topic FICO Score Breakdown (i.e., "Credit Mix") in Understanding FICO® Scoring

FICO Score Breakdown (i.e., "Credit Mix")

tb_purchasesonline — Tue, 11 Dec 2012 12:38:03 GMT

Overall, I'm very satisfied w/ my FICO score (817 as of today).

Based on existing literature, I know how the FICO score breaks down (i.e., 35% Payment History, 30% Amounts Owed, 15% Length of Credit History, 10% New Credit, 10% Types of Credit or "Other").

My question is pertaining the 10% of "Credit Mix". Based on my most recent credit report, I score "Excellent" on all categories but only "Fair" on the credit mix.

From my perspective (and I think it's somewhat reflected in my high score), I have a good credit mix. That is, I have the following type of credit account:

- 2 mortgage accounts (mortgage and home equity) -- approximately 90% of my debt

- 2 installment accounts (car loans) -- approximately 9% of my debt

- 10 credit cards (only 1 card with a balance) -- approximately 1% of my debt

Based on the information above, is there anything obvious that "sticks out" as to why the "credit mix" is considered only "fair" (again, in contrast to all else being excellent)?

Thank you,

Tom

Re: FICO Score Breakdown (i.e., "Credit Mix")

nois — Tue, 11 Dec 2012 14:31:00 GMT

tb_purchasesonline wrote:
Overall, I'm very satisfied w/ my FICO score (817 as of today).

Based on existing literature, I know how the FICO score breaks down (i.e., 35% Payment History, 30% Amounts Owed, 15% Length of Credit History, 10% New Credit, 10% Types of Credit or "Other").

My question is pertaining the 10% of "Credit Mix".   Based on my most recent credit report, I score "Excellent" on all categories but only "Fair" on the credit mix.

From my perspective (and I think it's somewhat reflected in my high score), I have a good credit mix.   That is, I have the following type of credit account:
- 2 mortgage accounts (mortgage and home equity) -- approximately 90% of my debt
- 2 installment accounts (car loans) -- approximately 9% of my debt
- 10 credit cards (only 1 card with a balance) -- approximately 1% of my debt

Based on the information above, is there anything obvious that "sticks out" as to why the "credit mix" is considered only "fair" (again, in contrast to all else being excellent)?

Thank you,
Tom

FICO does score each of the categories in the percentages you mentioned above.

However, from your description of the report you're referring to, it sounds like you may have a non-FICO score because reports you get from myFICO.com do not grade your "Credit Mix" on a "Excellent, Fair, etc" basis. Those grades are used in other scoring model reports such as Vantage scores - but their score category wieghts (e.g. 10% for Types of Credit) may be different from the FICO model.

To get an accurate idea of what your FICO really is, you might consider getting your EQ or TU report from this site.

Re: FICO Score Breakdown (i.e., "Credit Mix")

tb_purchasesonline — Tue, 11 Dec 2012 14:36:27 GMT

nois:

Thanks for the feedback... I appreciate it.

All information is based on Equifax's online report.

Thanks,

Tom

Re: FICO Score Breakdown (i.e., "Credit Mix")

my-own-fico — Tue, 11 Dec 2012 14:36:34 GMT

Your score and your credit report are part of the same score report? I ask because I don't remember a myFICO report commenting on the credit mix. Did you get it from the Equifax web site? If so, is the score explicitly listed as a FICO score rather than a credit score?

Your credit mix certainly looks excellent to me. As you noted, its impact is small. And if the score is EQ FICO, it's unlikely to increase no matter what, as you have joined a handful of EQ 817 people who have hit the ceiling. Congratulations!

Re: FICO Score Breakdown (i.e., "Credit Mix")

Cdnewmanpac — Wed, 12 Dec 2012 19:26:07 GMT

Leaving aside the fako vs fico thing, there is one element missing from your mix: uncollateralized installment debt. Mortgages and auto loans are considered collateralized (or "secured", though that term freaks out people on this board) because if you default, there is a physical asset the lender can recover. Personal loans are considered uncollateralized or unsecured, because there is nothing to recover if you default. FICO does consider this a separate category. This past July, I took out a personal loan for some home renovation (not a home equity loan). Despite it being a new account, which would usually drop your score, my score went up by 15 points. Nothing else changed. I have no idea if the impact would be that big for someone already over 800, as I was in the 690s when I did it.

