Why should we pay for the FICO score?

[FrustratedUser]

This is stupid.
The FICO score is very important to everyone (I think). Why the hell should I have to pay to know my score? I didn't choose the system. Someone invented it and suckered all of us in. Great money maker I'm sure.

:|

 

[isasir]

Well it's supposed to be free for everyone soon enough.

 

[StageLeft]

It's something THEY invented to decide if THEY want to lend you THEIR money. Why SHOULDN'T you pay for it?

Well it's supposed to be free for everyone soon enough.

No; your credit report is/will be free, not the score.

 

[FrustratedUser]

Originally posted by: isasir
Well it's supposed to be free for everyone soon enough.

I really hope so. Paying $30 to $40 to get to know what others think of my finances is frikken stupid.
It's just like car mechanics, we all need them and can usually not choose not to.

 

[isasir]

Originally posted by: Skoorb
It's something THEY invented to decide if THEY want to lend you THEIR money. Why SHOULDN'T you pay for it?

Well it's supposed to be free for everyone soon enough.

No; your credit report is/will be free, not the score.

Ah. Whoops.

 

[Queasy]

Originally posted by: FrustratedUser
This is stupid.
The FICO score is very important to everyone (I think). Why the hell should I have to pay to know my score? I didn't choose the system. Someone invented it and suckered all of us in. Great money maker I'm sure.

:|

Because they are providing a service??

You get your credit report for free already. That should be enough to tell you where your credit issues lie.

 

[FrustratedUser]

Originally posted by: Skoorb
It's something THEY invented to decide if THEY want to lend you THEIR money. Why SHOULDN'T you pay for it?

Well it's supposed to be free for everyone soon enough.

No; your credit report is/will be free, not the score.

A quick look at your credit history should be enough, just like in many other countries.

 

[Drakkon]

Originally posted by: Queasy

Originally posted by: FrustratedUser
This is stupid.
The FICO score is very important to everyone (I think). Why the hell should I have to pay to know my score? I didn't choose the system. Someone invented it and suckered all of us in. Great money maker I'm sure.

:|

Because they are providing a service??

You get your credit report for free already. That should be enough to tell you where your credit issues lie.

true but for most thing credit issues dont matter and credit scores do. Your credit issues can look fine but your credit score can be crap because of age/past/inquiries/etc.
I agree it should be a free service just like the credit reports, It seems kinda sketchy that a company base whether or not they want to do business with you based on a score you can't see freely.

 

[FrustratedUser]

Originally posted by: Queasy

Originally posted by: FrustratedUser
This is stupid.
The FICO score is very important to everyone (I think). Why the hell should I have to pay to know my score? I didn't choose the system. Someone invented it and suckered all of us in. Great money maker I'm sure.

:|

Because they are providing a service??

You get your credit report for free already. That should be enough to tell you where your credit issues lie.

Sure, the service is telling you the result of something they imposed on all of us.

 

[RossMAN]

I pay for a MyFico.com 3-in-1 credit report with credit score at least once a year.

Of course few people are aware that they have coupon codes

 

[Queasy]

Originally posted by: FrustratedUser

Originally posted by: Skoorb
It's something THEY invented to decide if THEY want to lend you THEIR money. Why SHOULDN'T you pay for it?

Well it's supposed to be free for everyone soon enough.

No; your credit report is/will be free, not the score.

A quick look at your credit history should be enough, just like in many other countries.

The score is a function of your credit history. The reason they go with a score is to help automate the lending process and to take out the 'human element' that can lead to bad loans, etc. Matrices that deal with a combination of your score and elements on your credit history determine whether you get a loan and how much of a loan you are eligible for.

 

[nakedfrog]

Originally posted by: FrustratedUser
This is stupid.
The FICO score is very important to everyone (I think). Why the hell should I have to pay to know my score? I didn't choose the system. Someone invented it and suckered all of us in. Great money maker I'm sure.

:|

I'm a customer. It's my policy to bitch!

I agree, though. I think it sucks. Luckily when I was going through my mortgage paperwork, they gave me a copy of my credit report that had all three scores on it.

 

[FoBoT]

when did everyone start thinking everything was free? was it the late 90's when "Free" internet was invented?
or is it a generational thing? why do the youngsters think things should be free? the company the does all the work for credit history/reporting has to PAY their employees MONEY to work, if they don't charge for the service, how would the company stay in business?

 

[new2AMD]

credit reports dont help in figuring FICO scores. I have a myfico account. I disputed some things and had them removed. My total debt went down, my number accounts went down, my credit history got older, and number of negatives went down and yet my score dropped. I have no idea why and am not too happy about it.

