My favorite example of credit logic

[NoPresetSnarkLimit]

I know it's been discussed many times about how to optimize scores and I recognize this is Karma and therefore useless but I really just chuckle every time I look at this graphic representation of how scoring models consider carrying NO debt a bad thing.

 

"Dear consumer, please run up your credit cards and we'll give you a better grade"

Sincerely,

CK

 

 

As an aside: thanks to all that contribute to the Fico science threads, looking forward to seeing Fico 9 variances added to the mix.

[nht]

Credit scoring models exist solely for the credit issuers' benefit and address two key business objectives:

 

1. Maximize profit.

 

2. Minimize risk.

 

Anyone who is not "utilizing available credit" is doing nothing for one of those, to say nothing of being positively un-American.

 

As for Credit Karma (an obvious misspelling of the correct Kredit Karma)... the validity of their whole letter grade shtick falls somewhere between phrenology and palm reading.

[mendelssohn]

It's annoying how CK doesn't consider a small amount 1%. Fortunately FICO does.

 

If you're not interacting with debt, there's no way to rate you.

[JunkBuyersWorstNightmare]

Credit scoring models exist solely for the credit issuers' benefit and address two key business objectives:

 

1. Maximize profit.

 

2. Minimize risk.

 

Anyone who is not "utilizing available credit" is doing nothing for one of those, to say nothing of being positively un-American.

 

As for Credit Karma (an obvious misspelling of the correct Kredit Karma)... the validity of their whole letter grade shtick falls somewhere between phrenology and palm reading.

 

 

Best CK analogy I have ever heard.

[nht]

 

Credit scoring models exist solely for the credit issuers' benefit and address two key business objectives:

 

1. Maximize profit.

 

2. Minimize risk.

 

Anyone who is not "utilizing available credit" is doing nothing for one of those, to say nothing of being positively un-American.

 

As for Credit Karma (an obvious misspelling of the correct Kredit Karma)... the validity of their whole letter grade shtick falls somewhere between phrenology and palm reading.

 

 

Best CK analogy I have ever heard.

 

 

Oh no, now it's all downhill from here...

 

Thanks for the kind words, JBWN!

[NoPresetSnarkLimit]

 

 

Credit scoring models exist solely for the credit issuers' benefit and address two key business objectives:

 

1. Maximize profit.

 

2. Minimize risk.

 

Anyone who is not "utilizing available credit" is doing nothing for one of those, to say nothing of being positively un-American.

 

As for Credit Karma (an obvious misspelling of the correct Kredit Karma)... the validity of their whole letter grade shtick falls somewhere between phrenology and palm reading.

 

 

Best CK analogy I have ever heard.

Oh no, now it's all downhill from here...

 

Thanks for the kind words, JBWN!

Agree, except to extend the analogy to any scoring model, not just CK. Great post