Help me on this one please

[Sarge]

I am having a hard time seeing the logic on this one,

http://www.nuwireinvestor.com/articles/fico-08-the-new-fico-credit-score-model-51467.aspx

They say they are going to give more points to a person who has more credit cards, an auto loan and a home loan. I have the credit cards, a brand new condo free and clear no loans on my autos. We pay our credit card billings off each month.

My question is, why would I get less points instead of more points. Does this make sense to anyone? They want people, who have more debt, to get higher scores to run up more debt?

Looks like the spouses are now going to get down graded.

They are making my head hurt.

 

[MoneyWhereMyMouthIs2]

I am having a hard time seeing the logic on this one,

http://www.nuwireinvestor.com/articles/fico-08-the-new-fico-credit-score-model-51467.aspx

They say they are going to give more points to a person who has more credit cards, an auto loan and a home loan. I have the credit cards, a brand new condo free and clear no loans on my autos. We pay our credit card billings off each month.

My question is, why would I get less points instead of more points. Does this make sense to anyone? They want people, who have more debt, to get higher scores to run up more debt?

Looks like the spouses are now going to get down graded.

They are making my head hurt.

Sounds like you'd get more points, if I understood it correctly.

Additionally, FICO 08 will give more credit points to consumers who maintain multiple lines of credit, such as a credit card, auto loan and home loan, while penalizing more heavily those people who use a lot of their available credit, according to the Wall Street Journal.

I remember hearing that banks don't like lending to people that need a loan. They'd like to lend you money when you don't need it. So, if you have several lines of credit you aren't maxing out, it makes sense to give you a new line of credit. For one thing, the risk has been evaluated several times prior. Second, if those lines aren't maxed out, it doesn't look like you're just trying to dig a deeper hole. Instead, it looks like you're seeking more competitive rates.

 

[misa]

Long time ago I read and heard that CC companies wants us to have debt so they can see how good we are in paying them, ie. how 'responsible' we are. Of course that is just a ploy on their part to get money from us. FICO is probably just another tool forcing us to conform to their debt culture.

 

[acptulsa]

Believe it or not, Sarge, they prefer people who don't pay off every month, because you don't pay interest.

If they make your head hurt, that just means you're paying attention to what they're doing. Kinda like the politicians.

 

[Sarge]

Thank you all.

I guess I was taking it that as I don't have an auto or house loan, I would get penalized.

I agree the banks only tolerate those that pay off their credit bill each month.

I just don't want to find it harder to get an auto loan, when it come time to buy a new car. With more people defaulting on auto loans it will be harder to get a good rate.