GuyInTexas

Question about FICO

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I'm going too! Small world...

You, me, and 90,000 other people. My parents got their travel tickets and are flying out so it will be a great time.

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Leave, don't leave. Doesn't matter.

If one is wise enough to question anything in this world and especially in this website, they'll do alright. I'm sure you were once financially ignorant like most of us and there are plenty of resources out there for learning what rich people know about money and practice with money.

You are completely spot on everything and I agree that the credit system is a useful tool when resources are tight and ignorance is high but pretty much a waste of time and attention when one truly starts managing money correctly and begins losing the bad habits and ignorant activities that leads one to financial despair.

So, if that was your last post, see ya! If not, then that's cool too!

Sometimes this site can become a crutch when it's full of differing opinions. It's really hard to filter everything out when moderators throw out phrases like "sucker score" although I completely understand the point that Willing is trying to make...maybe its not being typed out right?

I'll just go back to my original opinion in that FICO scores climb when debt is managed wisely. Punishes when it's not.

I think we can all agree on that one point.

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This thread reminds me of my brother........

If I voice my opinion, I am "shoving my will down his throat". If he voices his opinion, he is just exercising his first amendment rights...besides he is 'only trying to wake up' all of us neocons. :roll:

There was a point in this thread where bigwoodsy mentioned "Contrary to popular belief, banks would rather have every customer PIF by the due date."

I disagree.

Not too long ago folks started getting their credit cards closed by credit grantor - not because they had ever been late, but because they PIF every month.

Banks give credit cards to make money. Period. If you PIF every month, you cost them money. Not only do you not put money IN, you cost them by them handling your acct. This is why many creditors began closing cards for consumers who PIF'd.

Another piece of anecdotal evidence of Willing's position......

The subprime mortgage market... The reason why it got so huge (before the bubble burst) was there was a ton of money to be made in these subprime mortgages! Now, a mortgage FICO is not the same as what Willing called the sucker score.... I mention this piece of data to show that the banks were not only willing, but eager to award subprime credit because that is where the money is.

Each grouping of FICO scores gave you a different interest rate. But ultimately, there was a 'cutoff score' even they weren't willing to go below.

FICO is a risk score and banks love to use that term....it justifies it to the consumer when they pay a higher interest rate (thererfore making more money). Period.

Funny thing about FICO....when I had 22 pages of bad credit which included BK, a dozen unpaid (but discharged) judgments, lots of collection accounts, blah blah blah....my FICO was higher than it is right now!

I have 1 negative TL that is paid. I have 2 old med collections. (watching that clock!) The rest is all green for the past 5 years. I was definitely a higher risk way back when. The lower FICO I have would be used to justify a higher rate so the banks could make more money, because their "risk assessment" of me would, in fact, be inaccurate in reality. Because the truth is, I am far MORE likely to pay my bills on time now than I was before.

Regardless of industry, business is all about making money and getting into the hands of the shareholders.

Bigwoodsy, you're welcome to express your opinion. That is what sites like this are all about. You have every right to disagree with Willing (and me, for that matter). I don't agree with everything that Robert_Nashville posts either, but he does make valid points. Everyone here on this site is welcome to take what they choose to take and leave what they don't. We all have different goals. (Mine is definitely a FICO over 700 not zero :mrgreen: )

So stick around.

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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.
Sorry you feel that way. This is, after all, a discussion forum, and all points of view are welcome.

I do want to make a couple of things clear, however.

Words are powerful stuff. If we use words that aren't entirely self defined, our readers tend to thing they know what we're talking about. The term "FICO Bank Card" score conjurs up images of:

1.) offical-dom (FICO...many people think that's a government sponsored organization),

2.) used by Banks (not entirely true. Most CCs are issued by "credit card" issuing subsidiaries, not governed by the same laws as bank. That's why "charge off" is meaningless to a CC.

On the other hand, "sucker score" makes people stop and think..."is worrying about improving this in my best interest?" My answer is no. I've explained this on several occasions.

My intent is make people think about what they've been told. If I have to coin new terms to make people do that...I will.

