Why don't you just play the silly game that the Fair Issacs folks seem to require?   Go onto your cards' web sites a few days (try 4 or 5) before the card closing dates and pay the cards down or off in advance of their billing date (not the due date - the statement closing date).  Make FICO think you are using a very low percentage of your available credit no matter what you a really doing.    FICO has no brain here - it considers a balance owed on the billing date without allowing for the fact that you always pay it in full a few days later, well in advance of the "due date".  They do not distinguish between people actually using revolving credit and people just charging things for convenience (or to get the rewards - like points or cash) that the cards offer.  You can boost your FICO score noticeably in just a couple months through this silly process.   Of course, FICO could also consider whether you ever pay interest or late fees, which would give them even better info and allow them to get to the same result, but that would require extra effort, so they prefer just giving those who like mileage points and cash rewards a lower score.  Stupid, but there you are. ... View more

cheddar wrote: just_curious,   With all due respect, here is what you are missing, in my opinion. You are a greater risk in that respect than someone who doesn't charge up their cards and PIF them every month. The fact remains that those who use their cards heavily represent a greater risk than those who do not. Actually, no.  Ability to pay [which is indirectly reflected in the payment history] matters too, actually.   I believe you have examined only one variable in a multi variable world.  Someone who charges $3,000 per month on their cards (with lines totaling $25,000 - 12% utilization) and pays only in part each month [thus incurring interest costs] because it is a strain on their capacity to pay is, in fact, a higher risk than someone who charges $30,000 per month (with lines of $100,000 - 2.5 times the utilization) but can easily PIF without strain. [Neither of these are me, I should point out.]   In other words, you have left out the ability side of the equation.  Since FICO doesn't have income and asset info, the idea I have floated - to actually reflect a PIF history correctly - is a reasonable approximation.  I assure you that I am not a higher risk than those who use their cards less heavily than I do, and my track record proves it.  FICO just hasn't learned to deal with it. ... View more

masdeocho wrote: Don't blame Fair Isaac.  It's the credit card companies, mortgage lenders, car finance companies, etc. who decide when in the billing cycle they will report your balance to the CRAs.  The FICO score can use only the data that is available to it on your reports. WRONG (with respect)..................................... Fair Issac is exactly who we should blame.  All they have to do is ask for the interest and late fees charged (which the CCCs would be happy to provide).  They would then know when accounts are PIF and could fix their system appropriately.  The resulting scoring would be better - period. ... View more

And the OP rejoins the thread. I am glad to hear from others who agree that FICO has a problem here....   Score_Watcher wrote: Again I point out that the only information credit reporting companies receive from your cards is if your minimum payment was on time (and not the amount of said payment) and your statement balances.  Anything that happens between statements (interest charges, payments and purchases) is not reported. Which is exactly the point.  Why can't Fair Issac simply request the info on interest charges and late fees from the CCCs and factor that into the analysis?  If they did, they would know that, with no interest and no fees, the balance must have been PIF, so they could better understand the way many of us use our CCs in today's world - to capture rewards.  If you don't, you are basically subsidizing those of us who do...so, "Thank You".   Rewards programs are very meaningful - I have had many great family trips in business or first class, stay in suits in Starwood hotels (Westin, St. Regis, W, and so on) everywhere, and get significant cash back on Amex Blue.  But to "satisfy FICO" I need to pay my balances BEFORE they are even officially posted..????   That is STUPID - period.   Here are the facts..............................   I have credit lines totaling well over $200K on my CCs, plus two more without limits.  Many open 15+ years, one well over 30.   I pay every card, every month well before the due date, no matter what the amount owed (and it is never a strain on the checking account).   I paid off my mortgage in full years ago, bought my second home with cash, and pay cash for all major purchases - art, cars, etc. (unless I can charge them and earn more miles/rebates).   But, to get the appropriate FICO score I need to pay five or six days earlier that the monthly CLOSING date to "trick" the utilization factor ????? - just plain stupid.  And I should open an installment loan I don't need???  Also ridiculous......   Fair Issac could fix this.  Instead, under the new FICO 2008 version, my "failure" to have installment loans or a mortgage will probably actually REDUCE my score.  Again - just plain STUPID.   FICO scoring is simply WRONG......   They should get their heads out of the sand and FIX IT. ... View more

Barry wrote:   Hi just_curious,   [deleted text]   So, long story short....you may be right, but what consitutes "improvement" lies with what the data tells us in terms of predicting future risk.   Barry Barry -  I guess I just hope the gurus will continue to look at this topic as the CC rewards business is much more important that it was 20 or even 5 years ago, and has clearly impacted CC usage and payment behavior, resulting in some scores that don't make logical sense (not just mine...).   And, by the way, understanding "credit behavior" was sort of critical to my career, so I wouldn't assume too much lack of knowledge there....   Anyway - Thanks for the response - it helps make this forum useful to have you around it..... ... View more

