Americans clueless on credit scores

Let's get real people. Americans are clueless about most things. Our greatest problem is that we are a severely unenlightened people, but we refuse to believe it because we are Americans. We honestly believe we are the greatest country in the world and no one comes near. What we fail to realize is that we are living on what America once was instead of what it is today. America is on a slippery slope of disaster, and it is all because the people are arrogant, undereducated, self centered fools. When a people think they are great, they have no need to flourish.

I don't know about credit scores, but it is pretty obvious this country is woefully lacking in finance education.  People don't understand debt, credit, taxes, fees, compound interest, interest rates, 401k's, Roth's, stocks, bonds, commodity markets, stock markets, the dollar and on and on.  I propose a mandatory class on personal finance in order to obtain a high school diploma.  It's not always an issue of stupidity.  Some people have just never been taught.

you don't have to have a bunch of debt to float a credit score. it seems to me a lot of folks that get into trouble financially spend beyond their means. i remember growing up poor and living within our means. we cooked our meals at home, didn't care what the Jones had, because we we not going into debt to have those things. we lived just fine and did not feel like we were doing without. gee there is a concept. be debt free and loose the stress.

I have a real problem with Credit Histories and credit scores, These are private companies that are accessing my private information, They take the information and compile it and make profits off of it, Not only do they have access to my information but when they make a mistake or if someone else  fraudulently uses any of my personal identifiers the credit company uses that against me and does not even do any research to find out if the information is correct or accurate.

 

 

"When we totaled up the scores Americans only scored a 60, which if you're in school is a low passing grade," said Stephen Brobeck, executive director of the Washington-based CFA, a nonprofit that advocates for consumers. "

 

School must have really changed in the last 40 years because when I went to school 70 or above was a passing grade and 69 and below was a failing grade.

The whole thing is a huge scam that the Department of Justice ought to expose and irradiate. Oh wait, they never prosecute anybody. They let all of Wall St. get away scott free.

The three main credit companies will never tell you exactly how they compute these scores. Or why the simple act of closing an unwanted credit card LOWERS your score? Why do we let prospective employers view score we don't get to see? Why is it next to impossible for an individual to dispute anything about these scores or have them corrected, but any company from anywhere can look at the scores and negatively impact them? Why are companies allowed to advertise on TV that they can send us our scores for free when the scores that they send are all fake?

These companies have WAY TOO MUCH control over our lives with far too little accountability.
This ought to be the next battleground for complete reform.

A perfect credit rating is the glaring light of one facet of contemporary American capitalist reality that seems to blind the intellectual beejeezers out of most "common folk"!  Could it be that the banking and credit systems that also govern this country are allowed their stranglehold on American pocketbooks by state and federal legislatures and that the terms and conditions set up by these financial entities is convoluted deliberately and with one strident purpose mainly to collect as much moolah as possible?  Americans have the choice and potential of not "playing the game", and of living within their means, and as far as corrupt and greedy politicians and corporations are concerned, the day of reckoning will arrive:  Democracy also must be rid of its excesses if it is to survive. 

First of all, we are all caught up in a system that was developed by a couple of smart guys. I call them smart because they are millionaires many times over. They have quite a good gig going. Now, I would like to believe that if the idea of a credit scoring system was presented to congress today, (knowing a bit of what we know now), we would make sure that the system didn't merely target impoverished areas and discriminate against various ethnicities. We would hopefully force the idea/system to be more transparent. If you have a combination of 10 credit cards and personal loans (FICO calls this a good mix) and you looked at your history of the past 24 months, you would have 240 data points. That is, 10x24=240. Lets say your running score was about 720. This is a pretty healthy score. Now, lets also say that you were never late in the past 24 months. That is, you have 240 good data points in the past 24 months. If you are late on just one single payment this month, your score will drop approximately 75 points. The idea is not that you had an honest mistake, but the theory is that you may be getting in over your head. For that claim/thought process, you just took a 10% hit. However, 1 negative data point in the past 24 months (or 240 data points) represents a late payment history of .4%. My opinion is, that the score should be dropped a similar amount. That would equate to about a 3 point hit. Your new score would be 717. The trouble is, the devil is in the detail. It all comes down to the formula. The government conducts an investigation of the credit scoring system about every 3 years. The most recent report is about 300 pages. The one thing they do not get into is the methodology of the mathematical models. Painful topic. I have spent a great deal of time on this research. Have some fun,...go on the FICO websited. Look at the history of FICO. All of their history is "for profit" related. This is NOT an unbiased system.

There is nothing wrong with having credit cards and working to build good credit.  The key is to be disciplined in their use and payment.  I charge just about everything I purchase (including gas and groceries) and I pay the bill each month.  By doing this I earn miles and get two air fares to Florida paid for about once a year.  I am unaware of any such benefit by using cash.

This article has a mistake, Age is used in calculating your credit rating, you loose points for being younger or older.  Youth loose points for lack of experience, seniors loose points for potential death. 

 

Your credit company will not show you that they use this, however in working in a credit union I have seen the paperwork that substantiates this.