Credit score isn’t done measure of how good you are with money. As soon as you understand it’s a measure of your profitability to lenders, its reason for existence and methods are obvious - it’s not “poorly implemented”, you just made a category error.
You are wrong in your assumptions. My wife and I both have 800+ credit scores at all 3 credit reporting agencies, we have a paid for home and no car loans, we pay off our credit cards every month, yet when we decided to buy a condo and sell our current house one of the negatives was that we haven’t had a mortgage or loan history. We don’t pay anyone interest and that is being held against us. The fact that the mortgage we’re trying to get will probably be paid off as soon as we sell our house is also a negative. If you’re not going to make them money they aren’t happy, and don’t get me started on the extra fees they try to slip in, I feel like I’m at the car dealership.
Well yes that makes sense based on the comment you’re responding to. They don’t have data on how well you pay a loan because you don’t have that in your history. That makes you more of a risk because they don’t have data to say you’re not a risk.
I disagree with this, because your score is more impacted over time by reliably paying your bills as agreed upon than by how much money you’re making for lenders. Someone who carries a balance month-to-month on a credit card (paying let’s say $75 interest) and someone who pays their balance in entirety each month (paying $0 interest) will both have the same positive impact to their credit score. This is a measure of reliability and not profitability.
There are other factors though, like the balance on the card when the bill is issued (higher than usual can knock your score a couple points), how old your accounts are (older is better), and how much credit you have available to you (more available credit is better, even if you never use it)
The biggest 1-day drop I ever had in my score was when I successfully challenged a derogatory mark from a debt collector regarding a card I’d paid off 14 years before they sent me to collections.
Apparently your credit score plummets when you prove you don’t actually owe a debt.
I’ve had something similar happen but it was because that debt was being sold to someone else. So I had 2 hits for the exact same debt and nothing to erase it. Then the next month both debts were gone and my score shot back up.
Credit score isn’t done measure of how good you are with money. As soon as you understand it’s a measure of your profitability to lenders, its reason for existence and methods are obvious - it’s not “poorly implemented”, you just made a category error.
It’s a measure of your risk to lenders, not profitability.
Risky to lend to = lower score. That’s it.
It’s weird how they calculate risk, but that’s all it is.
You are wrong in your assumptions. My wife and I both have 800+ credit scores at all 3 credit reporting agencies, we have a paid for home and no car loans, we pay off our credit cards every month, yet when we decided to buy a condo and sell our current house one of the negatives was that we haven’t had a mortgage or loan history. We don’t pay anyone interest and that is being held against us. The fact that the mortgage we’re trying to get will probably be paid off as soon as we sell our house is also a negative. If you’re not going to make them money they aren’t happy, and don’t get me started on the extra fees they try to slip in, I feel like I’m at the car dealership.
Well yes that makes sense based on the comment you’re responding to. They don’t have data on how well you pay a loan because you don’t have that in your history. That makes you more of a risk because they don’t have data to say you’re not a risk.
I disagree with this, because your score is more impacted over time by reliably paying your bills as agreed upon than by how much money you’re making for lenders. Someone who carries a balance month-to-month on a credit card (paying let’s say $75 interest) and someone who pays their balance in entirety each month (paying $0 interest) will both have the same positive impact to their credit score. This is a measure of reliability and not profitability.
There are other factors though, like the balance on the card when the bill is issued (higher than usual can knock your score a couple points), how old your accounts are (older is better), and how much credit you have available to you (more available credit is better, even if you never use it)
The biggest 1-day drop I ever had in my score was when I successfully challenged a derogatory mark from a debt collector regarding a card I’d paid off 14 years before they sent me to collections.
Apparently your credit score plummets when you prove you don’t actually owe a debt.
I’ve had something similar happen but it was because that debt was being sold to someone else. So I had 2 hits for the exact same debt and nothing to erase it. Then the next month both debts were gone and my score shot back up.