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Norman Bernstein
08-04-2016, 08:28 AM
I've always been intrigued at how one's FICO credit score is calculated. The formula isn't published, and sometimes, the effect of various actions on one's credit score seems to run counter to intuition.

I use www.creditkarma.com to check my credit score occasionally... it reports scores from TransUnion and Equifax.

The site has an interesting features: it's a 'what if' calculator to show the expected effect on one's credit score if various actions are taken. For example, you can see what happens if you obtain a new credit card with a credit limit that you can specify... or what happens if you close a line of credit.

I tried this earlier, just for a laugh.

I proposed getting a new credit card, with a $25,000 credit limit... and the site reported that it would lower my credit score by a measly 0.3%... but said that the 'hit' on my credit score would evaporate in from 3-18 months, and in the long run, it would actually increase my score!

Similarly, I looked to see what would happen if I closed my oldest credit card. In reality, I apparently have a Gulf Oil credit card which I haven't used in over 30 years.... don't even remember it... but it's still listed as an active line of credit on my report, with a balance of $0 for the last 30 years... and the simulator reports that it would also drop my credit score by 0.3%, if I closed it... because it would change the average age of my credit history!

I don't have any basis to criticize these behaviors, since I'm sure that the credit agencies, with vast amounts of data and experience, know what happens, on average, when people do these things. It just struck me that the results of the simulations are counter-intuitive. I would have thought that getting an additional $25,000 of credit would have a more serious negative impact on the score. I also thought that eliminating some of my credit would improve the score, as well.

TomZ
08-04-2016, 09:06 AM
I once had a card stolen at the beach (daughers copy) since I had all the numbers backed up with info, within minutes I was able to contact the credit card company and put a 'hold' on it.

Seemed to have a positive effect.

Lew Barrett
08-04-2016, 09:41 AM
Fair question though. The system is opaque to normal logic.

Norman Bernstein
08-04-2016, 09:46 AM
Fair question though. The system is opaque to normal logic.

I don't think that it means that the systems isn't logical. The Credit ratings agencies create their score policies based on a VAST amount of data, and I have no reason to think that there isn't logic supported by strong evidence, in the way they score credit.

If they were doing a bad job of it, the banks... especially the large banks, with millions of credit card holding customers, would see a significant disconnect in what they see among their customers, as opposed to what the credit rating agencies report.

Bobcat
08-04-2016, 09:53 AM
This is a sore point at my house currently. My Canadian wife, with excellent credit, can't get a US credit card because the powers that be will not look to anything outside the border.

Tom Wilkinson
08-04-2016, 10:11 AM
I've always been intrigued at how one's FICO credit score is calculated. The formula isn't published, and sometimes, the effect of various actions on one's credit score seems to run counter to intuition.

I use www.creditkarma.com to check my credit score occasionally... it reports scores from TransUnion and Equifax.

The site has an interesting features: it's a 'what if' calculator to show the expected effect on one's credit score if various actions are taken. For example, you can see what happens if you obtain a new credit card with a credit limit that you can specify... or what happens if you close a line of credit.

I tried this earlier, just for a laugh.

I proposed getting a new credit card, with a $25,000 credit limit... and the site reported that it would lower my credit score by a measly 0.3%... but said that the 'hit' on my credit score would evaporate in from 3-18 months, and in the long run, it would actually increase my score!

Similarly, I looked to see what would happen if I closed my oldest credit card. In reality, I apparently have a Gulf Oil credit card which I haven't used in over 30 years.... don't even remember it... but it's still listed as an active line of credit on my report, with a balance of $0 for the last 30 years... and the simulator reports that it would also drop my credit score by 0.3%, if I closed it... because it would change the average age of my credit history!

I don't have any basis to criticize these behaviors, since I'm sure that the credit agencies, with vast amounts of data and experience, know what happens, on average, when people do these things. It just struck me that the results of the simulations are counter-intuitive. I would have thought that getting an additional $25,000 of credit would have a more serious negative impact on the score. I also thought that eliminating some of my credit would improve the score, as well.
It makes complete sense if you look at it from credit utilization standpoint. If you max that card out, it will then lower your score. If you add a large amount of available credit but don't use it then your utilization ratio improves. Max that card out, utilization goes down along with score. It all has to do with how well you can manage credit.

