting.

Contrary to popular belief, banks would rather have every customer PIF by the due date. Zero risk means zero capital to back credit card bonds. And, it also means AAA paper that they can sell. Further, it would eliminate a lot of the cost of doing business of Collections, Recovery, Legal, etc. Smart (read: good) underwriting downgrades risk. Further, credit cards were once looked at only as a tool to further strengthen customer relationships. It wasn't that long ago that one had to have a deposit account at an institution in order to even think about applying for a credit card there.

Then again, as you pointed out, in a practical, real-world sense, as it turns out, those who are financially illiterate are willing to carry a balance month-to-month, letting that balance rise ever closer to the limit, and treating the credit account as an extension of their income, or as a "plastic loan". These accounts are headed to charge off and everyone knows it months before it happens except the customer who is usually in denial. The only way banks can hope to make any money off these people is by really raising up their fees in the hopes that the customers will continue to make minimum payments long enough that the cost of doing business with them breaks even. You can argue that this rate-jacking is what causes the customers to charge off in the first place, but you'd be wrong. These are the types of custoemrs who will borrow every penny they can, b/c they have no discipline. If the banks didn't raise the fees, these cardholders would continue to make the minimum payment and rise ever closer to the limit still, and they would charge off anyway, albeit about a year later...

In so doing this, there are others in the above-mentioned class of account holders who live for years teetering on the edge of dispair, but always carrying a balance and always paying hundreds of dollars per month in interest. These are the customers who make credit card lending insanely profitable. These are the customers who will get an occasional fee-waiver or be given the opportunity to "skip-a-payment". These are the customers who when they threaten to close their accounts are given slightly better terms to stick around. The banks do love these customers, but only b/c they have to given the remaining demographics of their account holders.

From an underwriting perspective, you can't predict who will do this. And, extending credit to customers who aren't worthy borrowers in the hopes of uncoverning one of these above-mentioned profitable customers is absolutely shoddy underwriting and a poor way to manage risk. That is being borne out in the subprime debacle.

Banks are paying for this now, and are correcting this poor underwriting by lowering the limits of these people (even though that may cost them millions of dollars in lost interest).

The truth is: banks would really prefer that every customer have perfect credit and that every customer PIF and that nobody ever defaulted.

I know that is hard to believe for those who have been subject to chargeoff (and the credit hell that happens before chargeoff)..

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These accounts are headed to charge off and everyone knows it months before it happens except the customer who is usually in denial.

I totally understand your point - but you aren't arguing that this is the case 100% of the time, are you? I happen to PIF as a rule, but you cant' be saying that ANYONE who does NOT PIF is lumped into a charge-off prediction???

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These accounts are headed to charge off and everyone knows it months before it happens except the customer who is usually in denial.

I totally understand your point - but you aren't arguing that this is the case 100% of the time, are you? I happen to PIF as a rule, but you cant' be saying that ANYONE who does NOT PIF is lumped into a charge-off prediction???

Absolutely not. I'm talking about the accounts that are maxed out or very near the limit and where "over limit fees" and "late charges" are regularities... and where the payment made is never more than a few dollars over the minimum payment due...

Believe it or not, it's actually surprisingly easy to predict in just a few months of the account being open (with relative accuracy of 75%) which accounts will be headed down this road.

Edit: My real point in this thread has more to do with Willing insisting on calling FICO a "sucker score" and insisting that banks use FICO to predict profitability.... this just isn't so

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Excuse the tone if it comes out a bit rough but I've always had a problem with the analysis of the FICO bank card score being called a "sucker score."

If the above statement (willingtocope) is accurate, then why would your score go up if you bring your utilization down? If it truly was a "sucker score" wouldn't be the opposite be true? If companies only want your money and the most of it, then one paying more interest is to their advantage.

I'm aware that your score is not affected with a $0 balance but it IS a fact that your score goes up if one manages credit wisely.

I think that the "sucker score" label is misleading. Especially when it is thrown around so freely in this website.xdancex

I really only know of one person who uses it. Willingtocope, if you haven't noticed, has a very narrow and strong opinion on the matter of FICO scores among other things. He won't change his tune on these issues even when presented with counter evidence (see the exchange above, for example) - but he also offers a lot of good information and perspective.

