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"$cott" <ezmortgageloanz@aol.com> wrote in message
news:1145709752.786416.167100@t31g2000cwb.googlegroups.com...
>
> Jeff Strickland wrote:
>> "$cott" <ezmortgageloanz@aol.com> wrote in message
>> news:1145432026.203319.84670@u72g2000cwu.googlegroups.com...
>> >> It is odd that you are so poor and have such a good FICO score.
>> >
>> > Income and assets are not used to calculate credit scores, timely
>> > payments and low balances do.
>> >
>>
>> I know that, but as a general rule, people with low incomes also have low
>> FICO scores. Obviously, this rule of thumb isn't set in stone. The idea
>> is
>> that life costs money, and if one hasn't got the cash, they use credit.
>> Excessive credit drives scores down. Certainly, one can go through life
>> without using credit, or using credit well, and this is reflected in high
>> scores without regard to the income.
>
> IMHO, the whole credit monitoring industry is flawed for the same
> reasons I mentioned; FICOs have no attachment to income and assets.
> Case in point happened to me last week with a buyer that earned 600K a
> year, but he had maxed out his credit cards to the tune of 50K. His
> debt to income was in line, but he had a bad credit score because he
> had borrowed beyond the 70% of available credit on his CCs. Because
> income and assets have nothing to do with determining the score, the
> credit bureau's solution would be to pay off or bring the CC debt down
> to a 70% level. I had similar case earlier on in my career and I
> handled in a text book fashion (Mr. Customer we need to pay this and
> cancel that...) and lost my client because he was insulted that I'd
> make these suggestions. What did I do with my 600K client last week?
> I told him the "credit system is flawed because income and assets"
> story, asked him not to shoot the messenger, got him to pay some of his
> debt off and closed the deal.
>
Well, the whole point of the FICO score is to assess risk to the lenders. If
one has maxed out his credit, then his credit worthiness is diminished
regardless of his income. Basically, the FICO score says that past
performance is a reasonable indicator of future activity. If the past
performance is excessive, the score is driven down. Only time can fix this,
not sudden infusions of cash.
There are several criteria that go into the FICO score, including level of
debt, time/age of debt, type of debt. It is easy to have managable debt
relative to income, but still have a low score.
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Re: Ping or Calling Jeff Strickland Please Help