(And, if you want to compare resume's. I've been in the computer game for over 40 years. I've worked for major banks, major manufacturers, a couple of household name scientific institutions, the US government, and more small to medium size companies than I care to mention. I've run the $100 Million dollar budget for the computer operation of a company whose trademark you would recognize in a minute, I've been a regional vice president for a major consulting company, and, I've owned and operated my own mutli-million dollar business, which I lost when some of those "world class" organizations we worked for declared BK and left us holding worthless invoices for more than a million dollars. Yes, most of my experience with the credit industry is from the consumer side...but, that's what this forum is about...and, for the most part, it hasn't been good. Why? Because, while working in that industry, I beleived the "party line". I beleived that they had a system of checks and balances that was intended to keep us debtors from crossing the line between "managing our credit" and doing things that were downright stupid. When my credit pile starting falling down, I wanted to know why. Yes, a lot of it was my fault...but, looking back on it, I had a lot of help. I had CC companies lining up to give me new cards and lines of credit...right up until the day we closed our doors. Our total CC balances were in the hundreds of thousands...but our FICO Bank Card score, that our "personal banker" showed me, was in the high 700's. We were carrying a debt load that any reasonable person would have known was unsubstainable, but, they wanted to lend us more! My fault for taking it? Yes. But, the system sure seemed to be designed to make it possible.)

So, I add my voice to those asking you to stick around. Your knowledge of the inner workings of the FICO system is useful. I think we can have a meaningful discussion about some of its nuances without resorting to name calling.

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.

Very well said mom. I just have to say one thing. I don't think it's fair to say the credit card company makes nothing when you PIF every month, we need to remember that the merchant, where we used the card has to pay usually a 1% fee to the credit card company, so they make something, especially if it was a big purchase.

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Actually, when we were taking credit card payments in our business a few years ago, the merchant charge ranged more in the 4-8% area. From a profit for the bank standpoint, my guess would be that maybe 1/4% of that was actually net profit.

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There is a difference between making nothing, making something and making "enough".

Banks cancel CC for those who pay in full because if transaction fees are all they make, ther aren't making "enough" (enough as decided by the entity that issued the CC).

Interest and especially fees that can be added on (at HUGE APRs when you do the math) are virtually pure profit; profit they don't get when people pay off their balances every month...that's why banks build huge buildings while their "customers" slowly go broke.

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Actually, when we were taking credit card payments in our business a few years ago, the merchant charge ranged more in the 4-8% area. From a profit for the bank standpoint, my guess would be that maybe 1/4% of that was actually net profit.

My brother has his own business. I'm just going by what he pays, which is 1%. The first machine he had, he had to pay 1-3%, it was a scale system.

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If I voice my opinion, I am "shoving my will down his throat". If he voices his opinion, he is just exercising his first amendment rights...besides he is 'only trying to wake up' all of us neocons. :roll:

Well, anyone can state an opinion. When an opinion is stated as a fact and that fact is not a fact at all, but fiction, it’s hard to sit idly by.

Contrary to popular belief, banks would rather have every customer PIF by the due date.

Perhaps, I should revise it to say “most banks”. The point remains, PIF is good for the lender. The ability to sell credit card debt at a AAA rating is more important than fee income for any respectable issuer. Further, many of the decisions made by these issuers who “closed card by credit grantor” had little to do with card holders who PIF. It had more to do that these card holders had gotten into trouble lending improperly and at the same time they had large amounts of available balances that were unused. They needed to “clean the books” and remove the excess available credit whether it was consumer-friendly or not, and whether it meant their bond rating might suffer… They needed to do this to make sure loss reserves were at an adequate level…

I can respect your opinion here, even though it’s still wrong, a whole lot more than I can respect Willing’s… because it has a basis. I would also note: anecdotal evidence is worthless if you’re not privy to financial statements and/or company memos…

Another piece of anecdotal evidence of Willing's position......

The subprime mortgage market... The reason why it got so huge (before the bubble burst) was there was a ton of money to be made in these subprime mortgages! Now, a mortgage FICO is not the same as what Willing called the sucker score.... I mention this piece of data to show that the banks were not only willing, but eager to award subprime credit because that is where the money is.

Each grouping of FICO scores gave you a different interest rate. But ultimately, there was a 'cutoff score' even they weren't willing to go below.

As for sub prime loans and the banks’ greed….

Sub prime loans are hardly new. Only greedy banks got involved in sub prime loans. Unfortunately, that was far too many. Banks didn’t learn from the past, even the recent past… Smart banks learned their lessons.