Re: FICO Score Breakdown (i.e., "Credit Mix")

Jutz — Thu, 13 Dec 2012 02:37:02 GMT

Cdnewmanpac wrote:
Leaving aside the fako vs fico thing, there is one element missing from your mix: uncollateralized installment debt. Mortgages and auto loans are considered collateralized (or "secured", though that term freaks out people on this board) because if you default, there is a physical asset the lender can recover. Personal loans are considered uncollateralized or unsecured, because there is nothing to recover if you default. FICO does consider this a separate category. This past July, I took out a personal loan for some home renovation (not a home equity loan). Despite it being a new account, which would usually drop your score, my score went up by 15 points. Nothing else changed. I have no idea if the impact would be that big for someone already over 800, as I was in the 690s when I did it.

Seriously? This may answer my question for what to do with my unsecured personal loan when I'm looking to apply for an auto loan in the spring. I planned to pay it off with taxes, but maybe I'll pay off all but a portion and milk it for a bit longer. That's really interesting

Re: FICO Score Breakdown (i.e., "Credit Mix")

GregB — Thu, 13 Dec 2012 03:33:32 GMT

Based upon the info in the original post, the score is NOT a FICO score. It is likely an Equifax score although it is possible to buy a real FICO score on the Equifax web site. Look at the report again and let us know.

FAKO advice is irrelvant to any score actually used by lenders.

Re: FICO Score Breakdown (i.e., "Credit Mix")

ccnewcc — Thu, 13 Dec 2012 05:59:23 GMT

Jutz wrote:
Cdnewmanpac wrote:
Leaving aside the fako vs fico thing, there is one element missing from your mix: uncollateralized installment debt. Mortgages and auto loans are considered collateralized (or "secured", though that term freaks out people on this board) because if you default, there is a physical asset the lender can recover. Personal loans are considered uncollateralized or unsecured, because there is nothing to recover if you default. FICO does consider this a separate category. This past July, I took out a personal loan for some home renovation (not a home equity loan). Despite it being a new account, which would usually drop your score, my score went up by 15 points. Nothing else changed. I have no idea if the impact would be that big for someone already over 800, as I was in the 690s when I did it.
Seriously? This may answer my question for what to do with my unsecured personal loan when I'm looking to apply for an auto loan in the spring. I planned to pay it off with taxes, but maybe I'll pay off all but a portion and milk it for a bit longer. That's really interesting

I'd bet that a more satisfying feeling would be to pay off your loan ;)

Re: FICO Score Breakdown (i.e., "Credit Mix")

tb_purchasesonline — Thu, 13 Dec 2012 11:44:42 GMT

Jutz -- good point. I had not considered that. I'll look into this credit option. Thanks!

Re: FICO Score Breakdown (i.e., "Credit Mix")

tb_purchasesonline — Thu, 13 Dec 2012 11:56:15 GMT

GregB -- I think you're right. Mine is called an Equifax Credit Score. However, it is somewhat consistent (+/- 2 points) with TransUnions and Experian's credit scores.

It's my understanding that lenders "look" at the 3 major credit bureaus. While MyFICO.com is a great site, I'm not sure if lenders would consider it a superceding site (in respect to the 3 credit bureaus). Am I right or wrong w/ this viewpoint? (latter is a serious questions... I'm not being facetious).

In the end, whether it's called "FICO score", "Beacon score", "Equifax Score" or else -- I'd like to make sure that I watch/monitor the score that's most authoritative. Besides, even if my Equifax score is not a true FICO score, I couldn't image there would be a huge difference as far as points is concerned.

Thoughts?

Re: FICO Score Breakdown (i.e., "Credit Mix")

nois — Thu, 13 Dec 2012 13:48:11 GMT

tb_purchasesonline wrote:
GregB -- I think you're right.   Mine is called an Equifax Credit Score.    However, it is somewhat consistent (+/- 2 points) with TransUnions and Experian's credit scores.

It's my understanding that lenders "look" at the 3 major credit bureaus.   While MyFICO.com is a great site, I'm not sure if lenders would consider it a superceding site (in respect to the 3 credit bureaus).    Am I right or wrong w/ this viewpoint?  (latter is a serious questions... I'm not being facetious).

In the end, whether it's called "FICO score", "Beacon score", "Equifax Score" or else -- I'd like to make sure that I watch/monitor the score that's most authoritative.    Besides, even if my Equifax score is not a true FICO score, I couldn't image there would be a huge difference as far as points is concerned.

Thoughts?

