• Nindelofocho@lemmy.world
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    9 months ago

    The first part of what you say is still off even. Its based on other factors like debt to income, income amount and credit utilization. different lenders also use different calculations depending on the type of loan. For example a mortgage wont be the same as an auto loan and theres even a system for renters the scores can vary wildly and really the numbers dont even mean fuck all half the time. Underwriting is a whole career and a company doing lending that knows anything will look at how well you actually pay your obligations and weight it with how much you make, practically ignoring the score itself. Ive seen people with 350s get top tier financing and people with 700s without even a thin file (low history) get completely denied or stupid interest rates.

    For reference I havent missed a single payment in my entire life, my credit is damn straight outside of some credit utilization on low limit cards and because of that my score is “mid” i dont really care at all though cause chasing the number will stress you out and you wont benefit much from it if you just make your payments anyways. Ive still gotten approved for most things ive applied for because of making my payments

    • partial_accumen@lemmy.world
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      9 months ago

      Its based on other factors like debt to income, income amount and credit utilization.

      You’re off on some of your measurements. FICO scores are based on only 5 inputs:

      • payment history (35%)
      • amounts owed (30%)
      • length of credit history (15%)
      • new credit (10%)
      • credit mix (10%).

      source

      different lenders also use different calculations depending on the type of loan.

      I already touched on that with the 16 different types of credit scores: source

      Underwriting is a whole career and a company doing lending that knows anything will look at how well you actually pay your obligations and weight it with how much you make, practically ignoring the score itself.

      You’re right that underwriting is a whole career, but we’re not talking about underwriting. We’re talking about FICO credit scores. You’re bringing in things that aren’t credit score, but are factors that lenders use for determining loan worthiness and interest they charge, but that isn’t FICO credit scores.

      Myself and OP are talking about the price of apples here. You’re asking me why an apple pie costs so much. Yes, apples are an ingredient in apple pies but not the only thing that influence the cost of the pie.