Veterans Zone Credit Monitoring

Discussion in 'Veterans Zone' started by F350-6, Jun 22, 2015.

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  1. XDM45 Vet Zone Founding Member

    I have no idea 'how much'. I have no idea....and don't WANT to know.....how much debt you're carrying. The amount of interest you pay won't reflect a FICO score. The number of active debt/credit accounts you have active and pay on time will.........

    The fact is...you are spending more money on 'stuff' because (if I read your previous post correctly) you make a lot of credit purchases.........and pay them off every month......
     
    XDM45, Aug 1, 2015
    #31

  2. F350-6 Vet Zone Texas Chapter Founding Member

    You just keep focusing on generalizations and listening to Dave Ramsey Steve. Just because most people who use cards don't focus on price as much as cash customers doesn't mean that's the way it has to be.

    There are also studies out there about people who spend all their cash or credit just because the sign says it's on sale, even if it's not.

    And in terms of credit history, you don't have to have a lot of accounts, you just have to use them and pay them timely. You don't even have to spend much money. Just enough to show it was used. I've got 2 credit cards I use. One for fuel, the other for other stuff. One of the cards says member since 89 and the other says since 93. One of them has a $5,000 limit on it because I've never had a balance near that high on the card.

    I think I'll keep my head in the sand since it works. To me, Dave Ramsey's advice is mostly basic stuff, but ramped up to the extreme for people who have no self control
     
    F350-6, Aug 1, 2015
    #32
    XDM45 likes this.

  3. FTZ HAIC Staff Member Oregon Chapter Founding Member

    Any place giving a "cash discount" at pumps is violating Visa, Mastercard, Amex, etc. policies. When you have a credit card merchant account, you're not allowed to charge more for using a card. Maybe it's common where you are, but I know in Georgia/Alabama, it's pretty rare to see a station still practicing this.

    Yes, on average it is a fact. But if you're like us, everything is budgeted, and we don't exceed it.
     
    FTZ HAIC, Aug 2, 2015
    #33

  4. FTZ HAIC Staff Member Oregon Chapter Founding Member

    We've had zero debt for over a decade, even our vehicles are bought with the one payment plan. And we have high credit scores. Cost? Zero.

    You're probably right with some employers, but it's a lawsuit happy society, some employers don't even want the mere appearance they took a risk.

    Dave doesn't even know the basic fundamentals of credit scores....

    1. There is no such thing as a zero credit score. The lowest score is a 300.
    2. Closed accounts do not drop off your credit report in "about 6 months." That is flat out 100% wrong! Closed accounts paid off will stay there 10 years as part of your long term credit payment history. Unpaid closed accounts, 7 years.

    Remember.... Ramsay is a salesman, who makes a great deal of money using his radio show to sell books, tools, and his "university" plus referral fees from his provider network (and don't even get me started on some of the flat out unethical things he's doing with that!)

    In my opinion Dave's advice is better than the reckless path the bulk of his audience has been on... but it's not the best advice.
     
    FTZ HAIC, Aug 2, 2015
    #34
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  5. XDM45 Vet Zone Founding Member

    I'm sure convenience stores and other retail don't give a s--t whether they're violating other companies' policies......The fact is, they're doing it.

    Just like certain companies in your previous point/post are violating fair business-consumer practices by applying FICO scores to jack up rates even though the services they are providing have nothing to do with FICO scores.

    Sucks when the shoe's on the other foot, ay sir?

    You've got more experience on internet debate boards than I do....granted. But you know damned well when this topic pops up, the only thing you're going to hear is 'I don't spend too much'.......or 'I pay off my balances in full'........or 'I'm not like those other fools in the studies'........and 'I know how to handle debt and credit and never made a mis-step'......and 'I never.........................'...(never mind...you get the point).

    Either the full picture is never relayed, or FTE/FTZ is an incredibly remarkable community of financially-fiscally perfect individuals for whom no consumer/marketing studies apply.........