Of course, you’re generalizing here. All banks didn’t view sub prime mortgages as a golden goose. You didn’t see Wells, JP Morgan or Goldman overextending loans to people with sub prime credit. You also didn’t see local credit unions or smaller regional banks doing it, either. Bank of America wouldn’t have had much exposure without the untimely purchase of Countrywide… This was mostly large regional banks, WaMU, National City, Sun Trust, Regions, Sovereign, Wachovia, et al., who got in trouble… and don't forget that a lof of this was forced upon them by legislators who wanted everybody to be able to afford a home. Banks weren't allowed to "redline" any loans for fear of being sued for not following the "Community Reinvestment Act"..

Those who forget the lessons of the past are doomed to repeat them.

I see so few analogies in the press comparing today’s collapse to the 1998 sub prime collapse. (which were both fueled by declining home prices). One such company that I remember very well was the The Money Store, which nearly dragged First Union under, and ultimately IMHO forced the change of name and the merger with Wachovia… (Amazingly, Wachovia/First Union didn’t learn from this and was front and center during this sub prime crisis as well as the last one)

http://query.nytimes.com/gst/fullpage.html?res=9903E6DC1031F936A35750C0A96E958260

http://en.wikipedia.org/wiki/Wachovia

I remember it like it was yesterday… it cost me 70% of my portfolio at a time when I was just starting out. Smartly, I recognized the signs this time, the second time around, (second time for me, 1287475th time for the world) and I have nearly doubled my market assets YTD… You could say that I had been waiting years for the sub prime bubble to burst.

But, I digress, the point here is: yes, banks extended credit improperly to people with low FICO/high risk. These people did in fact turn out to be high risk. FICO had these people pegged, and the banks ignored it. All of this hardly supports Willing’s stance that FICO is about predicting profitability for banks…

FICO predicts risk, not whether you are a “sucker”. That’s the topic here.

Funny thing about FICO....when I had 22 pages of bad credit which included BK, a dozen unpaid (but discharged) judgments, lots of collection accounts, blah blah blah....my FICO was higher than it is right now!

I understand why you think that’s a funny thing about FICO, (22 pages of bad files and a higher score, then, than you have now…). The fact is: FICO is about predicting trends. The 3 digit score you see is made up of a number of sub scores, which are based on statistical “walks”. I could express this easier if I could use mathematical shorthand and diagrams… anyway, all these subsets of data streams predict trends. Your file back then showed that you were expected to trend higher. And, so your score was high. And, that is exactly what happened. FICO had you pegged as well.

FICO is a guideline. It’s not an absolute. It’s certainly possible that you’re a better risk now than you were then, even though, your FICO is lower. There are other guidelines anyone who will lend you money will need to know beside your FICO.

There are a myriad of other reasons why I know your FICO was higher then than it is now, and it has to do largely with data you don’t see on your current file. There is a huge misconception that FICO only bases things off your current file, the one that is disclosed to you, but that isn’t exactly true. There is also have the problem of inaccurate reporting from the DF, ID Theft and everything else that can mess with a score, and even when those are removed from a current file, they can sometimes still affect a FICO score for years.

The point here remains as well: FICO is a guideline for predicting risk. Whether it gets it “right” all of the time (even when all of the data is correct) is debatable. However, there are no secondary “profitability” predictions located inside FICO.

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Sorry you feel that way. This is, after all, a discussion forum, and all points of view are welcome.

I do want to make a couple of things clear, however.

Words are powerful stuff. If we use words that aren't entirely self defined, our readers tend to thing they know what we're talking about. The term "FICO Bank Card" score conjurs up images of:

1.) offical-dom (FICO...many people think that's a government sponsored organization),

2.) used by Banks (not entirely true. Most CCs are issued by "credit card" issuing subsidiaries, not governed by the same laws as bank. That's why "charge off" is meaningless to a CC.

On the other hand, "sucker score" makes people stop and think..."is worrying about improving this in my best interest?" My answer is no. I've explained this on several occasions.

My intent is make people think about what they've been told. If I have to coin new terms to make people do that...I will.

