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We take a look at what we know about the FICO 10 algorithm, a new credit score model that will come out this summer.
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34 comments
You started by saying that our scores could either go up or down by as much as 20%. You gave us how they could decrease but didn't say how the new scoring could increase them.
So all personal loans will be a negative? Not whether the account is payed on time and in good standing. Personal loan always equals negative? That seems counterintuitive?
FICO does a poor job of determining credit worthiness. They look at credit card balances when the card closes instead of how much is being paid off each month. If someone charges 1k on their card, pays it off and then charges 2k and will pay it off. They are treated the same as someone who charges 1k, only has enough to make the minimum payment and charges another 1k. The first person is a much better credit risk than the second.
I had this issue with Chase several years ago when I asked for a credit limit increase and got declined. I called them up and asked why. I was told that my balances were too high. I explained that is why I was asking for a credit limit increase. I was charging 15-20k per month and paying it off. When they looked and saw how much I was sending them every month, they doubled my credit limit. Only when they ignored FICO and looked at history with them was I given the limit that I deserved.
So will credit builder loans be affected since its an installment loan?
The more independent you are the worst you credit score will be. As soon as I paid off my car loan, credit card, and student loan my credit score, drop by 30 points but I have way more money on my account. Don’t trust banks they are not there to help you, pay all of you debt and move to pay everything with cash. Cut the credit card or don’t use it and see your credit score plummet but you account grow. You only need good credit score to get a mortgage once you get it drop the system it’s doesn’t benefit you then pay off your house. You will never need the bank after that.
Can you make a video on the cheapoair visa signature credit card?
so should we pay off a personal loan off before June? is Self Lender no longer a viable option for building credit anymore?
They probably believe the scores are inflated because tax liens and judgements are no longer being reported on credit reports.
I just want to say that a credit score is nothing to be proud about.. The Banks have done an excellent job in convincing people that high FICO score is to be admired.. Its like saying "I love being a slave to debt".. In truth you really dont need to borrow money if you know how to save and spend wisely.. I know that life happens but you need to save more than you spend in case life happens..
It doesn’t get any simpler than this. Great job sir 👍🏽
Hey, I've noticed that you mentioned in you videos that you moved to the USA from the UK, I'm from the UK and am interested in moving to the USA in the future so if you could go over the process it would be really helpful!
So basically no matter what you do they will tank your score.
Nice vid!
2019 Ultra Fico
2020 Fico 10
What's new
Ben, I recently read someone’s letter from Amex after a credit card application and they checked both the Experian and LexisNexis credit reports. Do you know much about LexisNexis? Can you do a video on it? With what I’ve been able to read so far, it sounds like they know a lot more about us than Equifax, Transunion, and Experian!
Thanks
So I spend $1,000 in JANUARY and it increases to $12,000 in DECEMBER so I am PUNISHED even though paid in full by the due date as has happened for decades???
My score just dropped 50 points wtf???
Seen😎
does this pertain to canada as well?
What about 0% utilization? 😁
So basically nothing will be to the advantage of t he consumer. This will only help the banks etc have the ability to charge more on interest. SMH
My credit utilization is currently at 64% but trending downward from 71%. I have absolutely no issues otherwise…never late nor any derogatory marks. My FICO just went up from 715 to 730. I plan to lower utilization to 50% by end of Oct Hopefully I can get a credit line increase to further lower my utilization. My goal is to lower it to 30% by end of Jan 2021.
FICO scores was meant to create greed for the lenders..
Did you know 40 years ago a fico score was non existent
That's why FICO created Greed for you
I'm glad I have a zero because I do not know FICO
A fico score created greed.
Question what about a personal line of credit. Do they look at that as a personal loan?
Keep at 2% for a 850
Where can I go to try to get credit established since I have been a victim of identity theft and it is so bad that I can't even get a secured credit card. Also, how can I go about getting in touch with you Shifu?
It is fico 9 now.
We should do away with credit scores for good the car dealerships are Asking for the congress to do something about it due to their car sales are going down by that the credit score system is not working right so here congress is going to
Do away with it thanks God finally the evil credit company & banks have to Adapt if they want to exist 🙏 we the American people will win @ the end meanwhile use cash to buy things forget them lenders we the people need not to enrich them by borrowing money from banks and lenders be vigilant people don't let them play you we can do this
Banks are going to make so much more money on interest rates with this model. Not to help people be responsible. Not to slow average personal debt. Make more on higher rates across the board. Full stop.