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My real point in this thread has more to do with Willing insisting on calling FICO a "sucker score" and insisting that banks use FICO to predict profitability.... this just isn't so
Hold on there, big guy. I

I refer to the FICO score that we're allowed to see (and to the FAKO scores that try to approximate it) as the FICO sucker score. None of the people who are going to lend us money rely on that score.

CCs use the FICO Bank Card score...different model, different purpose. The Bank Card score predicts profitability for the CC company (which has nothing to do with our "good credit").

The sucker score encourages us to do things that may not be in our best interest...like carry balances on our credit cards (i.e., "utilization"). The sucker score rewards us for using credit. If you have credit available and don't use it, your sucker score will be lower than if you do. If you have no credit available because you don't have any CCs, your sucker score will be lower. If you have no credit available because you've used up credit limits, you score will be lower...but, not as low as the not having any CCs at all.

Now, the sucker score model IS closest to the Bank Card model...but...while we're led to beleive that a higher sucker score is better...banks use the Bank Card model to maximize profits. That's not the same thing. CC profits come from charging interest. The Bank Card model predicts which of us will let them do that.

The major point I'm trying to make is...FICO is not our friend. They're not concerned with our welfare. They're concerned with giving a good "return on investment" to their customers. Their customers are the people who make money by charging us interest on the money they lend us. (Yes, they want to get their principal back...but...if that's all they get, they'll go out of business).

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Hold on there, big guy. I

I refer to the FICO score that we're allowed to see (and to the FAKO scores that try to approximate it) as the FICO sucker score. None of the people who are going to lend us money rely on that score.

CCs use the FICO Bank Card score...different model, different purpose. The Bank Card score predicts profitability for the CC company (which has nothing to do with our "good credit").

The sucker score encourages us to do things that may not be in our best interest...like carry balances on our credit cards (i.e., "utilization"). The sucker score rewards us for using credit. If you have credit available and don't use it, your sucker score will be lower than if you do. If you have no credit available because you don't have any CCs, your sucker score will be lower. If you have no credit available because you've used up credit limits, you score will be lower...but, not as low as the not having any CCs at all.

Now, the sucker score model IS closest to the Bank Card model...but...while we're led to beleive that a higher sucker score is better...banks use the Bank Card model to maximize profits. That's not the same thing. CC profits come from charging interest. The Bank Card model predicts which of us will let them do that.

The major point I'm trying to make is...FICO is not our friend. They're not concerned with our welfare. They're concerned with giving a good "return on investment" to their customers. Their customers are the people who make money by charging us interest on the money they lend us. (Yes, they want to get their principal back...but...if that's all they get, they'll go out of business).

You're so far wrong I don't even know where to start, so I'm not going to try anymore.

Every proclamation you make that you think is a maxim to this industry is wrong. I won't waste any more of your time or my time trying to make you see the light.

I will add one more thing. Your opinion of FICO and banks and of the financial system in general is jaded by your own poor experiences and is simply not based in reality, but is based in opinion.

You have no idea how things really work and that is more than self-evident from your postings. When you speak from your experience and make these crazy statements that you state as facts you are doing nothing but providing misinformation to those who read your posts and believe you.

In short: you are doing this community (which you moderate) a serious disservice.

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Everyone has and is entitled to their own opinion so lets respect that and move on.

xdancex

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This is a somewhat entertaining thread but perhaps, is missing the bigger picture.

With the exception of one of the folks who work in the actuarial department of Fair Isaac, there isn’t anyone who can say with absolute certainty how the FICO score is truly calculated; astute observers can make observations and even intelligent, reasonable assumptions about it but that’s pretty much it.

Likewise with exactly how a score is going to be used by a lender/potential lender - they all have their individual policies and key information they are looking for and while there is likely a lot of overlap, what type and amount of credit one lender might be willing to extend to an individual may be significantly different than another lender would extend to that same individual even looking at the same credit report/FICO score.

More astounding I think is this near worship of the FICO score.

