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Senior Contributor
creditwherecreditisdue
Posts: 4,923
Registered: ‎04-19-2009
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Re: Credit Card Usage for high FICO score


Uborrow-Upay wrote:

creditwherecreditisdue wrote:

I have posted elsewhere here that this account aging is a FICO scam perpetrated by AMEX and a great way to "game" the FICO system. In your case you used it in combination with the AU scam, another great way to "game" the system. I fully endorse the use of these and any other ways to gain advantage over the FICO scoring models as long as they last. Just don't be too shocked when the CRB's decide any particular method of manipulating the system is out.


 

 

 

The AU aspect of it may already have lost its effectiveness if it's not an actual AU account IN USE by the AU.

 

What I'm trying to say is that I believe the bogus (no-card-in-the-hands-of) AU accounts are being disregarded to some extent (if not totally) right now.   The "pay for piggybacking" on someone else's credit history did not go unnoticed by the CRBs or the lenders, and measures were taken to remove these artificial histories from being factored into individual scores, IMO.

 

Feel free to chime in if anyone else here has real evidence of this, because I'm basing my opinion solely on input from a handful of folks I know with AU accounts but no accompanying cards or actual usage on the accounts by the AU.

 


As long as the account is in use (not necessarily by the AU) how on earth would it be possible to know the AU didn't use it unless the card numbers were different and the issuer made separate reports by user rather than by account? (Which they do not do!) What may have been weeded out are AU accounts which are not used at all by anyone.

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creditwherecreditisdue
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Re: Credit Card Usage for high FICO score


haulingthescoreup wrote:

creditwherecreditisdue wrote:

This advice runs contrary to all accumulated FICO wisdom and experience other that yours.



(This was in reply to a post that the member's scores do better with util <1%.)

But I have found this to be true for my scores as well. My scores are optimum with less than 1% util reporting. Of course, the figure is rounded up on the score reports to 1%, but if I suddenly had 5% report, there would be a drop. I've seen this with all three reports.

My "sweet spot" for scoring is 1 or 2 CC's with a balance on EQ, and 1 CC with a balance on TU, both with <1% util. Back in the day, EX was like EQ for me --2 CC's were OK. This is with 11 open CC's, a mortgage, a car loan, and a HELOC (not factored in my util because of the $50K CL.) Total revolving CL, excluding the HELOC, is $131K. It's not a huge score ding, maybe 3-5 points different, but at this stage in my credit life, torturing my scores is about my only remaining entertainment. (Besides the forums, that is.)

When you get down to this level of minutiae --util, # of cards with balances, etc --it very much becomes a matter of YMMV. My guess is that the differences are driven by age of accounts, but that's just a guess.

We generally recommend 1-9% here on the boards, because 9% or less is known to be helpful for util, and when someone has 50% util on their cards, they would pass out if you were to suggest 1%. The 9% freaks them out badly enough, as it is.s

 

Interesting that there is granularity in the 1-9% range. Even the sim's would not lead you to believe that. Further evidence of how important a factor utilization is in the FICO models. I wouldn't mention that either. It could provoke a mass psychosis.

 

I have never had my total util lower that 8%. I do know that letting one more account report and the total util increase from 8% to 12% cost me about 20 points. It will be interesting to see how my recent changes effect that.

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llecs
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Re: Credit Card Usage for high FICO score


creditwherecreditisdue wrote:

hobojon wrote:

Uborrow-Upay wrote:

The AU aspect of it may already have lost its effectiveness if it's not an actual AU account IN USE by the AU.

 

What I'm trying to say is that I believe the bogus (no-card-in-the-hands-of) AU accounts are being disregarded to some extent (if not totally) right now.   The "pay for piggybacking" on someone else's credit history did not go unnoticed by the CRBs or the lenders, and measures were taken to remove these artificial histories from being factored into individual scores, IMO.