 

[Queasy]

Originally posted by: FoBoT
when did everyone start thinking everything was free? was it the late 90's when "Free" internet was invented?
or is it a generational thing? why do the youngsters think things should be free? the company the does all the work for credit history/reporting has to PAY their employees MONEY to work, if they don't charge for the service, how would the company stay in business?

I wonder the same thing. Equifax, Transunion, and Experian have huge databases of credit information that costs money to be updated and maintained constantly. Yet, people think that all that information should be given away free.

 

[FrustratedUser]

Originally posted by: Queasy

Originally posted by: FrustratedUser

Originally posted by: Skoorb
It's something THEY invented to decide if THEY want to lend you THEIR money. Why SHOULDN'T you pay for it?

Well it's supposed to be free for everyone soon enough.

No; your credit report is/will be free, not the score.

A quick look at your credit history should be enough, just like in many other countries.

The score is a function of your credit history. The reason they go with a score is to help automate the lending process and to take out the 'human element' that can lead to bad loans, etc. Matrices that deal with a combination of your score and elements on your credit history determine whether you get a loan and how much of a loan you are eligible for.

I know how it works but I still think the system is retarded.

Example 1:
I work and make $60k/year. No loans and I can put plenty in savings. I go to the bank and ask for a car loan.
If you have no credit history they will basically tell you to fvck off even if you easily could pay that loan. You are now experiencing "Catch 22".

Example 2:
I work and male $60k/year. I got 3 credit cards with a total limit of $15k. Everything is charged to these cards and it adds up to around $2k/month. There is also a balance of ~$2k carried over every month.
I walk over to the bank and ask for a car loan. They cheer and welcome me as a king. I get a $20k loan (almost) no questions asked. Now, what tells them (based on the score) I won't go out and max out all my cards, making it impossible for me to pay this loan?
NOTHING!!

I think the system is backwards. It should be based on the ratio of how much money you currently make to how much outstanding credit you have. Not based on how much credit you already have.

 

[nakedfrog]

Originally posted by: FoBoT
when did everyone start thinking everything was free? was it the late 90's when "Free" internet was invented?
or is it a generational thing? why do the youngsters think things should be free? the company the does all the work for credit history/reporting has to PAY their employees MONEY to work, if they don't charge for the service, how would the company stay in business?

I have to pay a $15 credit report fee as part of my house buying process. I've never worked in a car dealership, but I'll bet they don't get to pull all those credit reports for free. They're already making money, they're already setting up these FICO scores, based on OUR personal credit histories and they are used to determine interest rates and car insurance rates--it's OUR personal information and we should be able to see it for free.

 

[FrustratedUser]

Originally posted by: nakedfrog

Originally posted by: FoBoT
when did everyone start thinking everything was free? was it the late 90's when "Free" internet was invented?
or is it a generational thing? why do the youngsters think things should be free? the company the does all the work for credit history/reporting has to PAY their employees MONEY to work, if they don't charge for the service, how would the company stay in business?

I have to pay a $15 credit report fee as part of my house buying process. I've never worked in a car dealership, but I'll bet they don't get to pull all those credit reports for free. They're already making money, they're already setting up these FICO scores, based on OUR personal credit histories and they are used to determine interest rates and car insurance rates--it's OUR personal information and we should be able to see it for free.

My point exactly.

 

[Queasy]

Originally posted by: FrustratedUser
I know how it works but I still think the system is retarded.

Example 1:
I work and make $60k/year. No loans and I can put plenty in savings. I go to the bank and ask for a car loan.
If you have no credit history they will basically tell you to fvck off even if you easily could pay that loan. You are now experiencing "Catch 22".

Example 2:
I work and male $60k/year. I got 3 credit cards with a total limit of $15k. Everything is charged to these cards and it adds up to around $2k/month. There is also a balance of ~$2k carried over every month.
I walk over to the bank and ask for a car loan. They cheer and welcome me as a king. I get a $20k loan (almost) no questions asked. Now, what tells them (based on the score) I won't go out and max out all my cards, making it impossible for me to pay this loan?
NOTHING!!

I think the system is backwards. It should be based on the ratio of how much money you currently make to how much outstanding credit you have. Not based on how much credit you already have.

I didn't say it was perfect. Part of the reason example 2 gets a loan over example 1 is because example 2 has shown that they can handle their credit by making payments on time every month. Example 1 has no credit history and thus is riskier in the bank's eyes because they have not shown that they can handle credit. If example 2 goes out and maxes its credit cards or misses a payment or two, you can bet that its credit score will drop like a rock.