    And if the 'consuming' public was made up of nothing but FTE/FTZ members, the credit lenders would go out of business because we were putting one over on them.......:)
     
    XDM45, Aug 2, 2015
    #35

  6. XDM45 Vet Zone Founding Member

    Ken and Chris......Perhaps the point is that for most people, wrapping their financial life around debt and credit and a FICO score IS the path to ruin.....and that's who he's speaking to.

    But his overall point is sound.......I'd submit for the vast majority of people. If you're in that happy place where you have a paid-off house....no debt.....and lots of cash to the point where you have 6-months emergency.......a retirement account which will more than last you til you die with enough to leave your offspring.....and more than enough cash to pay for pretty much anything you could think of.........

    Then does a FICO score matter?

    And for most people, the revolving door of debt/credit means there's a constant outflow of cash going to OTHER people.......with not enough going to you so you can even get close to that happy place........

    I'll just accept that you 3 (Keith, Ken, Chris) can 'handle' credit....and are in financial 'happy' places. Most people aren't. And the way consumer advertising, spending, and government policies are set up is to keep the vast majority of people in debt. The credit industry is one of those 'favored few' interest groups benefiting from government and Fed policies. Some would say it utterly relies on it. I would agree.
     
    XDM45, Aug 2, 2015
    #36

  7. KW5413 Vet Zone Texas Chapter Founding Member

    Most states have laws that do not allow at the pump discounts for cash vs. credit.

    It is pretty much a known fact that most insured folks with a 400 FICO will pay higher insurance rates than an 800 FICO holder.

    Many must resort to sub-par housing / rent because while they may have the income, their credit rating can keep them out of homes they may even be able to afford from a cash flow stand point.

    With the 1% - 5% annual rebates I get with the cards I use I would venture to say that I get better pricing than cash buyers. Hell, my company cards gives me rebates plus a 5% discount up front from Fed Ex right of the top of all shipments including LTL...and their standard rates are very competitive...around here anyway.

    In regards to cars, I lease two of mine and get the best prices and the best rates...Plus, your taxes help subsidize my stylish rides. Thanks. :)

    Low to no score costs you money in many, many ways...and as noted, right or wrong, it can be the difference of getting a job...or not.

    For myself, The Queen, and my business, we have the highest...close to...credit ratings attainable. Even my youngest daughter has a high rating for her age and credit experience. We began establishing her credit when she turned 17.

    You don't have to have debt to establish a high FICO score. But, you typically do have to utilize your credit opportunities. The system can be very valuable to you if you manipulate it to YOUR advantage.
     
    KW5413, Aug 2, 2015
    #37

  8. FTZ HAIC Staff Member Oregon Chapter Founding Member

    As noted, I don't see much of it around here. One call to a credit card company about them can get their merchant account yanked out from under them if they continue. It was very common practice in the 1980s, until the credit card companies realized it was costing them business... so they put in policies that if you wanted to work with them you couldn't charge your customers more for credit cards.
    Statistically those with poorer credit scores are more likely to file claims, fraudulent claims, etc. Insurance companies have armies actuarial studies to reduce risk, they use FICO scores because it is a strong risk indicator. I don't see how that violating fair business-consumer practices any more than charging a 21 year old male more for auto insurance than a 50 year old male because the odds of him getting into an accident are much higher.
    There are also plenty of hard luck, down in the dumps, life is tough, fallout of a bad course in life....
    Had you talked to me 20 years ago it was a different picture. I went $60K into business debt in the very early days, some hard lessons learned there, but ultimately it turned my financial compass around.
     
    FTZ HAIC, Aug 2, 2015
    #38

  9. FTZ HAIC Staff Member Oregon Chapter Founding Member

    XDM45,

    I agree with Dave Ramsey's conclusions about credit, and poor choices....

    Living with debt is bad. Not putting away for a rainy day is bad. Not living within your means is bad. All sound advice.

    What I have a hard time with his Dave's recommendations for what some of the best choices are to reverse course....