Gerarddm
08-04-2016, 10:15 AM
I just closed my Amex card because the only place I used it was Costco, and they ceased their relationship.

I doubt very much that I will ever charge a large ticket purchase on credit again or buy another home, so what my credit score is becomes rather moot. Basically these days you only need one card, Visa.

Norman Bernstein
08-04-2016, 10:16 AM
It makes complete sense unless you max that card out, which will then lower your score. If you add a large amount of available credit but don't use it then your utilization ratio improves..

...but it would seem that your 'risk' would increase, as well... the possibility that you could max out your debt suddenly.

I don't argue with your logic, of course... it's certainly true that low utilization would indicate someone who manages credit appropriately.

Hugh Conway
08-04-2016, 10:19 AM
Fair question though. The system is opaque to normal logic.

It's not opaque to normal logic at all. It just doesn't measure what most people (including those in this thread) seem to think it does - consumer virtue. It measures the business marketability of you as a consumer object e.g. how likely will the debt issuer make a profit.

Norman Bernstein
08-04-2016, 10:21 AM
It's not opaque to normal logic at all. It just doesn't measure what most people (including those in this thread) seem to think it does - consumer virtue. It measures the business marketability of you as a consumer object e.g. how likely will the debt issuer make a profit.

I agree.... 'virtue' has nothing to do with it... it's all about profitability.

Hugh Conway
08-04-2016, 10:22 AM
I agree.... 'virtue' has nothing to do with it... it's all about profitability.

Yes. And remember your mortgage is likely securitized and sold off post haste. So what matters is the risk calculation at origination (X mortgages at Y risk). So


...but it would seem that your 'risk' would increase, as well... the possibility that you could max out your debt suddenly.

wouldn't matter because you are calculating debt outstanding at the moment, not total potential debt (that's more math, finance types don't like math) or potential servicing, etc. etc. Producing "long term employment stability" documentation shouldn't matter if it's long term employment in an industry that's dying, but it'd likely be fine for the box checkers.

Norman Bernstein
08-04-2016, 10:27 AM
wouldn't matter because you are calculating debt outstanding at the moment, not total potential debt (that's more math, finance types don't like math)

I'm not saying the credit rating agencies are wrong... it just would SEEM that having approved access to a very large amount of unsecured credit would represent a risk. It's not especially difficult for someone with reasonably good credit, to manage to get enough credit cards to accumulate well over $100K in unsecured credit.

Just a few weeks ago, when Costco switched from Amex, to Visa, we received a credit card that we did not ask for or apply for, with a $25,000 credit limit. I was quite surprised at this... and more than a little pissed at the fact that we didn't ask for it... but according to creditkarma.com, it would barely affect our credit score, and might actually end up improving it (although I don't know how that would be possible, we're already within a small number of points from the very top end of the scale).

Too Little Time
08-04-2016, 10:52 AM
I'm not saying the credit rating agencies are wrong... it just would SEEM that having approved access to a very large amount of unsecured credit would represent a risk. It's not especially difficult for someone with reasonably good credit, to manage to get enough credit cards to accumulate well over $100K in unsecured credit.
Credit Karma thinks getting another credit card would improve our stellar FICO score. We already have over $100K in available credit card credit. Business cards - that we use for most of our purchases, don't count toward your FICO score.

But I don't worry about my credit score or how it is calculated. My wife can buy whatever she wants.

pkrone
08-04-2016, 10:56 AM
The last time we re-financed our house our credit scores were run. My wife's and my scores were really good, but mine was actually higher. I asked why as we've been together for years and it would seem we'd have a more similar score. I was told it was because of an AMEX card I've had for 25 years and have used fairly regularly.

Norman Bernstein
08-04-2016, 10:57 AM
The last time we re-financed our house our credit scores were run. My wife's and my scores were really good, but mine was actually higher. I asked why as we've been together for years and it would seem we'd have a more similar score. I was told it was because of an AMEX card I've had for 25 years and have used fairly regularly.

I see a spread of 10-15 points between TransUnion and Equifax, on my score... unsure as to why, although it really doesn't matter much. I thought the scores were computed with the same set of rules, but evidently, there are small differences.

Lew Barrett
08-04-2016, 11:02 AM
It makes complete sense if you look at it from credit utilization standpoint. If you max that card out, it will then lower your score. If you add a large amount of available credit but don't use it then your utilization ratio improves. Max that card out, utilization goes down along with score. It all has to do with how well you can manage credit.

