Posted on 06/02/2022 7:43:08 AM PDT by millenial4freedom
Hi All,
One of the latest talking points of the mainstream media and its band of pavlok-dog economists is that credit scores for all individuals, particularly homebuyers, are much higher than those pre-GFC (Great Financial Crisis).
However, we all know that the Swamp, particularly the likes of Fauxcahauntas, has ruthlessly inserted itself into consumer financial affairs for the last 100+ years.
So I have to ask, have their been efforts made and/or regulations enforced that essentially water down credit scores for consumers? In other words, would many (maybe not all) individuals with an 800 credit score today have the equivalent of a 720 score if standards were applied from 2004?
I figured that someone involved in community banking might be more familiar with this, but I'm open to hearing commentary from anyone else, of course.
Thanks!
You mean like grade inflation?
My suspicion: we are all being trained by frequent free access to credit scores, following “the rules” to improve scores. We are not necessarily more creditworthy, but are behaving for the “test”, holding on to old credit cards, possibly adding lightly used new accounts we don’t need, etc.
One thing I learned, was that despite the fact that I had too few open accounts, my opening an account for a large vet bill and paying it off did not help my score at all. The bureaus like mortgages, car loans, credit cards. They are NOT keen on installment loans and credit based payment plans.
Too lazy to do research?
I do retail finance for used cars..
Scores are lower than ever and soon they will be hiding medical collections under 500 bucks to boost scores.
I just turned someone down with a 355 score. had 31 inquiries for auto loans in the past 3 days.
they had 4 repos in the last 5 years.
One recent change is that bad medical debt does not effect your score.
They also don’t like zero balances on credit cards.. They seem happiest if you carry about 30% of the limit month to month.
under 500 dollars. medical over 500 is still reported.
I don’t know. I go between 817 and 830 and have been like that for the past couple of years. (High 700s before that point)
No mortgage payment in the States (small one in Thailand, but that doesn’t count). I have about 50k in credit card limit but pay everything off every month (typically make payment within a week of making a charge). And I’m just living on a military retirement right now, can’t start collecting social security for a couple of years yet, so income is nothing to brag on.
I figure they’d hit my credit score a little when I retired because I have so much credit card limit available based on my income, but so far they haven’t.
At best you can find are vague suggestions (pay bills on time, lower credit utilization, lower debt to income ratio, increase net worth, etc.) with no real calculation on how much each of these impact the scores or if other factors are included in the real calculations.
For example, let's say you have an extra $100 per month in your budget and you want to use that to increase your credit score. Would it be better to invest it (which increases your net worth) or pay off a debt (which lowers your debt to income ratio)? If the interest on your debt is low (i.e. a refinanced mortgage) you increase your net worth more by investing that $100 vs paying more on the debt (averaging a return much higher from investing than the interest rate of the mortgage). That'll improve your credit score, but maybe not as much as lowering the debt would if the debt-to-income ratio has a higher weight in the credit score calculation.
And who knows what else is in the credit score calculation? With the way Dims run things I wouldn't be surprised if there are ESG type factors.
“Too lazy to do research?”
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It’s in “Chat”. No need for unsolicited snark. If you don’t want to chat about the presented subject feel free to move on. There’s already too much unkindness in the world.
How the hell do these people navigate through life?
I mean, it's not really hard - just pay your bills on time and live within your means.
Should be a no-brainer.
No they haven’t.
That is extremely recent and doesn’t impact all the high scores of the last two years for mortgages
forget to switch id’s, hum and gum?
“Too lazy to do research?”
I am regularly pissed tha my FICO score is much less than my Vantage 3.0 score.
Yes - they watered down the algorithm to boost credit scores about 3 years ago.
The credit industry is very difficult to understand.
I don’t have the highest number available, but I am in that group and close.
I own everything outright...house, lots of land, cars, etc. More cash than most and a sound investment program.
Yet I am considered a risk because I have rarely and infrequently borrowed money.
I am now retired, but when I was working I looked for buyers who had that financial history.
I think credit ratings are a rip off. Anyone in business that cannot make his own decisions as to who to sell to is not competent.
To anyone trying to borrow money, it is a big deal. But the answer to the question posed is not, in my opinion, a clue to the condition of the economy.
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