douggieboy
most of us consider our ability to borrow money in our financial planning-- when doing property development and working in the real estate industry, this can become particularly important when costs of renovations over-run, time delays occur, and a vacancy appear unexpectedly and sits for a while.
last week i received a letter from one of my creditors explaining that my credit line was being reduced. this came out of the blue, with no rhyme or reason as to why they may have taken adverse action on the account. reading down through the explanation list, it became immediately apparent that this action was generated automatically by FICO; one primary reason was spelled out as an inconsistent payment history. this is impossible, as the account has been open since 1995, and i've never made a late payment.
about a year ago, another credit card company closed my account completely, and told me specifically that the reason was because my FICO score had dropped below 675. this one had also been kept in good standing at all times-- they agreed to give me 6.5% interest on the remaining balance, so i'm paying it off slowly.
people depend on creditors to act in good faith, and give best support, especially when the borrower always performs faithfully and promptly, as agreed. if i suddenly lose a $10,000 credit line, it isn't the end of the world, though i'll never do business with that bank again. Ass-ociate's National.
many banks and issuers of credit cards have software designed to review their clients' accounts on a regular basis, and adjust or close the account based upon one's FICO score at the time the automated review is run. on occasion, i have seen the credit limit on one of my accounts actually go up-- this, of course, is fine with me.
i've survived FICO's onslaught as long as i have due to the large amount of equity and resources i have at my disposal, and level of income. my business is seasonal-- if i make $1000+ a week in the winter i'm happy; in the summer i can make much more, and a $1000 week is a bummer. this past year has been particuarly bad due to the sagging economy and sept. 11. a cycle of borrowing in winter and repaying in summer has developed, and if i'm going to be doing a project, summertime is the time to let the contractors do their stuff. the one i did in 1999 drew out $300,000 between july and christmas, and i had to do more borrowing than usual to meet the payrolls, even though my paychecks were in the $3500 to as high as $6000 range every week. occasionally we see a 5-digit one when fortune shines upon us. my best week ever was in july, 1997; i made over $14,000 in one 7 day pay cycle, though this really is unusual.
thinking of the more average working person who depends upon credit to get through tough times:-- layoff, sickness, divorce, an apartment fire, being a crime victim-- it is important to know that your ability to borrow money may evaporate with prior notice and for no good reason, simply because of a random FICO generated review of an open account. the quackware moels are not written to consider one's income, assets, LTV on property owned, perfect account maintenance, or the nature and duration of the banking relationship between lender and borrower. loan officers are given no authority or discretion to intercede if they disagree with FICO mandated action taken on the account.
this means that if FICO doesn't like you, any and all open lines of credit you may have, and sometimes depend upon to get through any of life's unexpected hiccups, may suddenly be downgraded or vanish entirely, without warning. FICO's lunacy become blatantly apparent when one of my creditors sends me a letter explaining their adverse action of lowering my credit limit with an indictment of poor payment history, when the account has been open since 1995 and there has NEVER been a single late payment. more ammo the enemy is providing for the impending lawsuits coming up against {UN}fair isaac.
bankruptcies can only skyrocket when the uninformed consumer suddenly finds their "credit rating" destroyed, even though they have demonstrated responsible use of credit over many years. when a bank offers a credit card or overdraft protection, little do credit-worthy clients know that their borrowing privelges may be arbitrarily revoked at any time, due to {UN}fair isaac's quackware
everyone should be aware of the fact that FICO scoring doesn't have the capacity to evaluate borrowers accurately, and as the credit indusrty has let it dictate policy on a grand scale, anything can happen to you, me, or mrs. jones down the road. rarely does its effect make a positive influence anywhere, though if you find yourself being able to benefit from it, milk if for all it's worth. once in a while a fluke in the system does occur in a consumer's favor. bear in mind that most lenders no longer look at a clients actual credit profile-- all they see are FICO scores, so don't worry about what is on your report. bankruptcy, charge-offs, reposessed car-- it means nothing if the quackware gives you an adequate score.
the reliability and fairness of FICO's quackware could be improved enormously with a few simple modifications to their programs. if a borrower is seeking to restructure a large debtload, the models could be configured to consider what that person's obligations would be after the restructuring has been done. no more 18% interest on credit cards-- that all goes into a 75% or 80% LTV mortgage at 6.25%-- sweet and clean and tax deductible too-:).
$130,000 in credit card debt?-- yes, all at 3% for 6 months. that money didn't go to the casinos; it went into my properties, and that's how they appraised so well afer the work was done.
DEBT?--- how much is too much?-- that depends upon how the debt was generated, and the means a borrower has to repay it. what security is offered to the lender in the event the borrower defaults? brick buildings don't get up and walk away, and land value here in cambridge mass is $4 million/acre.
for over two years, i was forced to carry 4 mortgages with sub-prime portfolio lenders, because my FICO score locked me out of fannie mae/freddie mac loan products. that $130,000 in plastic went to 18%+-, and i had to carry that because i couldn't use the equity in my properties, well over $500,000, to consolidate it, all because of FICO scoring. i finally had to sell one property, as i could no longer afford to carry the debt load at such high interest rates. the 4 mortgages i had were at 8.625 to as high as 11%.