Look at it this way. All my cards pay me to use them. I get either miles or cash back. Therefore I run a high balance that I pay off every moth instead of using checks. That stands against the score depending on when they pull a profile. They don't distinguish between a high balance paid in full monthly and just a high balance, yet my practice makes the best business sense. There are other such holes in their reporting system.

The system is set up to report on the practices of the average user not the clever one.

Lew Barrett
08-04-2016, 11:04 AM
I don't think that it means that the systems isn't logical.

Hugh makes the point well enough. It corresponds to their logic, not necessarily a straight line to who is using the system intelligently. And as you note, scores vary according to who is reporting. Closing a card is a ding. Opening a card is a ding. How do either of these actions predict the actual payment of a debt? I think they make a lot of assumptions, but that the system is replete with holes that don't account for other aspects of credit worthiness.

I have never been denied a loan, our scores are enviable. I don't have any issues that impair my ability to borrow money, even large sums, but then again, I don't borrow unless the cost of money is less than its time value to me. I wouldn't suggest the system is rigged....and if it is it is rigged in my favor....but in my opinion it is not the product of a completely logical program. Take the credit default swaps of 2007 for instance.....:D. who was guarding the farm then? What has changed in the reporting practices (not the tightening of credit per se, but the reporting practices) since ten years ago?

Posed as an honest question, not as a gotcha....

Hugh Conway
08-04-2016, 11:36 AM
I'm not saying the credit rating agencies are wrong... it just would SEEM that having approved access to a very large amount of unsecured credit would represent a risk. It's not especially difficult for someone with reasonably good credit, to manage to get enough credit cards to accumulate well over $100K in unsecured credit.

But everyone else thinks you make a great risk, so there's safety in group think.

Another "non-logical" bit - the credit card company's want people to carry balances and not pay them off. E.G. I think the CapitalOne CEO said their ideal customer is one who recently declared bankruptcy - likely to build up a balance soon and carry it.

Tom Wilkinson
08-04-2016, 05:09 PM
Look at it this way. All my cards pay me to use them. I get either miles or cash back. Therefore I run a high balance that I pay off every moth instead of using checks. That stands against the score depending on when they pull a profile. They don't distinguish between a high balance paid in full monthly and just a high balance, yet my practice makes the best business sense. There are other such holes in their reporting system.

The system is set up to report on the practices of the average user not the clever one.

I do exactly the same, but they do look at the amount of credit available vs the amount used. If your utilization is too high it will ding your credit. I'd guess the amount of credit you have vs what you actually us is a pretty wide gap. I know mine is.

Garret
08-04-2016, 05:42 PM
They do seem obscure. I get dinged for having too few CC's.

Also note that each check of your score is held against you. Checking it daily or some such will lower your score.

Nicholas Carey
08-04-2016, 08:05 PM
Bear in mind that what credit card companies want is different than what somebody issuing a secured loan is looking for. Both parties want to avoid people who won't/can't pay them back. The Platonic ideal of a credit card customer is somebody who carries hefty balances and makes on-time, minimum payments. As far the credit card company is concerned, they are an annuity.

Norman Bernstein
08-04-2016, 08:12 PM
They do seem obscure. I get dinged for having too few CC's.

Also note that each check of your score is held against you. Checking it daily or some such will lower your score.

Not true.... soft inquiries do NOT affect your credit score, only 'hard' inquiries.

Garret
08-04-2016, 08:17 PM
Not true.... soft inquiries do NOT affect your credit score, only 'hard' inquiries.

I sit corrected - thanks.

Norman Bernstein
08-04-2016, 08:21 PM
I sit corrected - thanks.

No problem.

A 'hard' inquiry might occur if you apply for a mortgage, or undergo a background check.... but the kind of inquiries that are done by Creditkarma and others are 'soft inquiries', which are innocuous.

Gerarddm
08-05-2016, 09:59 AM
I do what Lew does: charge everything to run up airline miles, pay off in full at the end of each month.

wudzgud
08-05-2016, 04:28 PM
My credit score is "0"....

Tom Wilkinson
08-05-2016, 05:14 PM
My credit score is "0"....

I doubt that, but if you say so. Not sure why you would want that though.

wudzgud
08-05-2016, 05:22 PM
I doubt that.
Why?