    1. Paying a fee only financial adviser when you're not a larger dollar amount investor. That can immediately cut 5-7% of your money out from under you before it's even invested. If a person knows what they are doing.... get a Vanguard account and re-balance every 6 months based on market and age. If they don't don't know what they are doing, get a Fidelity or TD account, and ask them for advice, they will give sound advice for free, and those folks aren't working off commission targeting their small investors. Dave steers you in the direction he does because of his network of advisers... who he makes money from when you go to them!

    2. His advice that S&P index funds generally beat the S&P, wrong. They generally under-perform it.

    3. Planning on 8% withdrawal rate in retirement. You'll outlive your money 60% of the time. Plan for 4%, which is what most fiduciaries recommend, and you won't outlive your money 90+% of the time.

    4. Paying off the smallest debts first instead of the highest interest debts first. Depending on interest rates this path could lead to taking twice as long to pay it off.

    5. Getting completely off the grid when it comes to credit history. I already noted my opinions why. :)

    6. His advice that a Roth is better than taxing after retirement is wrong. If you're taxed at a 28% rate during your earning years, but in retirement are in a lower income bracket when you retire, you'll come out better with a traditional 401K or IRA. A Roth should not be a replacement for traditional 401Ks or IRAs. It should be in addition to them... as a hedge against tax rates skyrocketing you into higher brackets.

    A little self-promotion here... and I won't make a dime off it other than a few pennies here and there from ad views (the site actually loses money, lol):

    If you want to discuss money, saving, retirement planning, frugal living, etc. on a site that is not beholden to any method, sales pitches, someone's false motives of back end commissions (like Dave).... I invite you to visit https://www.crispymoney.com . It's an article repository and forum community of savers, people trying to turn their financial ship around, people who already are on sound ground, etc. Bad advice is generally called out there.
     
    Last edited: Jan 11, 2017
    FTZ HAIC, Aug 2, 2015
    #39

  10. XDM45 Vet Zone Founding Member

    NC ain't one of 'em........The difference is about .05-cents per gallon.......

    Hell....the truck stop places with the big flashing signs on the interstates FLASH both the cash and the credit prices.......right on their billboards.

    That sounds kind of like 'most everyone knows that........'.....

    My point stands. Insurance is pay-as-you-go. They're not GIVING you anything other than coverage you've already paid for. They're committing fraud so far as I'm concerned. Feeding frenzy business practices for sure.

    Almost no one has a 400 FICO score, Keith. Ditto on your 800 score. Most folks fall into the 575 to 775 range.

    But apparently what they're doing......and you and Ken seem Okey-Dokey with it......is charging a sliding scale rate based on a FICO score to which debt and credit do not apply........And FICO isn't even a good formula for that. So if client 'A' has a FICO of 550...and otherwise pays his premiums on time and has a good driving record....he should pay more than client 'B' with a FICO of 750 and the same driving record???

    That's fraud.

    (actually there's too many variables to compare. Different states have different rates. Not everything folks have covered are worth the same.......etc., etc.....number of vehicles and persons on a policy....etc., etc......)

    Frankly I don't see how one can really gauge if anyone's paying more premium based on FICO. You'd have to compare two identical clients.
     
    XDM45, Aug 2, 2015
    #40

  11. XDM45 Vet Zone Founding Member

    That doesn't work for big stores. No way in Hell Visa or MC or any of the others would pull their merchant accounts from stores like Target, Wal-Mart, Best Buy, Amazon, etc........

    Because being under -25 IS a huge risk factor in driving, Ken. And you know it. And there's no 'scoring' involved. Your rates are higher until you turn 25 whether you're male or female, black or white or Hispanic or Asian. Short or tall. Whatever....doesn't matter. And 'age' and driving are directly correlary to 'experience' and driving.....which is a risk factor beyond argument. You can't point out the link between the FICO score and the stuff you put in your first sentence. Insurance companies have been around a lot longer than the FICO score, and again. It's there for debt-management only. It doesn't gauge anything else. Say it 10 times and write it on the chalkboard. They're using it as an excuse to jack up rates and make more money. Nothing more....nothing less. They're vampires, and they're acting fraudulently.

