| This whole post is incorrect. I have been monitoring (really micromanaging) my credit closely for ~5+ years and none of which you say is accurate in my experience and your numbers sound completely made up. 60 plus point hit from someone otherwise creditworthy? No, just no. I had ~$120,000 in revolving credit. I opened up a new card with an $8,000 limit and maxed it out so 99% utilization hit my report on one card. My credit score only dropped about 20-30 points and it mostly recovered in about 3 months even though I was only been paying the minimum 1% balance. (I was riding the interest free period). Don't think your $300 limit example is very realistic. Credit limits are only ~$300 on customers without a credit history or one with poor credit. Companies typically will automatically up the credit limit as high risk customers become more creditworthy. Nobody with $100,000 in revolving credit has such a low credit limit on an individual card (and even if they did, it would be as simple as asking for an increase, as a $300 credit limit on a card you plan on actually using is totally infeasible) Old versions of FICO are not typically used for mortgages, don't know where you got that "information" from. I got a mortgage last year and FICO 8 was used. I got 3 quotes and all lenders used FICO 8. (this information was disclosed to me) I didn't have any installment loans for many years and I was not penalized. My FICO 8 score was 750+ every single month for years with only two credit cards as my history. As long as you have a strong credit history installment loans mean nothing over revolving accounts. Maybe you'll get a 20-40 point increase from opening a new installment account, but that would likely come with opening up a new revolving account as well. Furthermore, everything I've read about FICO 8 says closed accounts count the same as open accounts for FICO 8 so taking out a loan and paying it off the next day counts the same as taking out a loan and paying it off over several years. FICO is neither stupid or evil, its totally rational from the lender's perspective. I'm trusting there was some actual number crunching that went into these algorithms. Lenders, landlords, and insurance companies wouldn't use it if it wasn't working for them. Is it unfair to some populations? Yes, I don't think that is disputed, HOWEVER, it's "obvious" from a layman's perspective that someone who has used credit wisely is less risk then someone whose never used credit. The unintended side effect is punishing people who don't have a use for credit. Credit cards are becoming more important though for everyday life, I once saw someone get turned away from renting a car because he only had a debit card and no credit card. |
Googling will get you dozens more. Maybe you found one fico8 lender; good for you. More likely, you have no idea at all what you're talking about. Further, experiments mentioned above (you can find on creditboards or r/churning) were replicated across many people, not just one.