Credit Scores: FICO Formulas Are Being Changed By Lenders

usatoday.com:

Long after the economy recovers, millions of Americans will be left with a grim legacy of the recession: damaged credit scores, the three-digit ratings that help determine consumers' ability to get loans and other types of credit.

Even though some consumers have seen their credit scores improve as they trim their debt, others have seen their scores drop significantly because of late payments on bills, foreclosures and rising credit card debt.

Read the whole story: usatoday.com

Comments

[demimckingwoodtx]

Just another blow to the consumer.

[NoMoreBailOut]

The fed is playing in re inflating the housing & finance bubble while the public willingly lets it happen (not that we could stop if if we wanted to). We're all too busy getting rich with stocks while the Wall Street crooks resume their treachery knowing they will get bailed out yet again.

good articles 4 slow news day; http://www.iamned.com

The lack of any finance or heath care reform is appalling

[OhReallySheSaid]

If Bank of America borrows 44 billion from us and is clearly going over their credit limit, what kind of daily overlimit fees are we taxpayers receiving in return? What exactly is their Fica score?

[OhReallySheSaid]

The biggest lie perpetrated yet on us is that banks have no say on our scores. Rubbish.

Any scoring system that punishes you for looking at your score more than three times a year is a score that is phony and disingenuous. Imagine your bank telling you they want you to save more but they're going to give you less interest everytime you look at your savings account balance. That's the nonsensical and blatantly mean rules of credit scores. So what if I look at my score three times a day? It's none of their business and for Congress and Obama to permit this to continue shows they are drunk with banker's money and they really don't care about us or the middle class.

The greed, the selfishness, and the just plain nastiestness these bankers have treated us is coming home to roost. Harvard MBAs and their rosy projections in 2007 of an endless growing economy show their analysis is nothing more than a collective hunch derived from emotion. The credit card business is the fastest way for banks to make money, and believe me, they need us more than we them. It's time for us to start acting that way. Just ask that YouTube BofA lady customer who refused to pay her balances until they lowered her interest (which they did).

[NYCMami]

The fact that if you don't own a credit card lowers your credit score should tell you plenty.

[EminemsRevenge]

Glenn Beck and the teabaggers should be out rioting to get the Post Office into banking:

http://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=200908061540dowjonesdjonline000843

Guess they gotta wait until their FICO scores are borderline 600 to realise that they're getting EFFED to the max?

[politicsofeight]

Moore, Tallibi, and Krugman are right. We need more people like them in high office

If no justice is served the American People are going to get more restless, and the next time something happens.....there could be real UNREST! WE have to hold people accountable for their actions.

hat tip to: http://www.iamned.com

Ignorance = Negligence....... They knew what was going on the whole time, all the while padding their pockets. The U.S. crony-Capitalist justice system is a f**king joke. There must be some way we can outsource for justice against these criminals.

talibi is right

[bobwalters]

Thieves and brigands all. "Fair Isaac" is, and always has been a scam (and not "fair" at all) quite similar to the scams of derivatives/credit default swaps, etc.; no reason to believe any "new" type of credit score will be any different. Most of the entire "credit economy" is a farce, played upon the unsuspecting, for the vast profits to the few. The biggest sub-prime loans in existence (though provided at superlow interest rates) made in the entire economy have gone to the absolute least credit-worthy borrowers: the super-zombie banks, so-called "investment" banks (as in, Government Sachs) hedge funds and other Wall Street scam operations. What might the FICO scores of CitiCorp, Merrill Lynch, JP Morgan Chase, Capitol One, Bank of America, Goldman Sucks, Bear Stearns, et al, be these days?

[divatalk]

Credit is not just about credit cards, auto, or mortgage loans. It's about whether you qualify for low insurance rates, if you can get a cell phone, a regular phone, even if you get electricity.

My son was turned down for a great position because he had dings on his credit. Guess what, he had
dings on his credit because he lost his job and was now looking to get another one.

It's a vicious circle. We just have to stay on top of the information

[Hailmaryyy]

Without the consumer this economy is going down. The federal government has created Zombie banks and consumers and small businesses are bearing the brunt.

http://www.escapethenewgreatdepression.com

[Icantbelieveher]

I won't use my credit cards any more -- I still have somewhat decent credit, but I have had three cards decrease my limits and one card close my account because I never used it. We're paying them off and I won't be giving one more red cent to the banks again. I write checks, so that VISA and MC don't get the fee from the merchant each time I use my debit card either.

We switched to a credit union and will no longer do business with any big banks -- other than our mortgage, because we had our mortgage sold to a big bank, which we had no choice in the sale! We pay our mortgage every month on time, and we will no longer be buying a thing on credit.

When this crisis is all over, these companies will be begging people to take out their credit cards -- and they will have a hard time getting people to forget what the big banks did to the little people!

[baxterblack]

But on a positive note, Goldman just announced even more recording-setting bonuses. Whew, I feel better. Go USA!

[enterhere]

When my son went off to college he applied for and received a credit card on move in day. He entered on the application that he didn't have a job nor any income. They still approved him. Of course, being eighteen, he maxed it out almost immediately. Every month late fees, over credit limit fees and an astronomical interest rate (that the bank kept raising) brought what was a $300 debt up to almost $1250. The bank started calling me to pay if off. I didn't sign anything but yet they wanted to saddle me with the debt. After telling their representative that I was not going to pay. He told me I should do the right thing and pay. He also told me that morally I should pay it off because I was his father and this is what the bank assumes happens in these cases. I told him that morally they should not have given a card to a kid with no money and no job. What I found hilarious about the whole episode was that a bank was preaching to me about moral responsibility and doing the right thing.

[propitiousmoment]

I have a theory about credit cards and interest rates. Somebody please tell me if I am missing something here, it all depends on the phenomenon called "fractional reserve." When a bank loans you money, say to buy a house, they are only required to have 30% of the loan amount actually in cash reserves in their bank. When they write the check to the seller, the Fed credits their account (the bank's) with the other 70% - in effect printing money, since that money now goes into circulation via the seller's use of it. Is it the same with credit cards? Because if so, I can see why the CC companies hate people who pay off their balance every month - when they advance you money on your card, they are counting on not only that credit from the Fed, but also a steady stream of future income from your interest payments. Basically, that money (neither principal nor interest) never EXISTS until you, the working person, labor for the next 30 years of your life to create it. It's a fiction that we the working stiffs are conveniently not informed is a fiction. Our whole financial system is built on air, and I would LOVE to see the whole country just quit paying on their credit cards, and cap their mortgage payments at 30% of principal. Let the whole system fail, and start over fresh with something that works for everyone including the ordinary people upon whose backs it

[Haditup2here]

Bingo !! However, it is more to it than that:

http://www.silverbearcafe.com/private/moneyasdebt.html

[ibsteve2u]

Does a good credit rating mean anything anymore? The point used to be to build your credit so that a bank would entrust you with a 30-year mortgage.

But with free trade, offshoring, outsourcing, and so on, is it rational to assume that your career will NOT see a period where you will be unable to afford your mortgage payments anymore?