    OK. Point. Does your FICO score go down if you file claims? Does it?????? If it's a relevant factor, it should. Now an insurance company may (probably will) jack up your rates based on number of filings you make....especially fraudulent ones.....(actually they'll just kick you out as a client if you do that.....). But that's separate from a FICO score.
     
    XDM45, Aug 2, 2015
    #41

  12. XDM45 Vet Zone Founding Member

    Bottom line. Using a score like FICO....which isn't even a good indicator of debt/credit....and is NO indicator whatsoever of financial health.......to assess things like accident risk......is both wrong and fraudulent. ESPECIALLY for companies who are NOT granting credit. That's bulls--t....and you guys all know it.

    (In case you're wondering.......my premiums are fine.......I just think it's wrong. And riggers was going through this crap a few months ago and mentioned it.......)
     
    XDM45, Aug 2, 2015
    #42

  13. FTZ HAIC Staff Member Oregon Chapter Founding Member

    I've never had any of those merchants charge me more to use a credit card.
    Bankruptcies, being unable to pay bills on time, etc. are also huge risks when it comes to the likelihood of filing fraudulent claims.
    With a lower score, your rates are higher whether you're male or female, black or white or Hispanic or Asian. Short or tall. Whatever....doesn't matter.
    And lower scores are directly correlated to increased risk of fraudulent claims.... which is a risk factor beyond argument.
    Yes, I can. Fair Isaac, the company that calculates FICO for the credit companies, also provides insurance companies with insurance risk scores. FICO is part of that risk model score, as is CLUE report data. (A CLUE report is your insurance company claim history.)

    Before computers made more data widely available, insurance companies had a handful of risk categories you could be in. Now it can be dozens. This lowers premiums for some, raises premiums for others based on risk profile... as it should be. That's not fraud.
    Consumers also benefit when insurance company try to reduce fraudulent claims.
    Where's the fraud? If anything, it's there to help reduce fraud. Vampires? Perhaps, I don't know, I've never followed their nocturnal feeding habits. :)
    Your insurance score goes down, which includes your FICO score as a factor.
     
    FTZ HAIC, Aug 2, 2015
    #43

  14. KW5413 Vet Zone Texas Chapter Founding Member

    OK. The 575 will pay a higher insurance rate than the 775. As part of the actuary analyst.

    Explaining how the system works doesn't endorse the system. Maybe you should change careers and start your own insurance business. Effect change. "Protect And Serve" the unfairly insured. Might even win the Nobel-Peace Prize. I would be Okey-Dokey with that. Hell, Obama got it for less.


    You are a cop. Arrest 'em. You seem to have the goods on them. 10-4 Good Buddy? :)

     
    KW5413, Aug 2, 2015
    #44

  15. FTZ HAIC Staff Member Oregon Chapter Founding Member

    Just read some interesting information from a Federal Trade Commission study. Among their findings (emphasis is mine):
    • Scores effectively predict the number of claims consumers file and the total cost of those claims. Their use is likely to make the price of insurance better match the risk of loss that consumers pose. Thus, on average, as a result of the use of scores, higher-risk consumers pay higher premiums and lower-risk consumers pay lower premiums.
    • Use of scores may result in benefits for consumers. For example, scores permit insurers to evaluate risk with greater accuracy, which may make them more willing to offer insurance to higher-risk consumers for whom they otherwise would not be able to determine an appropriate premium. Scores also may allow insurers to grant and price coverage more efficiently, producing cost savings that could result in lower premiums. Little empirical data was submitted or available to the FTC that would allow the agency to quantify the magnitude of these benefits.
    https://www.ftc.gov/news-events/pre...-report-effects-credit-based-insurance-scores

    Interestingly, many private studies, those done by learning institutions and state studies.... pretty much back up the effectiveness of credit based scoring. Progress Insurance, their own data shows those with the lowest scores are twice as likely to file as claim as those with the highest. That's a huge correlation. Lowest scoring group... double the risk!
     
    FTZ HAIC, Aug 3, 2015
    #45
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