FICO scoring ruins lives, and should be abolished.
it is one horrible blight upon consumer rights and the american dream.
good morning--:cool:
last week i received a letter from one of my creditors explaining that my credit line was being reduced. this came out of the blue, with no rhyme or reason as to why they may have taken adverse action on the account. reading down through the explanation list, it became immediately apparent that this action was generated automatically by FICO; one primary reason was spelled out as an inconsistent payment history. this is impossible, as the account has been open since 1995, and i've never made a late payment.
about a year ago, another credit card company closed my account completely, and told me specifically that the reason was because my FICO score had dropped below 675. this one had also been kept in good standing at all times-- they agreed to give me 6.5% interest on the remaining balance, so i'm paying it off slowly.
people depend on creditors to act in good faith, and give best support, especially when the borrower always performs faithfully and promptly, as agreed. if i suddenly lose a $10,000 credit line, it isn't the end of the world, though i'll never do business with that bank again. Ass-ociate's National.
many banks and issuers of credit cards have software designed to review their clients' accounts on a regular basis, and adjust or close the account based upon one's FICO score at the time the automated review is run. on occasion, i have seen the credit limit on one of my accounts actually go up-- this, of course, is fine with me.
i've survived FICO's onslaught as long as i have due to the large amount of equity and resources i have at my disposal, and level of income. my business is seasonal-- if i make $1000+ a week in the winter i'm happy; in the summer i can make much more, and a $1000 week is a bummer. this past year has been particuarly bad due to the sagging economy and sept. 11. a cycle of borrowing in winter and repaying in summer has developed, and if i'm going to be doing a project, summertime is the time to let the contractors do their stuff. the one i did in 1999 drew out $300,000 between july and christmas, and i had to do more borrowing than usual to meet the payrolls, even though my paychecks were in the $3500 to as high as $6000 range every week. occasionally we see a 5-digit one when fortune shines upon us. my best week ever was in july, 1997; i made over $14,000 in one 7 day pay cycle, though this really is unusual.
thinking of the more average working person who depends upon credit to get through tough times:-- layoff, sickness, divorce, an apartment fire, being a crime victim-- it is important to know that your ability to borrow money may evaporate with prior notice and for no good reason, simply because of a random FICO generated review of an open account. the quackware moels are not written to consider one's income, assets, LTV on property owned, perfect account maintenance, or the nature and duration of the banking relationship between lender and borrower. loan officers are given no authority or discretion to intercede if they disagree with FICO mandated action taken on the account.
this means that if FICO doesn't like you, any and all open lines of credit you may have, and sometimes depend upon to get through any of life's unexpected hiccups, may suddenly be downgraded or vanish entirely, without warning. FICO's lunacy become blatantly apparent when one of my creditors sends me a letter explaining their adverse action of lowering my credit limit with an indictment of poor payment history, when the account has been open since 1995 and there has NEVER been a single late payment. more ammo the enemy is providing for the impending lawsuits coming up against {UN}fair isaac.
bankruptcies can only skyrocket when the uninformed consumer suddenly finds their "credit rating" destroyed, even though they have demonstrated responsible use of credit over many years. when a bank offers a credit card or overdraft protection, little do credit-worthy clients know that their borrowing privelges may be arbitrarily revoked at any time, due to {UN}fair isaac's quackware
everyone should be aware of the fact that FICO scoring doesn't have the capacity to evaluate borrowers accurately, and as the credit indusrty has let it dictate policy on a grand scale, anything can happen to you, me, or mrs. jones down the road. rarely does its effect make a positive influence anywhere, though if you find yourself being able to benefit from it, milk if for all it's worth. once in a while a fluke in the system does occur in a consumer's favor. bear in mind that most lenders no longer look at a clients actual credit profile-- all they see are FICO scores, so don't worry about what is on your report. bankruptcy, charge-offs, reposessed car-- it means nothing if the quackware gives you an adequate score.
the reliability and fairness of FICO's quackware could be improved enormously with a few simple modifications to their programs. if a borrower is seeking to restructure a large debtload, the models could be configured to consider what that person's obligations would be after the restructuring has been done. no more 18% interest on credit cards-- that all goes into a 75% or 80% LTV mortgage at 6.25%-- sweet and clean and tax deductible too-:).
$130,000 in credit card debt?-- yes, all at 3% for 6 months. that money didn't go to the casinos; it went into my properties, and that's how they appraised so well afer the work was done.
DEBT?--- how much is too much?-- that depends upon how the debt was generated, and the means a borrower has to repay it. what security is offered to the lender in the event the borrower defaults? brick buildings don't get up and walk away, and land value here in cambridge mass is $4 million/acre.
for over two years, i was forced to carry 4 mortgages with sub-prime portfolio lenders, because my FICO score locked me out of fannie mae/freddie mac loan products. that $130,000 in plastic went to 18%+-, and i had to carry that because i couldn't use the equity in my properties, well over $500,000, to consolidate it, all because of FICO scoring. i finally had to sell one property, as i could no longer afford to carry the debt load at such high interest rates. the 4 mortgages i had were at 8.625 to as high as 11%.
FICO scoring ruins lives, and should be abolished.
it is one horrible blight upon consumer rights and the american dream.
good morning--:cool: