FICO this!
Most of those close to me get the best of my rants. In the past I have ranted about the evil of banks and the credit system. While I understand the justifications for some of the factors they use in determining credit risk; some of them also confuse the hell out of me. In a search for some way of knowing how lenders look at me and say, “Oh God no, we won’t borrow you money,” I found FICO. If you don’t know what a FICO score is, I suggest going here. There are a few online self-marking fico score calculators as well.
Anyways, on June 3rd, 2004 I got my first FICO score from equifax.ca. Cost $20 CND and is fairly comprehensive of all your current and past credit information. I scored 635, making me a somewhat risky person so lend money to. December 15th, 2004, I score 642. I determined that it takes a long bloody time to increase your FICO score even when you behave according do their rules. Today, December 1st, 2005, scored 687. A definite improvement from a year ago.
My newest score is nearly good. What I don’t understand is why my score isn’t in the preferred range of >720. The only marked bad spots in my credit history is missing a payment on my visa and mastercard a few years ago. I had just moved and they must of slipped through the mail forwarding or something. Typically I get a bill and I pay it as soon as I can (my goal is within two weeks of receiving it, which is nearly always before the due date). Anyways, can’t get those striped from the record, already tried last year.
Perhaps it’s the number of loans I get then pay off. I suppose their calculation only scores how often you take out loans; not, how quickly you pay them off. So I can see that hurting me, which is unfortunate. You would think paying them off quickly would be “positive” for your score… Of course lenders want you to stick to the term of the loan so they can make the most money, so the FICO score starts to be a bit biased to those who just pay loans forever without attempting to pay them off faster. I also have 3 credit cards and one line of credit. While I thought perhaps I had too many of those “dirty” loans… it turns out I’m below average compared to other Canadians (according to equifax). So again, I would appear to me that I’m being given a lower score cuz I don’t hold a lot of useless cards for credit. Fact of the matter is, I’m trying to get rid of all but one of them. If I manage that by next year I’ll probably have a worse FICO score!
To me, FICO is a measure best suited for lenders to use, cuz it tells them who they can gouge the most for their efforts. It’s all about making money to them, not enabling the customer as much as possible. For me, I judge me credit as how fast I can pay it off. Sooner is better, and thus a higher score. Oh well, until next year.