Lenders do look at the three major credit bureaus - they look at the reports of consumer credit history maintained by each bureau and each bureau can provide credit scores based on various "formulas". The one most lenders look at is the FICO formula. But the credit bureaus also offer scores based on other "formulas" and usually don't offer the FICO to private consumers - only to lenders.

We're not suggesting lenders come to myFICO.com to look at these scores... myFICO.com is simply one of the few sites that gives access to the FICO score.

There can be huge differences in scores generated from the same exact credit history depending on the formula used. Look at this thread.

You should also read this thread.

IME, before I went mortgage loan shopping, I checked my scores here and both lenders reported the exact same EQ FICO score as I got here.

Re: FICO Score Breakdown (i.e., "Credit Mix")

GregB — Thu, 13 Dec 2012 15:49:09 GMT

The information in the reports from each CRA is exactly what lenders see. It is the scores that are the problem. The "consumer" scores from each CRA are not used by any lenders of any kind. Equifax DOES offer the same EQ FICO (Beacon v5.0) that is available from myFICO, but it costs them more to provide it so they would really prefer you buy their consumer score.

Which score is used by lenders is easy ONLY if you are looking for a mortgage. Virtually all mortgage apps will use exactly the EQ FICO sold by myFICO and Equifax. They will also use the FICO 04 based scores from TU and EX. You can't get those. You can get a TU FICO from myFICO but it is one version earlier: FICO 98.

It gets more complicated on a loan app for a CC, Auto, or Installment Loan. Most lenders use a FICO but they can use lots of different FICO including Auto or CC enhanced scores. They may even add their own extra mods to a normal FICO. There are also CRA provided non-FICO scores but those are different than the consumer scores. There is a Vantage Score provided to lenders by all three CRAs that IS also provided to consumers but very, very few lenders use that score.

Re: FICO Score Breakdown (i.e., "Credit Mix")

tb_purchasesonline — Fri, 14 Dec 2012 00:23:24 GMT

nois, GregB:

Again, thank you for the additional feedback... 'very much appreciated.

As I have a monthly subscription with Equifax.com, I can obtain my Equifax score (and credit report) at any given time. The monthly fee is $14.95... which I gladly pay IOT to monitor my credit on a regular basis.

I apologize if you've already provided the information (and I've missed it)... does the myFICO.com provide access to only the score but not the report? Depending on the answer, I may pull my report from this site as well. At the same time, I certainly don't need two subscription and paying two services. In the end, watching my credit report is more important that obtaining a 100% accurate score. From my perspective, if I'm a good stewart of my finances, then a good score should be the natural result of any responsible behavior.

Thanks,

Tom

Re: FICO Score Breakdown (i.e., "Credit Mix")

nois — Fri, 14 Dec 2012 04:39:29 GMT

tb_purchasesonline wrote:
From my perspective, if I'm a good stewart of my finances, then a good score should be the natural result of any responsible behavior.

That's an excellent viewpoint... A lot of people focus too much on their score.

And yes myFICO.com does give you a report and score for both EQ and TU. You might really like the scorewatch subscription here.

Re: FICO Score Breakdown (i.e., "Credit Mix")

Swapmeet — Fri, 14 Dec 2012 08:23:12 GMT

tb_purchasesonline wrote:
nois, GregB:

Again, thank you for the additional feedback... 'very much appreciated.

As I have a monthly subscription with Equifax.com, I can obtain my Equifax score (and credit report) at any given time. The monthly fee is $14.95... which I gladly pay IOT to monitor my credit on a regular basis.

I apologize if you've already provided the information (and I've missed it)... does the myFICO.com provide access to only the score but not the report? Depending on the answer, I may pull my report from this site as well. At the same time, I certainly don't need two subscription and paying two services. In the end, watching my credit report is more important that obtaining a 100% accurate score. From my perspective, if I'm a good stewart of my finances, then a good score should be the natural result of any responsible behavior.

Thanks,
Tom

I have two subscriptions that I pay for -- the credit monitoring premium that usaa sells for 12 bucks, so I can monitor all 3 reports and any changes... and sw to see exactly what the lenders see and to monitor how the changes to my credit reports affect my fico score. And since I have a wal mart credit card, I get my TU fico score once a month. The ex fico is tough to get, but the credit monitoring premium subscription is run by EX. It is a fako score, but it is all i got. The score watch gives credit reports and fakos for all three CRA.

Re: FICO Score Breakdown (i.e., "Credit Mix")

GregB — Fri, 14 Dec 2012 12:33:02 GMT

tb_purchasesonline wrote:
nois, GregB:

Again, thank you for the additional feedback... 'very much appreciated.

As I have a monthly subscription with Equifax.com, I can obtain my Equifax score (and credit report) at any given time. The monthly fee is $14.95... which I gladly pay IOT to monitor my credit on a regular basis.

I apologize if you've already provided the information (and I've missed it)... does the myFICO.com provide access to only the score but not the report? Depending on the answer, I may pull my report from this site as well. At the same time, I certainly don't need two subscription and paying two services. In the end, watching my credit report is more important that obtaining a 100% accurate score. From my perspective, if I'm a good stewart of my finances, then a good score should be the natural result of any responsible behavior.

Thanks,
Tom

Scorewatch from myFICO or a full EQ FICO report with score are also available from EQ if you are careful to order that specific product. It is much easier to order here as they aren't trying to sell you products with useless scores. Scorewatch gives you two complete reports per year and updates to accounts and score changes that meet certain parameters that generate an alert. An account going UP will trigger an alert but one going down won't. If you want to keep track of all the info in your reports constantly, this is pretty horrible. If you want a useful score, it is great. You pretty much need to separate complete monitoring from a useful score and decide which you need or if you need both. Both means buying more than one product, possibly from two different providers.

Sounds like monitoring with regular full reports gives you the info that you need for reports. You can then pay for a EQ FICO from here or EQ to give you a real score. You wouldn't need to buy another EQ FICO unless the info in your reports changes substantially.

All the products available have some positives and some huge negatives. You just need to do the research and pick what fits your needs.

Re: FICO Score Breakdown (i.e., "Credit Mix")

my-own-fico — Fri, 14 Dec 2012 22:23:45 GMT

Is creditworthiness 1) having good credit 2) the eligibility to get credit, 3) the ability to meet debt obligations? Being a low risk translates into having a high FICO score and vice versa. This is the one responsible behavior FICO is concerned about, not just any responsible behavior. A credit score is based on credit report data, which does not include stuff like bank accounts and work income. That however doesn't prevent various credit score models from being all over the map. FICO for instance includes authorized accounts while the Equifax Credit Score excludes them, possibly providing a hefty gap.

Re: FICO Score Breakdown (i.e., "Credit Mix")

tb_purchasesonline — Fri, 14 Dec 2012 22:42:16 GMT

Wow... very disappointing and misleading adverstising from this site.

I was about to cancel my Equifax.com account (where I can check my report and score 24/7). Instead of canceling the account, I decided to do the 10-day from myFICO.com. The account creation could not be completed (same two emails were cross-referenced to same SSN). I ended up calling the 800 #.

Anyhow... long story short. The customer service rep informed me that I could only get 2 FICO score updates per year. Wow... how misleading this site has been!

So, I abrupted the entire process... will delete my myFICO bookmark and RETURN to Equifax.com... although it may not be a true FICO score, I at leat can get a score that +- 2 points (probably) 24/7 throughout the year.

Sorry guys... I'm just very disappointed that I find this out from the CSR. That twice a year should have been advertised (if it is, it must be in fine print). 8(

Re: FICO Score Breakdown (i.e., "Credit Mix")

llecs — Fri, 14 Dec 2012 23:35:47 GMT

tb_purchasesonline wrote:

Anyhow... long story short. The customer service rep informed me that I could only get 2 FICO score updates per year. Wow... how misleading this site has been!

So, I abrupted the entire process... will delete my myFICO bookmark and RETURN to Equifax.com... although it may not be a true FICO score, I at leat can get a score that +- 2 points (probably) 24/7 throughout the year.

Hate to see you go, but you can pull your FICO scores whenever you want through the FICO Standard product, though at a cost of $20/pull. ScoreWatch clearly advertises that you only get two reports per year with the first being used when you subscribe. It's also mentioned throughout the site. Same applies to Equifax's version of ScoreWatch. You only get two reports per year.

As you know now Equifax offers several products. Many of them allow you to pull your EQ report whenever you want. What many of us do is subscribe to services like these. As we see changes and want to know our FICO score, then we come back here and pull it. I'd ignore the score though. My FAKO Equifax Credit Score is usually about +/- 50, though for many it's not too far from that. The advice on their site is counter-productive too.

Re: FICO Score Breakdown (i.e., "Credit Mix")

Swapmeet — Sat, 15 Dec 2012 07:27:59 GMT

You don't need to keep pulling a score if you have an sw subscription because it alerts and displays any change in your fico score.