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the biggest credit score myths #2822974
09/20/20 04:52 PM
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Mr T2U Offline OP
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good info on common credit myths that can effect your credit score.

Credit Score Myths


perception is 90% of reality
Re: the biggest credit score myths [Re: Mr T2U] #2823082
09/20/20 09:38 PM
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Let me condense the "myths":"

1. Its misnamed, its Fecal score
2. Any entity that uses it, makes more money with the lower the customers score by charging disproportionate higher rates, the key word here is "disproportionate", meaning inflated
3. The lower ones score, the weaker a customers bargaining position financially is on anything, ie credit, car insurance, etc
4. The credit scoring companies will NEVER disclose exactly how your score is derived, think "mushroom", as that dispels the "myth"
5. Lowest score is "300", know anyone with a 300, and what do you have to do to get a 300?


Reality check, that half the population is smarter then 50% of the people and it's a constantly contested fact.
Re: the biggest credit score myths [Re: Mr T2U] #2823109
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I paid off all my debt and my score dropped 30 points, figure that one out.

Re: the biggest credit score myths [Re: SRT6776] #2823110
09/20/20 11:03 PM
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Originally Posted by SRT6776
I paid off all my debt and my score dropped 30 points, figure that one out.


Same here. To the T.

Re: the biggest credit score myths [Re: Myrtle] #2823114
09/20/20 11:18 PM
09/20/20 11:18 PM
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I got my debt to a point where a consolidation loan made sense. 'Paid off' my credit cards, my score jumped 35 points! boogie Then the loan hit the credit report and my score dropped 40 points. So, my score is now lower than when I started....... shake_head


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Re: the biggest credit score myths [Re: SRT6776] #2823116
09/20/20 11:44 PM
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Originally Posted by SRT6776
I paid off all my debt and my score dropped 30 points, figure that one out.

Same here, last year checking monthly when I’d get my Discover bill, I was always 835 to 850.
Paid off my mortgage late last year and the balance of my HELOC this year now Discover says being debt free means I’m down to 810-825. shruggy

Re: the biggest credit score myths [Re: Mastershake340] #2823151
09/21/20 07:00 AM
09/21/20 07:00 AM
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Originally Posted by Mastershake340
Originally Posted by SRT6776
I paid off all my debt and my score dropped 30 points, figure that one out.

Same here, last year checking monthly when I’d get my Discover bill, I was always 835 to 850.
Paid off my mortgage late last year and the balance of my HELOC this year now Discover says being debt free means I’m down to 810-825. shruggy


No one would pay any attention to a drop like that, though. Virtually no difference between an 810 and an 850 when it comes to anything. thumbs


Earning every penny of that moderator paycheck.

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Re: the biggest credit score myths [Re: SRT6776] #2823157
09/21/20 07:57 AM
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Originally Posted by SRT6776
I paid off all my debt and my score dropped 30 points, figure that one out.


if you actually understand credit scores and how they work, it's pretty easy to figure out.
paying off your mortgage is just like canceling a credit card you had long term. doing this removes a LONG term active positive event from your credit history. doing this changes your length of credit reported used to determine your credit score.

a similar credit event would happen if you applied and received a NEW CREDIT CARD ACCOUNT, not a new card from a EXISTING account.

going from a 850 to a 810 won't really make much difference on you financially and that # won't stay that low for to long if you continue to use credit responsibly. if you don't used credit actively this number will continue to get lower.


perception is 90% of reality
Re: the biggest credit score myths [Re: SattyNoCar] #2823159
09/21/20 08:05 AM
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Originally Posted by Satilite73

I got my debt to a point where a consolidation loan made sense. 'Paid off' my credit cards, my score jumped 35 points! boogie Then the loan hit the credit report and my score dropped 40 points. So, my score is now lower than when I started....... shake_head



again. you changed the length of your credit history used to determine your credit score.
when you paid off your credit cards you lowered the PERCENTAGE of available credit used doing so. this raises your credit score.
now you opened a new account with your loan consolidation loan. this shortens the length of credit you have in your credit history. this lowers your score.
CONGRATULATIONS on paying off your credit card debts. continue to use credit responsibly and your credit score will rise in not to long.

Last edited by Mr T2U; 09/21/20 08:06 AM.