(And, if you want to compare resume's. I've been in the computer game for over 40 years. I've worked for major banks, major manufacturers, a couple of household name scientific institutions, the US government, and more small to medium size companies than I care to mention. I've run the $100 Million dollar budget for the computer operation of a company whose trademark you would recognize in a minute, I've been a regional vice president for a major consulting company, and, I've owned and operated my own mutli-million dollar business, which I lost when some of those "world class" organizations we worked for declared BK and left us holding worthless invoices for more than a million dollars. Yes, most of my experience with the credit industry is from the consumer side...but, that's what this forum is about...and, for the most part, it hasn't been good. Why? Because, while working in that industry, I beleived the "party line". I beleived that they had a system of checks and balances that was intended to keep us debtors from crossing the line between "managing our credit" and doing things that were downright stupid. When my credit pile starting falling down, I wanted to know why. Yes, a lot of it was my fault...but, looking back on it, I had a lot of help. I had CC companies lining up to give me new cards and lines of credit...right up until the day we closed our doors. Our total CC balances were in the hundreds of thousands...but our FICO Bank Card score, that our "personal banker" showed me, was in the high 700's. We were carrying a debt load that any reasonable person would have known was unsubstainable, but, they wanted to lend us more! My fault for taking it? Yes. But, the system sure seemed to be designed to make it possible.)

So, I add my voice to those asking you to stick around. Your knowledge of the inner workings of the FICO system is useful. I think we can have a meaningful discussion about some of its nuances without resorting to name calling.

I only called you wrong and irresponsible. Which, in retrospect, you are probably guilty of the former and not the latter. It's understandable, though.

You can call me brash and pedantic, if it makes you feel better. I probably am.

I like different viewpoints. I especially like consumer viewpoints, because I never was truly a consumer. Further, understanding how consumers think and feel about these issues helps me professionally. It's free marketing research for me. (One day I plan to use this intellectual property that I have long since been gathering in my own designs)

Anyway, the still underlying basis of my learning about credit cards came when I was 18-21...

For 2.5 years, I answered the phone as a CSR. I spent countless hours talking to customer's who had hundreds of thousands of dollars in credit card debt. These people were irritable and didn't trust a word I said, asked me to repeat everything three times, even though I knew they heard me... and wanted their late charges, finance charges, over limit fees removed and wanted to speak to a supervisor... (later when I was a supervisor they wanted to talk to my supervisor's supervisor). Further, these people didn't care to learn and the information I offered them freely was ridiculed and they told me their own misinformed theories of how banks operate..

Conversely, I spent countless hours talking to customers who had zero dollars in credit card debt and hadn't paid a finance charge ever for the life of the card (which was sometimes 15 years+ old) and wanted to know how many of their 375,000 air miles they had accumulated could be converted to cash and could we just put the cash in their bank account? (we could)... when these people asked questions, I answered them, and they would ask further questions and I would answer them, and they would thank me for the information.

As it further relates to this topic, CSR (even the ones who can barely speak English) have access to the consumer's FICO and a recent report (if the issuer soft pulls regularly).. I would always look to see who had what FICO and make a mental note. The person with no debt always had the better FICO.

These were hardly "suckers". And, it's hardly a "sucker score". Striving for a high FICO doesn't make you a sucker in and of itself...

It was easy to see what type of customers I wanted to emulate. In a primitive sense, Debt=bad;Equity=good... even if I wouldn't have continued in the financial services, getting this hands-on look at that time in my life helped me in a way that I cannot articulate.

To be honest:

I think we see eye-to-eye on most things.

The real point here is that FICO does not predict profitability and should not be called a "sucker score". There are at least ten other popular vendor products (mostly used by subprime issuers) that can do this....

If you're afraid of being eaten by a wolf, then don't be a sheep..

The more you learn about it, (if you ever learn more about it) the more you'll see that the FICO program is pretty amazing and should be viewed as a technological wonder. Instead, and, like all things that are not fully understood, it is ridiculed by those who are skeptical...

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You can call me brash and pedantic, if it makes you feel better.
I probably would pick other adjectives, but those will do for a start.
As it further relates to this topic, CSR (even the ones who can barely speak English) have access to the consumer's FICO and a recent report (if the issuer soft pulls regularly).. I would always look to see who had what FICO and make a mental note. The person with no debt always had the better FICO.
My question would be...which FICO score? I'm not saying that all FICO's are sucker scores...only the one that's presented to the user in the "do you know what your credit score is?" vein. Anything that's includes a calculation that measures how well you use available credit (i.e., "utilization") and rewards those that do, encourages people to use unsecured credit. IMHO, a sucker's game. Been there, done that, and lost.

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I probably would pick other adjectives, but those will do for a start.

My question would be...which FICO score? I'm not saying that all FICO's are sucker scores...only the one that's presented to the user in the "do you know what your credit score is?" vein. Anything that's includes a calculation that measures how well you use available credit (i.e., "utilization") and rewards those that do, encourages people to use unsecured credit. IMHO, a sucker's game. Been there, done that, and lost.

It's probably the "Institutional series-II [beacon/empirica/exp]"

which as far as I know is a weighted average of the traditonal classic and bankcard models..

(Unless it's a HELOC, in which case it's probably a mortgage score.)

These are minute details. The emphasis being that even lowly CSR can see your reports and your FICO anytime you call about a credit account... The scores and report outlines get programmed into the mainframe software on whatever customer management system the banks use.

Most issuers buy a package from FICO that updates either quarterly or semi-annually... (FWIW, if it's quarterly, it's generally TU, if it's semi-annually it's usually EQ, it's rarely EX--- they don't do well in this market of regular soft pull)...

There are other issuers who are adapting new technology that updates continuously. By far the coolest of these products is QlikView... (http://www.qliktech.com/home.aspx?LangType=1033)

FWIW, this is a Swedish owned company headquartered in Philadelphia, but does their research out of Raleigh (Triangle Research Park, which I recently posted in another thread). Annual rate of growth something like 80% 4 consecutive years... Eventually, they will go public (not an insider tip, just my opinion--I would think rewards too great not to) So, QlikView Technology may be part of your vocabulary within several years...

(of course that's off topic and is applicable to things way more important than credit soft pulls)

I digress, again... Anyway, as it stands today, your report (in the issuers mainframe) is most always 0-4 months recent or 0-6 months recent... Never will this information be more than 7 months old.

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If the above statement (willingtocope) is accurate, then why would your score go up if you bring your utilization down?

That answer is simpler that you may think. You pay off revolving credit so your score goes up (utilization goes down). This triggers the lenders to extend more credit as your score goes up. You can now carry a larger balance without affecting your utilization as readily. The higher the balance you carry, the more they make...especially with two-cycle billing.

It's really not that hard to figure out how it really works.

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I completely understand that statement. That was exactly my point. The question IS the answer. I just didn't agree with the original argument.

Rhetorical questions are tough.;)

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Woodsy,

You have your right to your opinion. However, notice how I stated "I disagree" That expresses an opinion. "its wrong" is a statement not an opinion.

You believe I am wrong. You have your opinion and what you base it on. That does not make me wrong.

Understand there are many people on this site just as intelligent as you are. (ie: my undergrad degree is EE with a minor in physics, spent 8.5 yrs as a "rocket scientist" with the USAF and NASA, and for the past 15 yrs have been programming computers - yes in the financial world as well (have your heard of Fidelity?))

You linked wikipedia which is not a valid resource. Data there is entered by anyone...heck Willing and I could join forces and put our beliefs on wiki as fact!

You also linked to NYTimes. A not so great resource either. NYT has been known as one of the most left slanted papers out there and much of what they print is slanted to their opinion.

What I see here is that you have a very strong opinion and that your personal experience of being ridiculed has you angry. I call that my "stupid button." I don't like being challenged on what I know for a fact is true! Unlike you, I have the downside of being female, blonde and not homely.

When I worked on the Hubble Space Telescope program, I told those folks PRIOR to launch what I thought was wrong with the Telescope itself. They never tested the mirror. They believed that since it was built for a land based telescope first, that it was already tested. Also, it has 6 reaction wheels (this is what moves satellites (in place) on orbit). The brand installed was known to fail on orbit, so even full redundancy would be a problem eventually. They laughed at me. So, of course the first problem they had was that they couldn't focus the mirrors! Gee, ya think! The next problem was actually the solar panels which were installed like wings and vibrated every time the satellite crossed the horizon. (every 15 min for LOE) Then.... the reaction wheels began to fail. Once 3 failed they had to fly the shuttle to go replace them.....which would have been so much cheaper if they did it BEFORE LAUNCH!

Of course my example is based on science.

"There are a myriad of other reasons why I know your FICO was higher then than it is now, and it has to do largely with data you don’t see on your current file. There is a huge misconception that FICO only bases things off your current file, the one that is disclosed to you, but that isn’t exactly true. There is also have the problem of inaccurate reporting from the DF, ID Theft and everything else that can mess with a score, and even when those are removed from a current file, they can sometimes still affect a FICO score for years." - I guarantee that if you made this statement to FICO they would tell you that you were wrong.