masdeocho wrote: The FICO score measures the PROBABILITY of paying back debt, not the ABILITY. No - actually, it does not.   Think about what has been said on this thread - by myself and others who use CCs to their full advantage, including rewards programs.  I have never missed making any payment on time, and in full, in decades of using a wide range of credit instruments.  Yet FICO is so hung up on the % of my credit limit that is outstanding at the moment the monthly statement issues that it cannot possibly properly judge my "probability of paying back debt".  To do that Fair Issac needs to modify their algorithms to reflect the PIF behavior of many CC holders, which would only require a very minor adjustment in the data they consider.   This has been my point since my original posting - that a relatively minor improvement to the analysis would make a measurable improvement in the FICO scoring system, and I haven't seen anyone rebut this.  The comments that "it is what it is" and "just play the game" and so forth aren't really responsive.  I know how to "play the game" but the real question is...........   WHY SHOULDN'T FICO IMPROVE ITS SCORING SYSTEM ?? ... View more

JuliaTN wrote: "I have about $100,000 in credit card limits, maxed out every month and PIF each month. I, too, have NEVER had a late payment on any loan, CC, etc. My oldest accout is about 15 years, no inquiries etc. Yet my EX FICO is 655. I need to get a mortgage for an investment property but I can't get the rate that I think I "deserve" with that score.   It's awfully annoying that instead of just being my paying-on-time self, I have to manipulate the system to make myself look better to potential creditors... Yup - my point exactly  With CC limits that exceed $200,000 (not counting two cards with no limits), a perfect payment record, and the income to support all this, Fair Issac's simpleminded algorithm simply can't get it right.   OK  I have heard/seen all the "It's not logical - just live with it" comments.  But why is that the right system?  FICO scores are important beyond just the next credit card, and, as Julia apparently could testify, they can mess up one's life even if they are just plain wrong.  So, here's an idea -  just determine if the accounts are PIF every month and fix the algorithm to reflect that POSITIVE fact.  It should be easy!   I would like BARRY the FICO guy to respond.  How can we get him to join this discussion??? ... View more

haulingthescoreup wrote: I for one do not want anything more reported to the CRA's than what already is. One snapshot of my credit usage per month is plenty, thank you. And if they start reporting mid-cycle balances, or whether I PIF'd after the balance was reported, or my average balance over the month, that is just additional opportunities for things to get screwed up. And that means more crap that I have to try to clean up. Actually, I was suggesting that FICO simply be told if a CC account is not charged interest, thus is PIF each month.  It is amazing that they try to set a CS without considering this aspect of CC usage.  And I can't see it as a big deal to add one, binary item to the info mix.   And the posting about all the other ways your FICO score can impact your life is right on point.  With the power FICO has developed, I would think a 95% accuracy rate (mentioned elsewhere) would be unacceptable - try applying a 95% accuracy rate in a few other aspects of life and you'll see what I mean. ... View more

hunting_bears wrote: I've read this whole thread many times and the only thing I can't understand if that you have good investments, a nice savings, a good income, basically have a good financial life set up why would you worry about a CS?  If you have money to pay off a mortage, to buy a car outright, to rack up thousands of dollars on your CC each month and have the money to PIF then a mid-range to good CS should be the least of your worries because frankly you wouldn't need it.  I don't think people like Bill Gates or Warren Buffet or even new millionaires worry about their CS for personal purchases.  They know they have the money to pay it outright so there's no need for credit for that purchase. Actually - that's a reasonable question.  My personal scores are very unlikely to impact my life at all.  My various CCs have very high limits ($20,000+) so the issue is really not about me.   Really, my reaction when I saw my FICO scores was almost purely conceptual.  Here's the concern - with FICO scores impacting so much of a person's life these days, it just bothers me that the algorithms are so removed from properly measuring some personal financial situations.  After reading many of the threads here with posters with much more direct knowledge than I, I have come to the conclusion that only if Fair Issac Corp is willing to consider a more sophisticated approach to their analytical model will there be any improvement.   One clear improvement would be to include the aspect of accounts which are PIF each month (no interest charges) which is clearly available, even if Fair Issac chooses to disregard it now.  In fact - if one of the FICO folks who follow this forum cares to respond, I would ask - Why not add that component to the factors you consider?????   There are plenty of ways to "game the system".  You just need to know that before you apply for a credit card, a job, a car loan, a home loan, or whatever.  So -- pay off all but about 5% of the credit limits on all your cards just before the closing dates on your accounts for a month or two and you are likely to have a much higher FICO score than otherwise.  Of course, paying the rest of the balance by the due date is important also, but FICO seems to think that paying three days early is way more important than it really should be.   OK - I am seeking logic where it does not exist...but shouldn't it ???  Any comments from the FICO folks ??? ... View more

I'm new to the board, but I believe it is the general consensus around here that the CCCs report the balance as shown on the monthly statement and do not report interim figures.  Thus, if you make a payment before the statement closes to reduce the outstanding balance before the closing date, the util % is less (which FICO just loves loves loves ).   Then be sure to pay the remaining, smaller balance before the actual due date and you have gamed the system...using your available credit while sticking a stick in the eye of the FICO algorithm.   Is that what others have found??? ... View more