Lew Barrett
08-05-2016, 05:40 PM
Because regardless if you have good credit, no credit or no ability to borrow, you have a score. You are scored based on if you own a home, if you have prior credit history or don't, if you have gone to school and who knows what other variables. You have a score regardless if you have "credit" or not. If you can fog a mirror, they are watching you!

wudzgud
08-05-2016, 06:20 PM
Because regardless if you have good credit, no credit or no ability to borrow, you have a score. You are scored based on if you own a home, if you have prior credit history or don't, if you have gone to school and who knows what other variables. You have a score regardless if you have "credit" or not. If you can fog a mirror, they are watching you!
And you are full of sheep dip. I've never borrowed a dime in my life. I know simple may be hard for you to comprehend but, no credit=no credit score. I know you guys like to read a bunch of crap into simple concepts but the operative word here is "credit"

peb
08-05-2016, 06:28 PM
I dont do debt. I have no idea what my credit score is. Dont really care.

Reynard38
08-05-2016, 06:32 PM
Unless you've been living under a rock, don't have a SS #, and pay for everything with cash you've got a score. It'll be somewhere between 350 and 850.

And a good score isn't just handy for borrowing $$. Many employers look at credit scores as part of hiring criteria.

Of course if you are living under a rock, or are a Texas millionaire this won't be an issue. |;)

Lew Barrett
08-05-2016, 06:39 PM
And you are full of sheep dip. I've never borrowed a dime in my life. I know simple may be hard for you to comprehend but, no credit=no credit score. I know you guys like to read a bunch of crap into simple concepts but the operative word here is "credit"

Nice! See #32 for a simple explanation. If you have a job, an address, an SS number and pay taxes, you have a credit score. That you have no credit speaks to another issue, but that you have no credit score suggests only that you can't fog a mirror, a notion I am prepared to believe at this point. That you have no credit, as opposed to a credit score, means only that they won't loan you money. How do they decide? By your credit score.:D Don't worry though. Trump is in your boat. He can't get a loan from any major US banks either.

Sometinmes the simplest people demand the simplest solution. At others, the simplest people are just simple.

Tom Wilkinson
08-05-2016, 06:50 PM
I dont do debt. I have no idea what my credit score is. Dont really care.

Credit score can affect more than just the ability to borrow, it can affect insurance rates as well. I don't do debt other than a mortgage either, but I do make sure my credit is good, never know when I may need it.

wudzgud
08-05-2016, 07:11 PM
Call your banker, ask him if a 0 credit score is possible. After he tells you, hang your head in shame then go try to impress somebody else with your brilliance...

Too Little Time
08-05-2016, 07:17 PM
Unless you've been living under a rock, don't have a SS #, and pay for everything with cash you've got a score. It'll be somewhere between 350 and 850.

There are at least 64 million "unscoreable" consumers out there, estimates Experian,

FICO, the most commonly used score by lenders, still only scores people who have had active accounts within the past six months.
I learn so much from people here.

Lew Barrett
08-05-2016, 07:18 PM
If you've got a zero, it is your score. A terrible one, but it's your score.

Lew Barrett
08-05-2016, 07:21 PM
I learn so much from people here.

You do know who "unscoreable" people are don't you? Possibly Wudzgud or somebody who lives in a cardboard box or is a non person without any means of support, no address, a minor child, or institutionalized. Anybody with a home, a job, and an SS# and a bank account has a credit score. They could be zeros, but they have a score. If you live below the radar, that's another story. It can be very, very difficult to get much done without a credit score unless you are Donald Trump or swimming in cash. I don't need credit but because of that, I have it. The "unscoreables" are another story entirely.

I learn so much from you here!

Todd D
08-05-2016, 07:54 PM
I find the concern about credit scores interesting. I moved out of the US before they were in use. Since I returned in 2000 I haven't borrowed any money. I do have a credit card but only use it when I travel, which I last did in 2011. I also haven't had a job since moving back to the states. I have no idea what my score might be and, like PEB, don't care since I have no intention of getting a loan.

