Bad news: The new FICO score changes could impact the credit cards you qualify for

[Nature Boy 2.0 8,327]

1 hour ago, ALFKAD said:

Don't get me wrong, airline miles CAN net you some great deals.  A buddy recently transferred 50,000 points from a CC to his Amex airline miles card, got something like 3X or 5X the points for transferring, and paid his way round trip to Africa last year.  Had that been my daily-use card, I would have gotten $1250 cash.  His value was definitely more (I think his seat would have been around $4500-5K had he paid in dollars?)

I'm just not patient enough to look for deals like that.  I prefer to let the cash build for about a year, then simply apply it to one CC statement.

as I think you know we do Korean Air and usually get one or 2 free tickets every couple of years. Might be smarter to take the cash back in the long run. Of course free air miles might not be as big of a deal to some.

[Steeleballz 7,550]

11 minutes ago, Nature Boy 2.0 said:

as I think you know we do Korean Air and usually get one or 2 free tickets every couple of years. Might be smarter to take the cash back in the long run. Of course free air miles might not be as big of a deal to some.

 

  They are great in the right situation. We have several people who use their own air miles rewards cards for work related business. They get reimbursed for the cost by the company, but they get a ton of free air miles on the side. We have one guy who goes to the PI in the fall and somewhere in Europe every spring and he told me he usually has enough free air miles racked up to cover both flights for him and his wife.

 

  For people like me who don't really go anywhere, it's not so much of a big thing.

[Nature Boy 2.0 8,327]

Just now, Steeleballz said:

 

  They are great in the right situation. We have several people who use their own air miles rewards cards for work related business. They get reimbursed for the cost by the company, but they get a ton of free air miles on the side. We have one guy who goes to the PI in the fall and somewhere in Europe every spring and he told me he usually has enough free air miles racked up to cover both flights for him and his wife.

 

  For people like me who don't really go anywhere, it's not so much of a big thing.

or if you worked for an airline.

[Voice of Reason 10,298]

1 hour ago, Nature Boy 2.0 said:

as I think you know we do Korean Air and usually get one or 2 free tickets every couple of years. Might be smarter to take the cash back in the long run. Of course free air miles might not be as big of a deal to some.

As I said, if you take the time to look for great deals, as the guy I mentioned above (who works for an airline), or the examples that Burnt gave (non-airline travel), you can really rack up the savings, on either type of rewards.  I am more of a buy-it-and-forget-it kind of guy, just apply the $$ to the bill whenever I think of it.  Amazon $$ typically get used every month, whereas other CC cash values stack up for a year or more before I think to apply them.

If I had the patience to search out good deals in flying or hotels or regularly-purchased items, I am sure I could do better.

[OriZ 3,157]

9 hours ago, ALFKAD said:

I understand that you can't admit your market predictions have been wrong for quite some time now.  One day, you WILL be right, I promise.  

 

As to the bold part, I don't see how you came to that conclusion.  My past performance is highly accurate, in a bank's eyes.  My future earnings, a lot more risky.  So for them to take a chance that I will continue to earn more, I show them my recent performance, and they decide whether or not I am worth the risk.  

 

And FWIW, I DID listen.

Nah, you didn't listen, we both know that.

 

As for market predictions, I'm right alot more than I'm wrong, so no worries there.

[OriZ 3,157]

8 hours ago, Nature Boy 2.0 said:

When we pull an app, and you see late payments or repos on previous car loans, which is reflected in the score. Its a pretty good indicator to a lender of future behavior.  We do have some secondary lenders that will do the 550's with BK's or repos, but its often at 18-21% interest and they plan for a high % of repos in their business model. When you have people come in that are 820's and have a long history of paying their auto loans on time, the chance of them defaulting is almost 0% and they qualify for an interest in the 2's

 

Also when someone dips into the 670's and below, the banks usually require proof of residence and income, unless they put a lot of money down

I'm just saying the amount of weight they put on it  is just not justified. It's a very backward looking system instead of being forwards looking.

[Voice of Reason 10,298]

2 minutes ago, OriZ said:

I'm just saying the amount of weight they put on it  is just not justified. It's a very backward looking system instead of being forwards looking.

Tell me how much I will make in two years.  I'll wait...

[Burnt Reynolds 5,058]

4 minutes ago, OriZ said:

I'm just saying the amount of weight they put on it  is just not justified. It's a very backward looking system instead of being forwards looking.

The only way to do that is to make accurate modeling, which has never been done, because there's no way to accurately predict a near infinite number of outcomes without serious controls that aren't realistic.

 

So naturally, they assume past behavior is a good predictor of future behavior. 

 

Sure, it's flawed, but I know of no better alternatives, beyond giving the finger to finance and buying everything in cash.

Edited January 26, 2020 by Burnt Reynolds

[OriZ 3,157]

16 minutes ago, ALFKAD said:

Tell me how much I will make in two years.  I'll wait...

I did. I made it. you didn't listen

[OriZ 3,157]

16 minutes ago, Burnt Reynolds said:

The only way to do that is to make accurate modeling, which has never been done, because there's no way to accurately predict a near infinite number of outcomes without serious controls that aren't realistic.

 

So naturally, they assume past behavior is a good predictor of future behavior. 

 

Sure, it's flawed, but I know of no better alternatives, beyond giving the finger to finance and buying everything in cash.

There are alternatives, just need to poke the head outside of the US a little bit

[Dashinka 23,348]

16 minutes ago, Burnt Reynolds said:

The only way to do that is to make accurate modeling, which has never been done, because there's no way to accurately predict a near infinite number of outcomes without serious controls that aren't realistic.

 

So naturally, they assume past behavior is a good predictor of future behavior. 

 

Sure, it's flawed, but I know of no better alternatives, beyond giving the finger to finance and buying everything in cash.

Sound like trying to do a DFMEA for an autonomous vehicle.

[Voice of Reason 10,298]

3 minutes ago, OriZ said:

I did. I made it. you didn't listen

That makes no sense.  You're saying looking back at a credit history is "backwards looking" and it needs to be more "forward looking".  So how can you, as a bank finance manager, predict how well a loan applicant pay their loan if all you do is look forward?

[OriZ 3,157]

3 minutes ago, ALFKAD said:

That makes no sense.  You're saying looking back at a credit history is "backwards looking" and it needs to be more "forward looking".  So how can you, as a bank finance manager, predict how well a loan applicant pay their loan if all you do is look forward?

Like I said, I think they put too much emphasis on it. I didn't say they need to do away with it completely. But me personally, I'd take someone who is showing a good income/expense ratio right now even if their score is a little lower, over someone who might have a higher score based on past performance but isn't making much money right now. IMO there are many factors that determine a borrower's creditworthiness, and credit score should be but a small part of that.

Edited January 26, 2020 by OriZ

[Voice of Reason 10,298]

12 minutes ago, OriZ said:

I did. I made it. you didn't listen

If you're referring to crypto here, after getting started with your help, my current portfolio is -88.15% after two years.  Worst "investment" ever.  My stocks and mutuals, however, are doing pretty darn well.

[Burnt Reynolds 5,058]

31 minutes ago, OriZ said:

There are alternatives, just need to poke the head outside of the US a little bit

Won't lie, my imagination ran amok with that.

 

But I'm physically entirely out of the US right now. 😉