RobertEG wrote: A blistering post upon reality!  Never, ever, has anyone suggested that FICO is the begin or end all of credit worthiness.  But if FICO becomes an issue in any credit situation, you dont have to agree that their scoring systems makes sense.  You just have to live with it, and if you need it in any credit decision, know the rules of the FICO road.  That is what this forum is all about... not seeking logic, but seeking wisdom. Pontification upon the rights or wrongs of FICO algorithm is like pissing in the wind.  It only soils your own jeans! Well, that may be correct, although my jeans are clean at the moment.  Here's the issue - in a world where credit scores are checked by everyone from landlords to employers, you have to wonder how Fair Issac gets away with such an illogical approach.  That is what got me started on all this - the complete lack of logic.  And please understand, the info to prove I pay off all my cards completely every month is readily available (e.g. - no interest charges).  Why wouldn't that be relevant to FICO even without income and asset info?????  How can a credit score be valid without that data point?   Please note - my personal situation is unaffected by this issue (although I know others not so lucky).  I don't need credit at the moment, and I understand that the Private Bankers who want my business can read my personal financial info and "get over" the FICO problem to realize I am "worthy" of the most favorable rates out there.   To respond about my own scores - the estimates that I am in the 720 to 740 area are right, at least the last time I checked them (a few weeks ago).  I would guess mine may jump around quite a bit if the usage factor is as big a deal as many say it is (Yes - I have read that thread of speculation, so I know there is some uncertainty).  I used credit cards for lots of big ($10,000 and up) purchases, and manage my selection of cards for these charges for the rewards I prefer at the time, not to avoid using my credit limits.   By the way, I also have some cards with good limits (>$25,000) which have very low usage every month.  Apparently the algorithm looks to see if one or two (some say three) cards are above 50% and deducts points for that, even if there are others at 0.1% or 0.2%.  Again - if they just considered that the card is PIF every month, they might start to get it right.   How hard would that be after all????   ... View more

haulingthescoreup wrote: There's nothing dumb about FICO scoring. You just have to give it the proper data to work with. What I see is a need to become expert at gaming the system - which shouldn't be necessary.  Look, the cards are PIF every month - FICO should be able to distinguish between carried over balances and cards which are PIF since those data are easily available (for example, I never have paid any interest on any card, ever).  If I use a high % of the CL and pay it off every month for years, it is really just a sign that CCCs don't have the ability to give high enough credit limits without me providing tax returns and other information I choose not to give them.  That's one reason I carry the unlimited cards as well.   So, I think a metric which says high usage of limits, without considering other facts (the use of rewards cards, always PIF, etc...) is missing a level of sophistication that is odd, since it shouldn't be that hard to understand what is going on here....   And, remember, in the face of that, I am apparently being penalized as well for not having a mortgage or other installment debt.... ... View more

Timothy wrote: You have some valid points but also some inconsistent ones as well- No mention of $'s here and that is fine- BUT your 2 "NO LIMIT" Amex cards are not calculated into you Utilization of cards- and if you happen to be to be pulling reports for that one CRA that has the old FICO formula then it uses the "High LiMIT" Congrats on you perfect payment history- My APR on my Mortgage is about 6% - are you telling everyone in this forum that 1. You do not have investments that have a higher return than 6% to take advantage of? and 2. Are in such a high income bracket that you can not take advantage of the interest deduction? Welcome to MyFico - you are right in the fact that it is a game, fortunately we have a good chunk of the rule book here and invite you to spend a little time reading to find out the real reasons FICO is not properly depicting your credit "RISK" Message Edited by Timothy on 11-12-2007 05:24 PM Thanks for your welcome !!   I really do think Fair Issac needs to revamp its analytics a bit.  Let me respond to a couple of your points to show what I mean....   I prefer not to provide specific $ numbers, but suffice it to say that my income and net worth are more than sufficient to assure that I can meet any possible credit card utilization.  To clarify, I pay my cards in full every month.  I am using credit to get benefits, not to finance a life style.  I have a perfect credit record and will continue to do so, but FICO can't seem to understand this form of credit card use, so it ranks me lower than seems logical with a perfect track record and my resources.  That's my issue.   I am not sure what is "inconsistent" about my points - could you clarify?   As to your two mortgage questions - #1 - of course I have higher return investments (including non-public investments).  I also have lower ones (money market accounts, and, unfortunately some stock market mistakes - oh well....).  Paying off the mortgage was a minor use of funds, and it fit into the overall portfolio reasonably well.  Smallfry has a valid point as well.  #2 - I am telling you that.  Deduction phase-out is a back door increase in tax rates that I have lived with for years.   Thanks for the idea to read more in the forum; I plan to of course.  I do sort of understand how to "game the FICO system" reasonably well, just pay down cards before the billing cycle dates since mid-month data is not reported and so forth.  The real issue is why the standard analytics cannot reflect the facts of my payment history without that game playing.   So, a simple question - shouldn't years of payments in full every month trump the "concern" about my card usage that suppresses the score?  In other words, isn't FICO wrong?     ... View more