Too Little Time
08-05-2016, 09:28 PM
You do know who "unscoreable" people are don't you? Possibly Wudzgud or somebody who lives in a cardboard box or is a non person without any means of support, no address, a minor child, or institutionalized. Anybody with a home, a job, and an SS# and a bank account has a credit score. They could be zeros, but they have a score. If you live below the radar, that's another story. It can be very, very difficult to get much done without a credit score unless you are Donald Trump or swimming in cash. I don't need credit but because of that, I have it. The "unscoreables" are another story entirely.

I learn so much from you here!
http://www.experian.com/blogs/ask-experian/it-is-possible-to-not-have-a-credit-report/

Glad to help you learn. If I could only teach people how to Google.

Lew Barrett
08-06-2016, 12:34 AM
http://www.experian.com/blogs/ask-experian/it-is-possible-to-not-have-a-credit-report/

Glad to help you learn. If I could only teach people how to Google.

It's possible but as has been said by me and others, you have to live under a rock. The only thing I've learned from you in your months here is just how pompous it is possible to be while others discount the vast quantity of one's input.

[QUOTE=Lew Barrett;4970152] Anybody with a home, a job, and an SS# and a bank account has a credit score. They could be zeros, but they have a score. If you live below the radar, that's another story.

Tom Wilkinson
08-06-2016, 06:11 AM
How do you go about renting cars, hotels, airline reservations etc with no credit? It must be a PIA, or you just don't travel. I can't imagine carry enough cash around daily for even gas, groceries and misc stuff, plus I make a little money on every transaction using credit cards.

Norman Bernstein
08-06-2016, 08:15 AM
Call your banker, ask him if a 0 credit score is possible. After he tells you, hang your head in shame then go try to impress somebody else with your brilliance...

Actually, it's impossible.

Let's presume that you have NEVER borrowed any money in your entire life... no mortgage, no credit cards, etc... and not only that, but you've never had cable TV or internet service in your own name, or any other service which is billed in arrears (i.e., you are billed at the end of the month for service in the previous month).

It's pretty hard to conceive of that being even remotely possible, unless you live in a self-constructed cabin in the wilderness, and you're logging into the WBF from a PC in a public library.... but I suppose it's possible.

In that case, then yes, you have no score.... but the score isn't '0', because FICO scores range from 300 to 850. The credit agencies MIGHT not even have you in a database, because their database is indexed by social security number... but if you ever gave your social security number for anything other than something like a driver's license, then it's undoubtedly on file somewhere in a non-governmental database.

Maybe some people think it's somehow 'chic' to claim that they use no credit whatsoever. I'm not the least bit impressed. Having good credit is, IMHO, a good thing.... even if you incur VERY little debt. The ability to draw from credit in the event of an emergency is something that helps you and your family... unless, of course, you're filthy rich, so rich that there is NO conceivable emergency situation in which you'd need to raise substantial funds.

It doesn't have to be credit cards, either... I don't touch my retirement funds, EVER, but if I had such an emergency, I could write a check for up to half the value of my taxable account, and have those funds in a matter of minutes. If that weren't enough, I could tap into my IRA's, for ten times as much. God willing, it will never be necessary... but anyone who thinks they're immune to such a situation is an idiot. Bad things DO happen to good people.

Too Little Time
08-06-2016, 08:29 AM
It's possible but as has been said by me and others, you have to live under a rock. The only thing I've learned from you in your months here is just how pompous it is possible to be while others discount the vast quantity of one's input.
I am sure you know more about credit scores than I do. You even know more than Experian.

Lew Barrett
08-06-2016, 10:20 AM
I am sure you know more about credit scores than I do. You even know more than Experian.

The exchange of information here is just that: an exchange of information. You frequently do it with a lot of snark. You get responded to in kind when you opt for that route. I'll say it again: any person living a relatively normal life in this country, that is someone with a home (rented and especially mortgaged), a job, a checking account and any sort of existence beyond subsistence is going to have a credit score. People living on the edge or under the radar may not, may not pay taxes and may not even be visible. If they're homeless, a minor child, have never rented a car or paid bills with a checking account, then perhaps they may not register, but then again, they are probably not getting mail at home and may not even have a home, are likely without a lease in their name and certainly do not have a mortgage. They are far less likely to be getting a regular paycheck and almost certainly are keeping whatever they do have in a sock under their sleeping bag. They don't take airplanes anywhere, likely don't get out much. Not that there is anything wrong with that, but they probably aren't posting to this forum either.