 

[VirtualLarry]

Originally posted by: Drakkon
true but for most thing credit issues dont matter and credit scores do. Your credit issues can look fine but your credit score can be crap because of age/past/inquiries/etc.
I agree it should be a free service just like the credit reports, It seems kinda sketchy that a company base whether or not they want to do business with you based on a score you can't see freely.

At what point, does the line get crossed, from being just a privately-issued/scored "rating", shared among businesses for a fee, to being actually legally discriminatory?

Hypothetical example - what if your race actually did secretly figure into the scoring system? But the only way to prove that, would be to take a statistical sampling of the entire scored population, and look for the bias and correlation?

 

[Queasy]

Originally posted by: nakedfrog

Originally posted by: FoBoT
when did everyone start thinking everything was free? was it the late 90's when "Free" internet was invented?
or is it a generational thing? why do the youngsters think things should be free? the company the does all the work for credit history/reporting has to PAY their employees MONEY to work, if they don't charge for the service, how would the company stay in business?

I have to pay a $15 credit report fee as part of my house buying process. I've never worked in a car dealership, but I'll bet they don't get to pull all those credit reports for free. They're already making money, they're already setting up these FICO scores, based on OUR personal credit histories and they are used to determine interest rates and car insurance rates--it's OUR personal information and we should be able to see it for free.

You do get to see your personal credit information for free. What you don't get to see is the FICO score which is not part of your personal information.

 

[VirtualLarry]

Originally posted by: new2AMD
credit reports dont help in figuring FICO scores. I have a myfico account. I disputed some things and had them removed. My total debt went down, my number accounts went down, my credit history got older, and number of negatives went down and yet my score dropped. I have no idea why and am not too happy about it.

Probably because you disputed some things. If you're not going to roll over and play a sheeple to large financial corps., they're going to penalize you for it, in order to "encourage compliance" in the rest of the population.

 

[dullard]

Originally posted by: FrustratedUser
I think the system is backwards. It should be based on the ratio of how much money you currently make to how much outstanding credit you have. Not based on how much credit you already have.

Put yourself in the bank's position.

Example 1:
A complete stranger comes to you personally. He makes $60k a year wants to borrow $30k from your bank account to buy a nice new car. He has no proof that he has ever paid anything back to borrowers. He has never borrowed money, he has no financial ties to anything, you pretty much know nothing about the person.

Example 2:
A complete stranger comes to you personally. He makes $60k a year wants to borrow $30k from your bank account to buy a nice new car. He has proof that he has borrowed money for credit cards, car loans, house mortages, etc and always pays back on time. You have years worth of paperwork showing when and how he borrows money and pays off those loans. You can accurately measure that this person was a low risk investment in the past.

Who do you make the loan to?

 

[VirtualLarry]

Originally posted by: FrustratedUser
I think the system is backwards. It should be based on the ratio of how much money you currently make to how much outstanding credit you have. Not based on how much credit you already have.

Of course it's backwards. The most profitable people to loan money to, are the ones least able to pay it back, and thus rack up unavoidable "finance charges" and the like. Why do you think so many "Rent A Center" places (and similar) open up in lower-class ghetto areas?

 

[FrustratedUser]

Originally posted by: Queasy

Originally posted by: FrustratedUser
I know how it works but I still think the system is retarded.

Example 1:
I work and make $60k/year. No loans and I can put plenty in savings. I go to the bank and ask for a car loan.
If you have no credit history they will basically tell you to fvck off even if you easily could pay that loan. You are now experiencing "Catch 22".

Example 2:
I work and male $60k/year. I got 3 credit cards with a total limit of $15k. Everything is charged to these cards and it adds up to around $2k/month. There is also a balance of ~$2k carried over every month.
I walk over to the bank and ask for a car loan. They cheer and welcome me as a king. I get a $20k loan (almost) no questions asked. Now, what tells them (based on the score) I won't go out and max out all my cards, making it impossible for me to pay this loan?
NOTHING!!

I think the system is backwards. It should be based on the ratio of how much money you currently make to how much outstanding credit you have. Not based on how much credit you already have.

I didn't say it was perfect. Part of the reason example 2 gets a loan over example 1 is because example 2 has shown that they can handle their credit by making payments on time every month. Example 1 has no credit history and thus is riskier in the bank's eyes because they have not shown that they can handle credit. If example 2 goes out and maxes its credit cards or misses a payment or two, you can bet that its credit score will drop like a rock.

Yeah but he still got the loan.

This is exactly why the scores are 'wrong'. I hate to be the guy who says "... back in my home country... bla bla bla" but this time I have to. If I were to go to the bank and ask for a $20k loan when I already have a $15k credit in CC, they would deny me the loan and say 'You don't make enough money to pay this back, sorry'.