It does not in ANY way measure a consumer’s wealth nor does it really measure how well a consumer handles his/her personal financial matters – a truly wealthy person (one who actually owns his lifestyle rather than renting it) and who doesn’t use credit for anything will have a zero FICO score. That person, if he wanted to borrow money, is likely a far better “credit risk” than someone with the highest possible FICO score yet, the wealthy consumer would have trouble getting a loan without jumping through a lot of hoops while the guy with a pretty significant amount of debt and maybe even a few negatives can go online, get a CC with a huge credit line approve virtually instantly and then go out and recklessly charge it up to the limit within a matter of a few days.

Does that really make any logical sense to anyone???

Perhaps as significant is the mindset that consumers are entitled to never have a single negative mark on their credit history no matter what they’ve done in the past…they can file BK, have vehicles repossessed, spend every penny they make and concurrently charge thousands to their credit cards until they can’t pay anymore and then they moan and complain when creditors want to get paid or won’t delete the negative tradeline when the consumer graciously offers to pay the bill they promised to pay months or years before.

Such antics only serve to make the FICO score an even bigger joke than it was to begin with. Eventually, I expect some of these lenders are going to grow a brain and demand that the system be changed making it even more difficult than it already is to get truly inaccurate credit report information corrected.

The FICO score is nothing more than a I love debt score because the only way to have a high FICO score is to have no negatives, and have a lot of different kinds of debt (but not too much) and to stay that way for your whole life.

Willing has it at least partially correct; it isn’t just a “sucker score”; the whole system as it currently exists is a “sucker system”!

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So it can't be somewhere in the middle of these two positions?

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I don't think so. Many will try to play that game but it's a bit like being a little bit pregnant.

Either a person commits to a life without debt (that doesn't mean it happens overnight of course) or, they continue to use debt and pay other people interest.

If people simply stopped financing vehicles and took even half of what the "average" car payment is today; invested that amount every month over the course of their lifetime, they would retire with $MILLIONS in the bank...not a few thousand, not just a few hundred thousand, but $MILLIONS.

So, the real choice is retiring with some real wealth or retiring with a great FICO score; as for me, my basset hound and my cat, we would much rather be wealthy.

Compound interest is a powerful thing; those who understand that and use it to their advantage will become very wealthy; those who refuse to understand it (or understand it but refuse to use it), never will be.

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The major point I'm trying to make is...FICO is not our friend. They're not concerned with our welfare. They're concerned with giving a good "return on investment" to their customers. Their customers are the people who make money by charging us interest on the money they lend us. (Yes, they want to get their principal back...but...if that's all they get, they'll go out of business).

FICO is concerned with predicting risk and that is it. I'll even concede to you that many issuers will lend to consumers in the hopes of making fee income, but there are a whole slew of other vendor products that predict this. The FICO score isn't one of them, not the one we see (the "sucker" score) or any of FICO's other products.

Everyone has and is entitled to their own opinion so lets respect that and move on

I will agree that everyone is entitled to their own opinion.

However, it is very hard to swallow a moderator (in a self-help forum) stating his opinions as facts when at the same time I know with no doubt and with hard evidence (that I probably can't post here) that he is wrong. And, that is not opinion.

All this does is further spread misinformation to people who least can afford to be misinformed. It's also irresponsible.

I know that I can speak (write) harshly and in so doing that, I can even be disrespectful. This is not my intention, but I won't make excuses for it, nor will I take it back. I am passionate and I am animate. If that violates the TOS of this message board, then I will not tone it down; I will instead choose to leave and not come back.

"I do not wish to think, or speak, or write, with moderation. . . . I am in earnest -- I will not equivocate -- I will not excuse -- I will not retreat a single inch -- AND I WILL BE HEARD"

Thank you William Lloyd Garrison, truer words were never spoken.

In regards to this topic (the one of credit card profitability): I hate to pull out a straw man argument when we are only discussing opinions, but…

WTC, I can only speculate as to the source of this poor, inaccurate information. (My opinion, which I’m entitled to, is that it stems from poor experiences with the financial industry and your need to rationalize these experiences. If this is the case, it's understandable, even justifiable, but it doesn't make you any less wrong.)

I can tell you that nearly everything I have stated on this topic is a FACT. I can even tell you where I learned it.