We all know how successful and rich you are and what a bright fellow you are, and that's because you're always telling us. And that's all anybody here could know about what you know and who you are.

I have no idea what you do or don't know about Experian but you have amply and frequently demonstrated how much and how highly you value your own opinion and even more, your worth and the success you report here daily. Sometimes I think you even get things right. And that's what I think you know about Experian and just about everything else.

Too Little Time
08-06-2016, 11:20 AM
I have no idea what you do or don't know about Experian but you have amply and frequently demonstrated how much and how highly you value your own opinion.
Experian is one of the 3 providers of credit scores. I guess I gave you too much credit.

I expect everyone here likes their opinions.

I think it is important for people who talk about economics to be open about their economic position. So I am.

Added the following while watching the Olympic cycling road race:

http://www.cnbc.com/2015/05/05/credit-invisible-26-million-have-no-credit-score.html
http://files.consumerfinance.gov/f/201505_cfpb_data-point-credit-invisibles.pdf


The research found that about 26 million American adults have no histories with national credit reporting agencies such as Equifax, Experian and TransUnion. In addition to those so-called credit invisibles, an additional 19 million have credit reports that are so limited or out of date that they are unscorable. In other words, 45 million American consumers are living without credit scores.

wudzgud
08-06-2016, 01:25 PM
If you've got a zero, it is your score. A terrible one, but it's your score.
If I could split a hair that thin, I could knit a boat cover out of my eyebrows...

brad9798
08-07-2016, 08:27 AM
The real trick is the rhyme or reason underwriters use to determine approvals and rate/term on a new loan ... THAT'S the goofy, subjective part.

Lew Barrett
08-07-2016, 09:12 AM
Experian is one of the 3 providers of credit scores. I guess I gave you too much credit.......

Now it seems there are four credit rating agencies. TransUnion, Equifax, Experian and Too Little Time. Thanks for the credit, you granted me, even if only temporarily.

May I add to the list of your qualifications that you are a master of the obvious?


I expect everyone here likes their opinions

You know what they say about opinions;)


I think it is important for people who talk about economics to be open about their economic position. So I am.

It's pretty much all we know about you. How successful you are. The rest of your situation is featureless and somewhat bland. If all we know of a person is that they consider themselves a success, and if we are constantly reminded of that, they are a singularity without dimension or color. All they are is an opinion on an internet forum.

Too Little Time
08-07-2016, 09:56 AM
It's pretty much all we know about you. How successful you are. The rest of your situation is featureless and somewhat bland. If all we know of a person is that they consider themselves a success, and if we are constantly reminded of that, they are a singularity without dimension or color. All they are is an opinion on an internet forum.
I never said I was a success. Recently I said I am a poor investor but by chance I do a bit better than the guaranteed returns idiots get investing in funds that track the major indexes. I have even said that we - my wife and I; a couple college graduates, have earned less than half of the median for a couple of college graduates. Far from an economic success.

I do seem to know how to use the internet. That is a big step up from most of the posters here.

Too Little Time
08-07-2016, 10:02 AM
It's pretty much all we know about you. How successful you are. The rest of your situation is featureless and somewhat bland. If all we know of a person is that they consider themselves a success, and if we are constantly reminded of that, they are a singularity without dimension or color. All they are is an opinion on an internet forum.
I never said I was a success. Recently I said I am a poor investor but by chance I do a bit better than the guaranteed returns idiots get investing in funds that track the major indexes. I have even said that we - my wife and I; a couple college graduates, have earned less than half of the median for a couple of college graduates. Far from an economic success.

If you want to learn more about me, that seems to be your problem. Don't make it mine. I think I have posted a bit about my family. I have posted about economics - mostly to point out how wrong others are. I have posted about politics.

But mostly I post to help people. Like when I had to point out to you that Experian is one of the credit reporting agencies. You seem to have learned something from that.

I do seem to know how to use the internet. That is a big step up from most of the posters here.

Dave Wright
08-07-2016, 10:16 AM
I never said I was a success...

Well you might be. Tell us about your boat. I give extra points for owner built boats, even if thet're sh!tty ones, and I don't laugh at little ones. So, we're waiting.|;)

Too Little Time
08-07-2016, 10:33 AM
Well you might be. Tell us about your boat. I give extra points for owner built boats, even if thet're sh!tty ones, and I don't laugh at little ones. So, we're waiting.|;)
I do have a canoe. From time to time I go into the ocean and paddle it about.