You may have worked at a CRA, you didn't work as a programmer or an actuarial for FICO. Unless you are directly privvy to the formula that no one knows, you cannot say this with any amount of credibility. Sorry.

We have now reached the point where we must agree to disagree.

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Unless you are directly privvy to the formula that no one knows, you cannot say this with any amount of credibility. Sorry.

We have now reached the point where we must agree to disagree.

I think the last statement is correct.

In BWS's defense, I have had several private conversations with him. I do not think that he is trying to assert that he has any greater intellect than others in the forum. I do think that his professional experience has made him aware of and privvy to nuances of the financial industry that even the most intelligent of us who aren't part of that industry couldn't be aware of. Yes, he is making some claims of knowledge about FICO scoring, but this all started (not the OP's question, but the debate) about what banks and financial institutions want from their customers in terms of paying in full, carrying balances, etc. With the positions he's had in several organizations (not just a CRA), he is in a position to speak credibly and intelligently about these matters.

But the quality of evidence is in the ear and brain of the beholder. We all process information differently and appreciate/value different types of evidence differently. For some of us, personal experience and the anecdotal experiences of others we've heard about vicariously are more important than data or so-called expert/authority claims. And vice versa. I personally find BigWoody's insights to be quite credible - and it is up to the reader to distinguish fact from opinion. Some of what he writes is opinion and clearly biased. But some things he writes, I accept with some degree of truth because of the way my brain processes information and evaluates claims. I have trouble accepting the opinions of people who clearly have an ax to grind as a result of their past experiences. Those opinions work for those people, and I learn things from them, but I can't always apply them to myself.

So, my message is, I hope that anyone reading this will just figure out for themselves what they're comfortable with. One thing I hope we all agree on is that the best thing you can do is use your credit and other financial resources responsibly. Pay your bills. The goal of zero FICO will never be something I work for - I live in an area where the average home price is close to a million dollars and the median isn't much lower. Credit will always be a part of my life. If that makes me a sucker in some people's eyes, so be it. But I know I'm no sucker and that's all that's important!

In conclusion...I appreciate the contributions of "almost" everyone ;) in the forums and most certainly everyone in this thread! Thanks for everything! These forums have given me so much food for thought far beyond any so-called "credit repair" - but about my entire financial picture.

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Understand there are many people on this site just as intelligent as you are. (ie: my undergrad degree is EE with a minor in physics, spent 8.5 yrs as a "rocket scientist" with the USAF and NASA, and for the past 15 yrs have been programming computers - yes in the financial world as well (have your heard of Fidelity?))

Is that all???

All this time I figured you graduated from MIT at age 14 and a Rhodes Scholar! ;)

Did you work on the Gemi or the Mercury program??? :)++

Just kidding...don't hit me. :)

You linked wikipedia which is not a valid resource. Data there is entered by anyone...heck Willing and I could join forces and put our beliefs on wiki as fact!

On a bit more serious note, I've found Wikipedia to be a reasonably good source of information and in any case, people need to evaluate every resource they use for information whether it be bound in a book, a TV news show or (and especially) the internet (although I agree, I'd never use the NY Times as a resources other than if the TP runs out).

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Actually, when we were taking credit card payments in our business a few years ago, the merchant charge ranged more in the 4-8% area. From a profit for the bank standpoint, my guess would be that maybe 1/4% of that was actually net profit.
Correction. In a story on CNN this morning about high gas prices, the operator of a service station stated that he pays less than 3% to the CC company for allowing customers to use credit. He was complaining that 3% was essentially his profit from the oil company...therefore, he was essentially making no money selling gas on credit. He was offering a 10-cent a gallon discount to customers who used cash.

(I'll admit my 4-8% comment was based on 10 years ago. Apparently, CC companies have decided they'll make more money by encouraging merchants to let people buy on credit.)

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Correction. In a story on CNN this morning about high gas prices, the operator of a service station stated that he pays less than 3% to the CC company for allowing customers to use credit. He was complaining that 3% was essentially his profit from the oil company...therefore, he was essentially making no money selling gas on credit. He was offering a 10-cent a gallon discount to customers who used cash.

(I'll admit my 4-8% comment was based on 10 years ago. Apparently, CC companies have decided they'll make more money by encouraging merchants to let people buy on credit.)

Actually, what processors charge can vary greatly from one business to another; I don't think it would accurate to say that there is any one "normal" % fee...the possible range is pretty broad I think.

