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CRAs are a total joke ... they are designed to keep people in debt. My quick story:

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So I bit the bullet and paid everything off … credit cards, auto loans. Zero’d everything out. My scores DROPPED … lol. I get that the algorithm likes to see some debt but this is ridiculous. Proof positive that this entire system is designed to keep people back. I’d rather be debt free; F the CRAs.

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This is why the $2 trick exists. I have never felt the need to I just pay off my debt monthly and don’t care what reports. I am safely in the 800s.

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I'd bet the majority of folks with 800+ FICOs don't have any carried CC debt. They pif and use CCs for rewards and convenience. With the exception of zero reported balances across the board, more "debt" in the form of carried balances correlates with higher risk. Not using credit at all correlates with a slight risk increase compared to recent use and payment.

 

Of course having baddies pretty much obliterates FICO scores. Banks make money by lending as much as possible to people that will likely pay it back. It's not personal, it's statistics.

Edited by cashnocredit

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As long as you are paying your bills on time (i.e. 35% of FICOs algorithm) and consistently (which accounts for 15% of FICO) you are fine. People seem to think the 'risk' of not using credit means you have to use it every month, when every 3 to 6 months of credit card use is usually more than sufficient, Big Ticket Items, Dining Out, Travel and Gas are good categories to use for credit without going into debt, provided you budgeted for the purchases, therein lies the problem for most.

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So I bit the bullet and paid everything off … credit cards, auto loans. Zero’d everything out. My scores DROPPED … lol. I get that the algorithm likes to see some debt but this is ridiculous. Proof positive that this entire system is designed to keep people back. I’d rather be debt free; F the CRAs.

 

 

Not showing credit usage and not carrying debt aren't the same thing.

 

There is no incentive to "hold people back." Having more creditworthy consumers in the overall pool spells more opportunity for companies who extend credit to make money. You have it backwards.

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CRAs are a total joke

Zero’d everything out. My scores DROPPED

The CRA's and FICO are entirely different entities. Don't conflate them.

 

I get that the algorithm likes to see some debt but this is ridiculous.

Also don't conflate debt with a reported balance. You can certainly build and maintain credit with revolvers without incurring debt. You want one revolver to report a balance to show usage which you can easily do while paying every statement balance in full.

 

You do lose the benefit from having an active installment when you pay off your last active installment but it's certainly possible to have good credit and scores without an active installment.

 

Proof positive that this entire system is designed to keep people back.

No, you just need a better understanding of how it works. Your scores and limits indicate to me that you have stuff on your reports holding you back

Edited by takeshi

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So I bit the bullet and paid everything off … credit cards, auto loans. Zero’d everything out. My scores DROPPED … lol. I get that the algorithm likes to see some debt but this is ridiculous. Proof positive that this entire system is designed to keep people back. I’d rather be debt free; F the CRAs

Dave? Is that you?

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Zero’d everything out. My scores DROPPED . Proof positive that this entire system is designed to keep people back.

 

You don't understand how the system works yet, (a little more reading could help you). :wave:

 

FICO Scores are "Risk Models" that lenders purchase to gauge the risk of loss they will assume for any new credit issued to a customer.

 

You can have a "PREMIUM" FICO Score in the 1% risk category of over 800 without paying even one penny of interest to ANY lender.

 

Learn and play the game/system right and you'll be in the desirable position of a customer that lenders chase after, (because they know they need you far more than you need them). :rofl:

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OP - why are you using the Vantage 3.0 score (not a FICO score) which is what Chase Journey provides? You don't need any "debt" to achieve and maintain a very high FICO score. To me, debt is defined as not paying in full before the due date, thus carrying a balance. I've never carried a balance in my life and my FICO 08s are in the 844-850 range; for some reason always 850 for the FICO 09. The largest FICO drop I ever had was back in the days when I played the game of letting 1 card report some amount on the statement date (I can't be bothered with that anymore). One month I accidentally paid off all cards before the statement was issued. My FICO score dropped--IIRC--over 30 points.

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So I bit the bullet and paid everything off … credit cards, auto loans. Zero’d everything out. My scores DROPPED … lol. I get that the algorithm likes to see some debt but this is ridiculous. Proof positive that this entire system is designed to keep people back. I’d rather be debt free; F the CRAs.

 

The only thing it is 'proof positive' of is that you do not understand how 'the entire system' functions.

 

CRA's do nothing score-related. Lenders use the information and place it into a scoring model, generally one of the MANY that exist from Fair Isaac but occasionally using their own algorithms.

 

Responsible use of credit, as others have already noted, is NOT automatically an equivalency to carrying debt. Certainly things like a vehicle note or a mortgage are going to be longer term debt vehicles which, for some people, will disappear after a few years. Others carry auto loans into perpetuity because they make the poor choice to remain underwater because they insist on a new vehicle every few years. Credit bureaus have nothing to do with this nor does Fair Isaac.

 

Do not blame 'the system' because you do not understand the game.

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Credit Reporting Agencies designed to keep people in debt? No! Credit card companies? That Id buy. The more you pay interest, the more they profit.

Edited by Derek1

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This is why the $2 trick exists. I have never felt the need to I just pay off my debt monthly and dont care what reports. I am safely in the 800s.

What is $2 rule

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So I bit the bullet and paid everything off … credit cards, auto loans. Zero’d everything out. My scores DROPPED … lol. I get that the algorithm likes to see some debt but this is ridiculous. Proof positive that this entire system is designed to keep people back. I’d rather be debt free; F the CRAs.

 

 

I agree. The system is an absolute joke.

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So I bit the bullet and paid everything off … credit cards, auto loans. Zero’d everything out. My scores DROPPED … lol. I get that the algorithm likes to see some debt but this is ridiculous. Proof positive that this entire system is designed to keep people back. I’d rather be debt free; F the CRAs.

 

 

I agree. The system is an absolute joke.

 

So how would you change it? Outlaw CRAs? Expand the data they collect to include income and savings? How would you change credit scoring and who would be responsible for it? What would be the ideal approach for banks to use to lend (or not lend) money to people?

Edited by cashnocredit

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So I bit the bullet and paid everything off … credit cards, auto loans. Zero’d everything out. My scores DROPPED … lol. I get that the algorithm likes to see some debt but this is ridiculous. Proof positive that this entire system is designed to keep people back. I’d rather be debt free; F the CRAs.

 

 

I agree. The system is an absolute joke.

 

So how would you change it? Outlaw CRAs? Expand the data they collect to include income and savings? How would you change credit scoring and who would be responsible for it? What would be the ideal approach for banks to use to lend (or not lend) money to people?

 

 

Not directed toward me, but that would be a start. More advantages toward having the money in the first place as opposed to how well you spend it.

Edited by Derek1

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Confusing two things

 

FICO is your willingness to pay

Income/DTI is your ability to pay

 

You can have the money and still not pay.

 

Both are considered in lending but I do not believe just because you have lower income you should have a lower score, it’s just what you do with the money.

 

On the other hand There are plenty of people out there with high incomes and low scores as well as they don’t handle the income well. I think the two should remain separate. But would love to hear others opinions.

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Confusing two things

 

FICO is your willingness to pay

Income/DTI is your ability to pay

 

You can have the money and still not pay.

 

Both are considered in lending but I do not believe just because you have lower income you should have a lower score, it’s just what you do with the money.

 

On the other hand There are plenty of people out there with high incomes and low scores as well as they don’t handle the income well. I think the two should remain separate. But would love to hear others opinions.

 

This^^^

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I think a lot of things that I don't understand are stupid. Sports fans come to mind.

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