After working in the financial industry for years while completing my undergraduate, I first learned in-depth details on the topic of credit card profitability from an advanced graduate class while earning an MBA from Fisher College of Business at The Ohio State University. Further, I've learned an order of magnitude more in my professional experiences than I ever did in the classroom. I’ve been involved in this industry in one facet or another since I was 18 years old.

I’ve worked for three companies in my life. Two of them are:

-First Union Corp.

(The precursor to present-day Wachovia--really Wachovia today is only Wachovia in name, but is really just the old First Union with a new name due to the strong brand name of Wachovia prior to the merger/acquisition-- http://www.firstunion.com/)

I worked as a CSR, Senior Rep, Supervisor, Underwriter and Lead Underwriter.

-Equifax, Inc. (It’s a possibility you’ve heard of them, they’re pretty big in this country, or so they used to tell us…)

I worked as a systems analyst dealing almost entirely with legacy hardware and mainframe software. Mostly for Business Solutions, and I spent a good bit of time interpreting source code. It was certainly much more of a technical position than a financial services position (my undergrad is in Electrical Engineering). However, that didn’t preclude me from learning FICO and understanding the application of the technologies which I serviced.

Today, I work in a different position for a Fortune 100 Company, also in the credit industry who I am sure you’ve heard of.

If you have the evidence that any of your claims are true, I’d be happy to look at it. (Note: this isn’t possible, because they aren’t).

Hell, if you want to ask me a question, I will try to answer it, as long as it doesn’t force me to break any clearances. (Note: If I can’t answer it, I probably have a contact that can.) If you want to continue this debate, we can do that too, but I don’t see a point to doing that.

I’ve decided that this will be one of my last posts. I learned what I needed to from this Web Site, for which I am grateful. And, I was given the opportunity to help a number of people here over time, for which I am also grateful.

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Either a person commits to a life without debt (that doesn't mean it happens overnight of course) or, they continue to use debt and pay other people interest.

I agree wholly with Robert. You either own your life or you don’t. I know this may seem inconsistent because I post an awful lot about the intricacies of FICO and the benefits of making purchases on credit. There are real benefits to having a high FICO and to making large purchases on credit.

The problems arise when everyday purchases transition from regular merchandise and become debt.

Anytime you borrow money longer than 25 or so days, you pay a cost of borrowing. If you don’t pay the debt timely, the present system first punishes you for not paying the debt by means of fees and finance charges and a bad FICO, which in turn hurts the APR on other outstanding debts that you might have… Then, it later punishes you again when you actually do pay old debts by lowering your FICO (although you get punished worse and longer if you don't pay it and get sued). It's a no-win situation once you're in debt.

So.... don't get in debt. It’s really that simple.

You can get FICO scores in the 770-785+ range without carrying high balances, but it’s hard to get them too much higher without carrying huge balances. (Note: this isn’t because FICO wants to make money for the banks; it is because they need to see a repayment history of high balances to truly evaluate your risk) (Note: A score of 770 and proof of assets is good enough for any credit product that I know of)

Something that gets repeated here by R_N, et al., but never seems to sink in is that credit repair should be secondary, maybe even tertiary, on your list of financial priorities.

Everyone should have a debt goal. And, that goal should be zero. It's not that easy, obviously to just say it and have it be so. Then again, it's not that hard, either; zero debt is certainly doable. It is a realistic goal that anyone can attain.

After the debt is reduced to zero, the need to build equity should be tackled; Equity for retirement, equity for a "rainy day" and equity for future purchases. However you want to do it is fine: liquid savings, CD accounts, Money Market Mutual Funds, fixed-income instruments, index funds, SPDRs, hedge funds, SIV... whatever your sophistication, it doesn't matter. Keeping it simple is easier and usually better. As long as you do something to live beneath your means and save the difference... (However meager those means might be)…

Building Equity is secondary to reducing debt only because the average person can't compound their equity nearly as fast as their debt is compounding in reverse. If the only debt you have is a mortgage fixed at a T-Bill Rate plus a small margin, totaling 4.5% or so, then you can smartly build equity before reducing debt. Even then, if it is a 30 year mortgage, you will probably want to pay it down first as 360 months is a hell of a lot of times to compound a purchase the size of a house, (even if you think you have a good APR and a good loan)

(I would argue that one should pay cash for their home rather than procure a mortgage, but that is another topic for another day)

All of this may seem unrelated to this topic. But, it isn't. If you can't do the above, there is no sense in repairing your credit and no sense in having a high FICO. (If you have no money saved and you already have lots of debt, why on Earth would you want to incur more debt? And, why exactly do you need a higher FICO?)