Dave Wright
08-07-2016, 10:56 AM
I do have a canoe. From time to time I go into the ocean and paddle it about.

There you go, there's some success in that.

Norman Bernstein
08-07-2016, 11:23 AM
. Recently I said I am a poor investor but by chance I do a bit better than the guaranteed returns idiots get investing in funds that track the major indexes.


Hmmm... since 1/1/09, the S&P500 has returned just about 15%, compounded annually.... so we're all going to presume that you must be a market genius, because 80% of managed mutual funds don't do that well., and to hear you tell it, anyone who hasn't beaten 15% annually is an 'idiot'....

Of course, it's only you who knows the secret of that "$50K to $100K of tax free income" that you bragged about, but refuse to explain... so you MUST be a financial genius.

Do we need to genuflect... or would a simple bow at the waist be sufficient?

I don't believe a single word of anything you've said.

Too Little Time
08-07-2016, 07:14 PM
Hmmm... since 1/1/09, the S&P500 has returned just about 15%, compounded annually.... so we're all going to presume that you must be a market genius, because 80% of managed mutual funds don't do that well., and to hear you tell it, anyone who hasn't beaten 15% annually is an 'idiot'....
Most funds don't track the S&P 500. Anyone who invests in a S&P 500 tracking fund should have gotten pretty close to that 15%. Timing would of course alter the actual number. As would management fees. Even an idiot can do as well as the S&P 500.

Funds tend to have a common investor problem. Their clients tend to buy high and sell low. They panic. This costs the investors several percent a year. It even costs those who do not buy and sell. ETFs tend to do better. One can always check the premium being paid on either end.

I don't attempt to track the S&P 500, so I don't do the same as the S&P 500. I did post some links that gave 5 and 10 year performance of stocks. It is reasonable to believe that people who bought those stocks did better than the S&P 500. (You can do a search for "best 5 year stock returns" or something like that.)

What is this about you that leads you to believe that average (or median) is the best one can do.

Lew Barrett
08-07-2016, 07:33 PM
TLT, I'm responding in the hope that we can return to a respectful relationship wherein we discuss the issues and not the people who posit them. I can bear disagreement and even being wrong, which happens more than I'd wish to admit but I prefer not to be needled and really would prefer not to be a wise guy as well. I'm moving on.

It makes no difference in my world if some people have a credit rating or not. I have one and it allows me some access when I opt to use it. Credit is like everything else. It's a useful tool if you use it properly and will cut off your fingers if you don't. The reporting schemes are opaque and will confuse many people. The schemes are based on criteria that in many cases have little meaning in respect to how worthy of financial trust many folks might be. And it's my observation that credit is most available to those people who probably least need it. The weaknesses of the system were amply demonstrated in the collapse of 2008 and the punk use of credit/default swaps and bundling, excesses that in my opinion have not bee adequately addressed to this day.

Of course, we have left the greatest "credit" shysters and reporting misfits entirely out of this conversation. Take Standard and Poors for instance.

Too Little Time
08-08-2016, 12:42 AM
The schemes are based on criteria that in many cases have little meaning in respect to how worthy of financial trust many folks might be. And it's my observation that credit is most available to those people who probably least need it.
I will agree on both points.

Credit scores do seem to be based on correlation rather than causation. That is good enough for the lenders, not so good for borrowers who do not fit the model. It has always been easier to borrow when one does not need the money.

It is perhaps worthwhile to make the observation that prior to 2008 people who did not merit loans were given loans. And that did not turn out well.

If I were going to attempt a solution to credit problems, I would work bottom up: Help those at the bottom first. Rather than make some claim that helping those in the middle will trickle down to those at the bottom.

Norman Bernstein
08-08-2016, 07:34 AM
Even an idiot can do as well as the S&P 500.

Until you tell us about the "$50K to $100K of tax free income as a result of Obama's budget deal" that you bragged about over a year ago, I'm going to continue to believe that you're spouting unsupportable nonsense and endless bragging.

Too Little Time
08-08-2016, 09:29 AM
Until you tell us about the "$50K to $100K of tax free income as a result of Obama's budget deal" that you bragged about over a year ago, I'm going to continue to believe that you're spouting unsupportable nonsense and endless bragging.
You set such a low standard for yourself.