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Re: the biggest credit score myths [Re: Mr T2U] #2823161
09/21/20 08:17 AM
09/21/20 08:17 AM
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a few posts show how people don't understand how credit scores are determined. this is why i posed the linked article.
it's a short slide show that won't effect your computer in any way.

a LOT of people don't understand how credit works and how your credit rating scores are determined.

your credit score might be one of the most important things that effect you financially.
i am no expert on credit scores. but i do have a understanding on how it is determined.
i would suggest people do their own research on credit scores and how they are determined. then work on getting this score higher. if you do this you might just find more $$$ in you bank account at the end of the year.


perception is 90% of reality
Re: the biggest credit score myths [Re: jcc] #2823165
09/21/20 08:27 AM
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Originally Posted by jcc
Let me condense the "myths":"

1. Its misnamed, its Fecal score
2. Any entity that uses it, makes more money with the lower the customers score by charging disproportionate higher rates, the key word here is "disproportionate", meaning inflated
3. The lower ones score, the weaker a customers bargaining position financially is on anything, ie credit, car insurance, etc
4. The credit scoring companies will NEVER disclose exactly how your score is derived, think "mushroom", as that dispels the "myth"
5. Lowest score is "300", know anyone with a 300, and what do you have to do to get a 300?



answer to #4 directly from one of the companies who calculate credit scores.now the exact percentage events change the score is a trade secret.
How Credit Score are calculated.

#5 is pretty easy also. EVERYONE in the USA with a SS # or a green card starts out with a 300 score. the moment you do anything financially related with a bank effects this score.

here is a SAFE government sponsored link on how to get your FREE credit report.
how to get a FREE credit report

Last edited by Mr T2U; 09/21/20 08:28 AM.

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Re: the biggest credit score myths [Re: Mr T2U] #2823260
09/21/20 12:53 PM
09/21/20 12:53 PM
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Originally Posted by Mr T2U
Originally Posted by jcc
Let me condense the "myths":"

1. Its misnamed, its Fecal score
2. Any entity that uses it, makes more money with the lower the customers score by charging disproportionate higher rates, the key word here is "disproportionate", meaning inflated
3. The lower ones score, the weaker a customers bargaining position financially is on anything, ie credit, car insurance, etc
4. The credit scoring companies will NEVER disclose exactly how your score is derived, think "mushroom", as that dispels the "myth"
5. Lowest score is "300", know anyone with a 300, and what do you have to do to get a 300?



answer to #4 directly from one of the companies who calculate credit scores.now the exact percentage events change the score is a trade secret.
How Credit Score are calculated.

If my use of the word "exact" is disregarded, and one drinks the koolaid

#5 is pretty easy also. EVERYONE in the USA with a SS # or a green card starts out with a 300 score. the moment you do anything financially related with a bank effects this score.
Really, why not then start out at "0", unless 300 is an arbitrary number for a psychological elevating effect, and then by your explanation, one can stiff a few creditors when at 300 and it can't go lower? Great system.
here is a SAFE government sponsored link on how to get your FREE credit report.
how to get a FREE credit reportA "Free" offering is a poor token fake benign attempt to deflect from a intentionally obtuse credit reporting scoring system.


Reality check, that half the population is smarter then 50% of the people and it's a constantly contested fact.
Re: the biggest credit score myths [Re: Mr T2U] #2823339
09/21/20 03:23 PM
09/21/20 03:23 PM
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Pay cash as much as possible, and you can tell them to stick their credit score where the sun don't shine. Just one more shackle the financial institutions want to have over all the 'good little consumers' out there....

Re: the biggest credit score myths [Re: Sixpak] #2823390
09/21/20 06:14 PM
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Originally Posted by Sixpak
Pay cash as much as possible, and you can tell them to stick their credit score where the sun don't shine. Just one more shackle the financial institutions want to have over all the 'good little consumers' out there....


Sometimes its actually a very good idea to have several good credit lines to establish a track record as one who pays his bills on time( those credit lines certainly don't have to be credit cards)
For instance, some of the car manufacturers offer 0% for 72 months occasionally. It makes very good sense in most any instance to take advantage of such deals instead of paying cash, if in the market.You had for sure better have that cash earning you more than 0% wherever you have it.
And no lender will loan you money at such a rate without an established track record.
Would you let somebody who had never been down the track make a lap in a 9 car you owned?
You sound very out of touch with reality

Last edited by B3422W5; 09/21/20 06:16 PM.

