Anonymous
Anonymous asked in Business & FinanceCredit · 4 weeks ago

Is the credit score system broken?

I paid off my credit card in full, but my score descreased regardless. Do credit report agencies like consumers to stay in debt?

11 Answers

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  • Anonymous
    4 weeks ago

    The credit system is dumb.  20 years ago, I had no debts at all, a college degree and a $60k/yr job.  They wanted a cosigner for a small apartment.  Then when I went to purchase my first brand new car, the bank asked for a cosigner despite having enough in the bank to buy the car outright several times. But, when I went to buy my house, they preapproved me for an absolutely stupid amount of money that I knew I couldn't afford.  I ended up buying when the housing market crashed and have doubled my money on the house I bought for a fifth of what they approved me for. 

  • 4 weeks ago

    Yes it is 100% broken. I tried to buy a vehicle the other day and found out that I couldn't because my Credit Score was 551. Even though the Vehicle only cost $21,000 and I was paying $14,500 down, I still had to get a Co-signer with them being the Primary and me being the Secondary. I found out that every month that you don't acquire some debt, you lose around 5 points. I've been totally Debt Free since June 2014 and I'm considered a Bad Risk since I have paid in Cash or Debit Card for everything since June 2014.

  • 4 weeks ago

    if you have debt then weather you pay it or not your credit line will lower itself at first even though you just paid it wait a while then check your score again but don't get into the credit cards because that is what did it to begin with 

  • 4 weeks ago

    Just paying off a credit card won't automatically fix your credit score.

    Credit report agencies don't have any desire for people to 'stay in debt', but there are things you need to do in order to fix bad credit, or build credit (the only thing worse than bad credit, is no credit).

    -Pay Your Bills on Time-Get Credit for Making Utility and Cell Phone Payments on Time-Pay off Debt and Keep Balances Low on Credit Cards and Other Revolving Credit

    -Apply for and Open New Credit Accounts Only as Needed-Don't Close Unused Credit Cards

    Start by getting a copy of your credit report and make sure there isn't anything showing up on it erroneously.

    I've had to deal with several situations that could have messed up my credit - most recently was when I had a roof put on my house.  One of the companies I got a quote from (and asked about financing) actually took out credit cards for both me and my wife - totally nearly $20K. 

    When I called to complain that they had done this, they tried to claim that I had signed a contract (which I absolutely hadn't).  Fortunately I was able to dispute and cancel both without my, or my wife's credit, taking a hit.

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  • Anonymous
    4 weeks ago

    No, not at allll.

  • Anonymous
    4 weeks ago

    No the metrics used for Credit Scoring it does often cause a dip if you do a massive payoff.  However, after a couple of months your score will bounce back and be better than it was.  

    However, Credit Scores do like to see activity.  That is you will have a much better score by using your credit a little each month and paying it off than if you left a zero balance.  

  • Anonymous
    4 weeks ago

    The CRAs do not care what amount of debt you have. Yes, your score is likely to bounce back up. I am former CRA employee, if anything they earn income when people brush up their scores by actually paying down debts because potential creditors pay for their hits. People with very low scores will go to creditors that do not check credit scores, like the used car lots that specialize in exploiting the poor, payday loans, etc. 

    Obviously, people like mortgage brokers are not making credit report hits on people with hopeless credit scores. This is why creditors want your score to improve. They are the entities that want you in debt, not the CRAs.  Pull your full report and see if their is anything you can reasonably dispute.

    It is just a fact that former creditors may not respond to a dispute because they do not earn revenue from CRA disputes. If the creditor does not back up their information, the debtor wins that dispute. 

  • 4 weeks ago

    It decreased slightly, and will bounce back up.

  • 4 weeks ago

    Your activity with your creditors is not reported real time.  You paying it off today may take a couple weeks for it to reflect on your score.  This is why you're told not to keep balances on your cards for a month prior to a big purchase (car or house) as the timing may be off.

    Paying off your debt will do little for your score.  It will increase it due to a better credit utilization number (how much credit are you using out of how much is available to you), but other than that it won't matter.  Other things may have affected your score as well.

  • Anonymous
    4 weeks ago

    Not at all. Never in the last 15 or so years has my score been off. Every single move has had a rational explanation. (There is a delay for things to show up, both good and bad)

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