AA after using card at "low end" establishments?

[cashnocredit]

Nothing wrong with Dennys. My biz partner and I sketched out our ideas and names for a business we started in 1980 over luch in Dennys.  That's how I retired 10 years ago. 

[Anonymous]

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@red259 wrote:

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@Anonymous wrote:

"This guy has been eating a lot of Moons Over My Hammy, things must be really rough for him.  Poor chap, but he's now excessively risky.  Next it will be 7-11 hot dogs.  Shut him down."

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I like 7-11 hot dogs too! What the heck is going on here! 

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lol, I take mine with mustard and relish.  Sometimes chili and cheese but who knows how many weeks that chili has been marinating in the machine.  

[Gunnar419]

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@yfan wrote:

One thing that strikes me about this is that at least part of this behavior maybe contrary to risk models. Take the part about shopping at discount and thrift stores, for example. Yes, it may be indication that the cardholder's income dropped or that their other expenses increased, making less money available for repayment of credit card bills. However, for one thing, if the customer is modifying their own behavior to fit their earning and spending patterns, the chances are higher that they are responsible and won't default. Secondly, those patterns could just as well mean that a customer has decided to live within his means whereas they were living above it when they got the credit card - in which case, they just became a lower risk customer for the CCC.

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+1 to this. Whether cccs think as you do, I don't know. But what you say makes a lot of sense.

For all the mystery of risk models, it's clear that they're as much art as science and require constant tinkering. I think Amex's notorious punishments for Walmart shopping after the crash were ill advised and the company probably realized it, both for the reasons you state and because they got shamed in the media.

[longtimelurker]

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@Gunnar419 wrote:

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@yfan wrote:

One thing that strikes me about this is that at least part of this behavior maybe contrary to risk models. Take the part about shopping at discount and thrift stores, for example. Yes, it may be indication that the cardholder's income dropped or that their other expenses increased, making less money available for repayment of credit card bills. However, for one thing, if the customer is modifying their own behavior to fit their earning and spending patterns, the chances are higher that they are responsible and won't default. Secondly, those patterns could just as well mean that a customer has decided to live within his means whereas they were living above it when they got the credit card - in which case, they just became a lower risk customer for the CCC.

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+1 to this. Whether cccs think as you do, I don't know. But what you say makes a lot of sense.

For all the mystery of risk models, it's clear that they're as much art as science and require constant tinkering. I think Amex's notorious punishments for Walmart shopping after the crash were ill advised and the company probably realized it, both for the reasons you state and because they got shamed in the media.

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Most of these models are statistical though, and don't need a rational explanation  (e.g. the auto insurance credit score used to predict the liklihood of claims).  So, at least at the time the model was used, they must have found that switching to cheaper retailers did indeed correlate to a higher rate of default later.   The companies are trying to minimize their risks, not making value judgements.

[Anonymous]

I guess it's a good thing I pay cash when I'm updating my wardrobe at Goodwill and St Vincent DePaul.

[Imperfectfuture]

As the humor takes over the AA risk.

[Anonymous]

This info about the address was given to the FTC by FairIsaac themselves in the late 90's .You can actually find the document on the FTC website if you dig deep in the search bar . Its the only document ( its a powerpoint presentation ) released by fair isaac that details some of their scoring algorithm .

Watch this whenever your free

  https://www.youtube.com/watch?v=5gFDnQGr6WU

[Anonymous]

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@Anonymous wrote:

This info about the address was given to the FTC by FairIsaac themselves in the late 90's .You can actually find the document on the FTC website if you dig deep in the search bar . Its the only document ( its a powerpoint presentation ) released by fair isaac that details some of their scoring algorithm .

Watch this whenever your free

  https://www.youtube.com/watch?v=5gFDnQGr6WU

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Man, I was geared up to watch whatever your video was but realized it was 1.5 hours long. So the opportunity cost versus getting work done just isn't there. Unless the video ends with them mailing me a $15,000 check. Is the video breaking down the algorythm or what?

[Anonymous]

It doesn't break down everything or reveal some big secret but it details some stuff you won't find on fico.com .

[cashnocredit]

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@Anonymous wrote:

This info about the address was given to the FTC by FairIsaac themselves in the late 90's .You can actually find the document on the FTC website if you dig deep in the search bar . Its the only document ( its a powerpoint presentation ) released by fair isaac that details some of their scoring algorithm .

Watch this whenever your free

  https://www.youtube.com/watch?v=5gFDnQGr6WU

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A lot of his talk is useful and correct. Unfortunately, a lot is simply wrong. He cluelessly conflates the median FICO score of 720 with published averages. He uses an FTC presentation of credit scoring by Fair Isaac in 1999 that shows some of the early development "scorecards" which included things like occupation or rent/own wihich are not used in FICO scoring but were part of the earlier, physical "scorecard" based scoring Fair Isaac sold to banks. Creditors do still use things like income, years at the job, etc to adjust a FICO score to finalize some internal score but these have zero affect of FICO scores.

He also says FICO scores reflect demographics and base credit scores on where you live. Complete nonsense.

It's kindof long, folksy, and entertaining but take what he says with a cupful of salt.