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Re: the biggest credit score myths [Re: B3422W5] #2823397
09/21/20 06:39 PM
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you beat me to that point.

i will also point out using a cash back card then pay the balance off every month in full you get FREE money.

before you start off on nothing is free rant. YES it's free $$$ that you are passing by with only cash attitude. merchants pay a percentage of the total charges they bill the Credit card company. the free $$$ comes from this fee. the problem is most consumers are usually not the brightest bulb in the box. they carry a balance every month and pay interest on it. in a LOT of cases the interest rate in in the 30% area. the free $$$ also comes from this.
now if you charge it with your cash back card then pay the bill in full it's exactly the same as paying cash in most situations and you get cash back at the end of the month. YES you can try to negotiate a lower bill by paying cash.it does work but not to often in my experiences. in most cases the person running the cash register will look at you like you are speaking a foreign language, worse yet they probably can't give you any discount if they actually understand what you are saying.


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Re: the biggest credit score myths [Re: Sixpak] #2823483
09/21/20 11:22 PM
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Originally Posted by Sixpak
Pay cash as much as possible, and you can tell them to stick their credit score where the sun don't shine. Just one more shackle the financial institutions want to have over all the 'good little consumers' out there....


Using credit to your advantage is a smart way to financial freedom.

Last edited by Dcuda69; 09/21/20 11:23 PM.
Re: the biggest credit score myths [Re: Sixpak] #2823484
09/21/20 11:23 PM
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Originally Posted by Sixpak
Pay cash as much as possible, and you can tell them to stick their credit score where the sun don't shine. Just one more shackle the financial institutions want to have over all the 'good little consumers' out there....


Holy Sh*t. I just agreed with Sixpack, shock

Re: the biggest credit score myths [Re: Ramrod39] #2823485
09/21/20 11:29 PM
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I paid off everything about 10 years ago, including my house. Now I only buy things that I can pay for in cash. I don't do debt. Feels great. It is surprising how much money you have when you don't have to make monthly payments. twocents

Last edited by Ramrod39; 09/21/20 11:30 PM.
Re: the biggest credit score myths [Re: Ramrod39] #2823721
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Originally Posted by Ramrod39
I paid off everything about 10 years ago, including my house. Now I only buy things that I can pay for in cash. I don't do debt. Feels great. It is surprising how much money you have when you don't have to make monthly payments. twocents
boogie Great feeling, ain't it? Sadly, the financial industry in this country want to start off people thinking it's ok to be in debt; that it's a normal thing, and as young as possible. Debt isn't something to be ashamed of, but neither should it be something to be normalized. Their business models would have you making payments for the rest of your life. Then again. maybe if there was some shame connected to debt, people might feel more obligated to pay it back...
And credit scores? No one commercial company should be allowed to possess so much information about someone that it makes that information valuable enough to steal and potentially ruin someone's life with, with seemingly little punishment when such a theft occurs.

Last edited by Sixpak; 09/22/20 05:32 PM.
Re: the biggest credit score myths [Re: Sixpak] #2823763
09/22/20 06:46 PM
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i will clarify.
the only debt i have is my mortgage. i could pay it off tomorrow if i wanted to. i would have to cash in some investments to do so. i am in a 3.125% interest fixed rate 30 year mortgage i took out in 2009 and i am only making the minimum payments. i owe about $30K on my house.i pay $650 a month in payments that include $400 a month in property taxes and $75 a month in homeowners insurance. i use the cash i would have sent to the bank and invest it in low risk investments that currently pay in the 6% annual range. i earn about $7,000 a year from these investments.
i use my cash back card DAILY and as often as i can. i pay the balance off in full every month and it pays me back about $100 a month for using it instead of only paying cash. the end of the month the result is the same as paying cash when i make the purchase..


if i only paid cash and i paid off my mortgage like you suggest i would LOOSE about $5,000 a year if you deduct my principal payments on my mortgage.

i will also add because i regularly use debt it keeps my credit rating high so i get a better rate in my insurance premiums than if i only used cash.



Last edited by Mr T2U; 09/22/20 06:55 PM.

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