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Understand there are many people on this site just as intelligent as you are. (ie: my undergrad degree is EE with a minor in physics, spent 8.5 yrs as a "rocket scientist" with the USAF and NASA, and for the past 15 yrs have been programming computers - yes in the financial world as well (have your heard of Fidelity?))

...

What I see here is that you have a very strong opinion and that your personal experience of being ridiculed has you angry. I call that my "stupid button." I don't like being challenged on what I know for a fact is true! Unlike you, I have the downside of being female, blonde and not homely.

Your point is taken, but was unnecessary. I’m flattered you say that I am “just as intelligent”… Truth be told, there are many here who are [way] more intelligent than I. I never questioned anyone's intellect, and certainly not yours. My successes are derived from the fact that I have the ability to work extremely hard for a very long time. I also have a knack for exploiting opportunities. I've found that my intelligence level is just enough to get by.. barely.

I'd also to like to point out that I am not angry. I only find it irresponsible for others to post things they think are true and state them as facts. This aids conspiracy theories, and spurns distrust and fear from anyone who may believe them.

Note:

None of the above means I can't point out something I know for a fact to be wrong. I'm only trying to further the truth and clear up misconceptions. These misconceptions are rooted so deeply within some people (yourself included), that this is an effortful process.

When I worked on the Hubble Space Telescope program, I told those folks PRIOR to launch what I thought was wrong with the Telescope itself. They never tested the mirror. They believed that since it was built for a land based telescope first, that it was already tested. Also, it has 6 reaction wheels (this is what moves satellites (in place) on orbit). The brand installed was known to fail on orbit, so even full redundancy would be a problem eventually. They laughed at me. So, of course the first problem they had was that they couldn't focus the mirrors! Gee, ya think! The next problem was actually the solar panels which were installed like wings and vibrated every time the satellite crossed the horizon. (every 15 min for LOE) Then.... the reaction wheels began to fail. Once 3 failed they had to fly the shuttle to go replace them.....which would have been so much cheaper if they did it BEFORE LAUNCH!

Congratulations on being perceptive. In my world, that counts for nothing. If our positions were reversed, you can bet that I would have made someone in power aware of my concerns and if that person laughed at me, then I would have found someone else, or I would have tried another approach. That wouldn't have been the end of it. I would have been tireless in my efforts to be heard. It would have been the right thing to do. Also, opportunities to prove oneself on that scale can be few and far between. Since you didn't communicate your position, IMHO, you wasted the opportunity.

I guarantee that if you made this statement to FICO they would tell you that you were wrong.

Maybe at first, but they wouldn’t after I introduce myself and tell them what I do. We have access to a good bit of their production tools, and some in our department meet regularly with their analysts.

You may have worked at a CRA, you didn't work as a programmer or an actuarial for FICO. Unless you are directly privvy to the formula that no one knows, you cannot say this with any amount of credibility. Sorry.

Wrong. In addition to the above, when I worked for EQ, I had access to a full production simulator. I would play trial/error for hours at a time seeing what does what and testing the limits. Later, I learned most of my hypotheses were right.

Obviously, I can't go too much further in depth here.

At one time, I was going to post a thread and title it FICO scoring: why everything you know is wrong...

I ended up writing it out in a very rough format, and I still have it on my desktop. It's 15 pages single spaced, about 7500 words. I thought better against posting it. I've signed so many non-disclosure agreements, I don't even know what I'm allowed to say, or when and if these agreements expire.

You linked wikipedia which is not a valid resource. Data there is entered by anyone...heck Willing and I could join forces and put our beliefs on wiki as fact!

You also linked to NYTimes. A not so great resource either. NYT has been known as one of the most left slanted papers out there and much of what they print is slanted to their opinion.

I agree with that. NYT and any wiki source are questionable by their nature. However, in these instances both of those articles are spot on. I could post other sources.

The material within the sources is the point.

The history of First Union/Wachovia can be readily verified in a lot of other places. The history of The Money Store and of the 1998 housing collapse could also be verified elsewhere.

In this case, it's credible. It also was somewhat of a tangent from the primary topic…

You believe I am wrong. You have your opinion and what you base it on. That does not make me wrong.

You’re right about that.

Nothing makes you wrong except being wrong. And, you are wrong.

I've been nothing but forthright and all I get is skepticism and ridicule in return.