As a wise poster here once said: "too many people come here and expect that there is a magic letter they can write and make this go away."… It doesn't work like that.

There is nothing wrong with the credit industry (It’s a sucker system only if you’re a sucker). Further, there is nothing wrong if you want to use credit to better your financial standing, but paying down debt and building equity are huge prerequisites to this that are too often overlooked.

The steps should be:

1. Reduce Debt

2. Build Equity

3. Credit Repair

Because of the time this will take... as you are completing steps 1 and 2, (especially step 1) your credit scores will skyrocket anyway and without ever writing a single DV, 623, ITS, and even without filing a single dispute to any CRA.

By the time you finish step 1 and 2, even though, your FICO will have improved drastically, you’ll be in a position where you don’t care what your FICO are!

I care about my FICO only because of what I do for a living. I have a quarter of a million dollars of unsecured credit available to me give or take a few thousand, and I’m quite sure that I could get more if I were so inclined…

Far more important to me is that the total balance on all of my revolving accounts is as of this minute $0.00; the total balance on all of my installment accounts is a relatively small 5-digit number which I could pay off tomorrow (without a second thought) if I wanted to.

There are enough people here who state as a matter of fact that they owe $10,000, sometimes way more in charged off credit cards, and also state that they don’t have $500.00 to open a secured card and state that they need to “fix their credit” or that “Equifax, Experian, Trans Union are screwing me over”… all in the same post sometimes… Some of these people even have lawsuits pending... Obviously, these people haven’t learned anything from previous missteps. These are certainly not the intended audience of my postings.

If you do steps 1 and 2, step 3 is easy. Because you will A. have let some serious time elapse making the junk debts more worthless and B. because you have $$ with which you can negotiate settlements on these junk debts.

Also, doing steps 1 and 2 will not only help you to repair your credit, but also will help you rebuild it.

For example:

Take $10,000 and go to a bank, almost any bank, preferably (especially in the wake of IndyMac Bank) one that has FDIC insurance…

-Open a savings account and deposit $10,000.

-Speak to a banker about a 24-36 month “credit helper” loan or a “secured installment” loan.

-The bank will give you another $10,000 which you have to pay back over time and will also place a lien on the $10,000 in your bank account. Now, you are earning interest on those funds (probably at a rate a few points lower than the rate you are paying)

-Take the $10,000 from the bank and open 2 $5,000 secured credit cards. Citi Card will let you put the proceeds into an FDIC insured CD for 18 months, which you will also earn interest on. BofA also lets you earn interest on your security deposit.

-Make all of your loan payments on time and sit back and let your money compound and your TL report.

2-3 years later you will have:

1. A fully paid off Installment loan, never late, original balance $10,000

2. A credit card with a limit of $5,000, never late, open 2-3 years

3. Another credit card with a limit of $5,000, never late, open 2-3 years

4. You'll also have roughly $20,000 cash (lien released on the original 10k and each sec dep of 5k returned)

(Note: in this example, both of these credit cards would be from prime lenders and would be $10,000+ TL very soon after this 2-3 year timeframe)

If you think this is a lot of money, and too hard to do... and/or you can’t come up with $10,000 to pay yourself, how will you ever come up with any money to pay back someone else?! (The sad answer is: you won't. You'll run the debt treadmill forever and "you'll work 'til you drop".)

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(It’s a sucker system only if you’re a sucker).

A++++++++++++++++++++++++++++++++++ !!!!!!!!!

BigWoody, don't leave us! :)

PS: I just got four tickets to the Sept. 16 Ohio State/USC game in LA. (Of course, I'm a Buckeye though). I've been trying to get them since April. And I paid cash. ;)

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...

No one wants to see you go. You are an asset to this forum, please stick around.

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