Conspiracy theorists unite!

I've spent a lot of thought on the subject of credit scores. Since I turned 18, I have had credit in some forms or others, and although I've made mistakes along the line, I have never, EVER, had a good FICO score. In fact, I've never been above 650, though I've flirted with it before on my transunion report.

Now, I've been wondering about this. I've asked myself "what am I doing wrong?". At this point, I've not made a late payment in over a year and a half. I've only got one 30 day late payment in the past 2 years. Ironically, it's because a magazine renewed on one of my credit cards that had a zero balance and I didn't bother opening the statement. I have a few late payments before that... but before the whole job loss thing when I made those late payments, I had never made a late payment for about 2-3 years and I was in the same boat I am now.

I realize the 'official reasons' for why I have a low score. Yeah, right now I have high utilization on my credit cards. I didn't a month ago though (I just moved, haven't paid them back to zero yet), and that only gave me about 30 points.

Yeah, I don't have a 'long history'. Only about 6 years now, I believe I read that the average length of history is 7 years or something?

I've always made sure my bills are paid. No one that I agreed to pay money to lost any of it - though when I lost my job a few years ago, they did get it late. Now I pay my bills on time and everything and I can't even get into some apartments without a ridiculous deposit. I make good money working as a software engineer but I can't even go buy a $20k car while people I know who make $30k a year go out and get financed for brand new $35k cars. I could get a 47% discount on my car insurance if I had a >800 FICO, but instead I get a 5% discount because my credit sucks.

Then it hit me. Both my wife and I have this problem. Both of us have parents who filed for bankruptcy and were otherwise rather irresponsible with their finances. Both of us have information that could be used to link us to them, and that's just the visible information. Previous addresses, in my case a joint account with my mother who cosigned on my first car, and one other link that I forgot while I was writing this.

So I'm left with this thought: Is it possible that the CRAs also take into account things like who you live with, or who you are related to?

Mind you - I could easily see the legit link between these things, since parents teach their kids how to handle money, or people who hang out often tend to assume the habits of those they hang out with.

Obviously I can't prove it, and I'm not even claiming it's true. It's just an interesting thought.

I really wish they would open the scoring process to scrutiny.

Discuss.

 

LOL, That line was going through my head the entire time I was writing the original post.

 

Re: Re: Re: Conspiracy theorists unite!

Perhaps soon I'll be in the same boat.

On another note, I just found this press release from Fair Isaac dated today: http://www.fairisaac.com/NR/exeres/A5C1215B-F04D-49C4-9E68-CC7A7006600E,frameless.htm

I wonder what these 'non traditional' sources of data are?

Unless they have a crystal ball, they have more sources and more information than they are disclosing. Period.

<insert tinfoil hat comment here>

 

Re: Re: Conspiracy theorists unite!

I suspect that the score is fairly accurate, though I'd say it's not fair in my case, but I bet the reason they refuse to make it public is because it would enrage people to find out that liking certain kinds of cars makes you a bigger credit risk, or having parents that suck at finances makes you a bigger credit risk, or whatever else.

They are walking a fine line between offering 'fair' results and the fact that life isn't fair.

 

Re: Re: Conspiracy theorists unite!

Pemco does, but they only operate in Washington State, I believe. You also need a clean driving record for >3 years.

God, I'd love to be in the >800 range right now - I pay like $1400/yr for my insurance (I used to pay $5k/yr for insurance because of some youthful indiscretions), but I'd be paying like 790/yr with that kind of discount. Mind you, for two people and two cars.

 

Re: Re: Re: Re: Conspiracy theorists unite!

While I sympathize with the creator of that site, I don't trust it very much, as he makes a lot of claims without backing them up, and I can find several logical fallacies without even trying hard.

I suppose it goes well in this thread though, since I did the same thing.

 

Re: Re: Re: Re: Re: Re: Conspiracy theorists unite!

Bolded. He implies that this is a factor. I have yet to see any evidence that this is involved at all - though admittedly I wouldn't be surprised at all.

Again, bolded. Yes, he's right that you cannot predict with 100% certainty what an individual will do, but based on the actions of people similiar to them, you can predict with a high probability their risk factor. This is what a credit score does. Is it fair? Perhaps not. But regardless, the basic idea is sound.

This entire section is baseless. Unless someone here knows Bill Gates' FICO scores, then you can't claim that he has a low score anyway. Furthermore, I highly doubt he has no debt - but I'd be willing to bet he isn't getting into debt on stupid things like a lot of folks do.

He claims they are aggressively collecting information about me from my internet usage. I'd love to see proof that Experian has access to comcast logs of internet usage - if they do, then I'll be screaming just as loud as he is, but till then I refuse to wear this tinfoil hat.

While I dislike the CRAs as much as the next guy, this really isn't true. They compile a score based on their risk assessment, and provide it to the company inquiring. The company has their cutoff point, and if it falls under that, then you don't get approved. Nothing is stopping you from asking them to reconsider, and nothing is stopping these companies from ignoring the score and simply looking at the credit report itself.

Although the credit companies make this possible, the companies that you do business with are just as responsible as the CRAs in this respect. If you don't like it, find a business that doesn't do that.


I could go on but I have other things to do.

I hope you realize that I really do sympathize with what he's saying, but when I look at it as objectively as I can, I really think he's kind of far out there.

 

Re: Re: Conspiracy theorists unite!

Well said. I agree wholeheartedly.

I actually gave that a try yesterday. I was able to get a bunch of addresses removed (There were like 15 on my credit file) but they refused to remove my parents address because Wells Fargo is reporting it on an old tradeline.

So, I've written a letter to Wells Fargo asking them to update their information and update to my credit report so I can get rid of that for protection against identity theft.

We'll see where that goes. That wells fargo account is both my oldest tradeline and also the one account that I cosigned on for my mother. So I don't want to get rid of it but I can't help but wonder if the fact that I cosigned for her makes my score lower.

I guess we'll see.