Everything I have ever said [during my entire stay at CIC] has been predicated in facts, and I made sure of this. And, when it wasn't, I clearly stated IMHO... As I alluded to earlier, I'll be leaving here shortly. (no big deal, I know)...

I've devoted a lot of my own time to helping people here at CIC through PMs and through private emails and through my limited postings in the forum. I was happy to do this, but you have helped me see, going forward, this time will be better spent doing other things... participating in a Rotary Club, writing "The Great American Novel", going to baseball games, et al....

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It’s difficult; and generally ineffective to be too adamant about one’s “facts” on an internet forum such as this where one’s real identity and background and specific credentials are not even known.

It’s not that a person’s “facts” might be wrong, it’s just that they are often difficult if not impossible to prove…well thought out opinions and theories are similar in that we don’t exactly have the luxury of using the scientific method of proving or disproving a hypothesis and supporting our conclusions.

I have multiple degrees and more than a couple of decades of experience…I KNOW that my opinions are correct. :) Nevertheless, while I’ll proclaim them, I don’t and can’t really expect anybody to necessarily listen or agree with them (it's very frustrating, too :)++ ).

When it comes to the stupid (and yes, I think it’s very stupid) FICO system, I KNOW that all it really is, is an I love debt score…you can’t have a FICO score unless you constantly keep what the FICO system considers a “reasonable” amount of debt in your life forever. So, I really don’t care what makes a FICO score go up or down or how much utilization is enough but not too much or what the intricacies of their model(s) might be.

That’s because I know debt is the real enemy to an individual's wealth and prosperity. Most people don’t see it that way and why should they? After all, banks/lending institutions spend billions of dollars every year to convince us all that debt is not only our friend but an absolute necessity of life! I always find it strange that debt has become such a “necessity” of life today when personal debt was almost unheard of; even considered shameful just a few decades ago. One lone voice, or even many voices, on an internet forum can never compete with the almost flood of ads that promote debt.

With that said, I love a good argument and I’ll debate all day long; but we (and especially I) need to keep everything in perspective and not get too carried away or loose sight of why we, and this forum, is here.

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I just wanted to say, what a wonderful thread this is. I am thourghly enjoying reading everyone's well thought out, intelligent statements!!!!:twothumbsup:

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So thanks to this thread, my thread ("What would help my score more" in Credit Repair) was locked.

I still have a few unanswered questions and I was really hoping I could get help from other people who'd been in my place before. I don't understand why a moderator would lock a thread like that.

I also don't understand why this person would use silly childish terms like "fako" and "sucker score". I don't see anything convincing in this thread that there's some conspiracy involving multiple credit scores - and I sure haven't read it anywhere else in my research. If this moderator has uncovered such a thing, I'm sure it would be very shocking and important news to a lot of people.

Anyhow, I guess I'll repost my question in a new thread and hope a mature adult who's either been where I am, or has some advice they can give me will help me.

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I do apologize for locking your other thread, but I thought it was about to degenerate into the sort of argument that took place here. If there are any further such comments on this thread, I will lock it also.

Now, for the record

I also don't understand why this person would use silly childish terms like "fako" and "sucker score". I don't see anything convincing in this thread that there's some conspiracy involving multiple credit scores
The term FAKO is used quite often on this board to refer to the scores that the 3 credit reporting agencies report on their own. They are "estimates" of the FICO Bank Card score, and no one who is going to lend you money uses those to make their decesion. the only scores that matter come from FICO directly.

And, while I will take credit for coining the term "sucker score", if you google it you will find it is used in many credit related web sites besides this one...in posts that I did not create.

I'm not sure the term "conspiracy" applies, but I assure you there are indeed mutliple FICO scoring models, used by different industries to predict the "risk" involved with lending you money, offering you employment, and even extending you insurance. Notice I said "risk"....some companies, notably CC, also use FICO scores to predict "profitability". The two terms are not mutually exclusive. Some CC are willing to take higher risk and lend to people with lower sucker scores because they beleive they will make a higher profit.

So, if you feel I am not "adult" enough to respond to your posts, I'll be happy to ignore them. Good luck.

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Ultimately I'm just here to get help. Internet forums always turn everything into arguments. If you're telling me that my secured card isn't really helping my credit score even though it seems to me that it does, I suppose I'll just have to take that (along with any other advice I get) with a grain of salt. Thanks for taking the time to answer some of my questions, and address my concerns.

-shane

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