 

Feel free to chime in if anyone else here has real evidence of this, because I'm basing my opinion solely on input from a handful of folks I know with AU accounts but no accompanying cards or actual usage on the accounts by the AU.


I hope that when FICO 08 is adopted and used, if they ever do, that this version somehow eliminates the benefits gained by purchased tradelines. I think it is scummy. As far as legitimate AU's, spouses and other household members. I don't think that will ever happen. I believe it is prohibited by the ECOA.

 I have never used any of my recently acquired 20 y/o Amex cards nor have my designated AU's and we both certainly have received the benefits of the cards credit limits and age.


It doesn't differentiate. It eliminates AU's, period. No more piggybacking on someone else's credit. There is really nothing unfair about that.

 

Could you explain exactly which section of the ECOA located here:

http://www.usdoj.gov/crt/housing/documents/ecoafulltext_5-1-06.php

applies to this matter?

Message Edited by creditwherecreditisdue on 07-16-2009 07:23 AM

The FICO 08 model had originally planned to eliminate AUs from scoring, like VantageScore does now, however they backed off of that last year. FICO did interpret a section within the law as vaguely prohibiting the practice of preventing AUs. To avoid any legal issues, FICO backed away and all AUs are factored into scoring in the new models.

 

Currently "FICO08" is available for EQ and TU only, under Beacon 9.0 and TU08 respectively. EX hasn't adopted this formula change yet. If you go to FICO's homepage, you'll have the ability to navigate through some links. One link is to a webinar on the TU08 model. It was a webinar with lenders on this change, with a Q&A at the end talking about why they decided to balk and what section they felt was applicable.

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creditwherecreditisdue
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Re: Credit Card Usage for high FICO score

Thank you. That will get looked at very shortly.

 

Your post was bookmarked as well.

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hobojon
Posts: 261
Registered: ‎01-20-2009
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Re: Credit Card Usage for high FICO score


creditwherecreditisdue wrote:
It doesn't differentiate. It eliminates AU's, period. No more piggybacking on someone else's credit. There is really nothing unfair about that.

 

Could you explain exactly which section of the ECOA located here:

http://www.usdoj.gov/crt/housing/documents/ecoafulltext_5-1-06.php

applies to this matter?


That's wrong and is really old news:

 

On July 31, 2008, Fair Isaac announced that its FICO 08 score will include authorized user accounts, after all. This change was apparently due to complaints from both lenders and consumers. However, Fair Isaac claims that although AU accounts are restored in FICO 08, it has found ways to still fight "piggybacking" - a method to artificially inflate one's credit score by becoming an authorized user of a stranger's good accounts.

 

 During a Congressional subcommittee hearing in July of 2008, Fair Isaac, following the recommendation of the FTC counsel, admitted that it would be illegal to ignore authorized user credit histories as a part of the FICO score calculation. This decision required Fair Isaac to revise FICO 08 and delay its release. On its web site, Fair Isaac states the following:

“Recent ‘credit repair’ tactics involving the manipulation of authorized user accounts have stirred industry-wide concern. This deliberate distortion of credit histories—often referred to as ‘piggybacking’—creates potential loss exposure for lenders. There is currently no information in the credit report that identifies legitimate AU relationships.

Still, many lenders want FICO® scores to continue considering spousal AU trade lines to support compliance with the Equal Credit Opportunity Act, Regulation B. In response, Fair Isaac analysts have developed patent-pending technology that includes AU data in the calculation of scores, while reducing potential impact from tampering.”

 

This all moot as it will likely be years before FICO 08 is actually used by lenders.

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Uborrow-Upay
Posts: 2,710
Registered: ‎10-16-2008
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Re: Credit Card Usage for high FICO score

"In response, Fair Isaac analysts have developed patent-pending technology that includes AU data in the calculation of scores, while reducing potential impact from tampering.”

 

Hmmm..wonder how they'd do that?

 

Interesting discussion, all the way around!

 

Thanks, all!

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creditwherecreditisdue
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Re: Credit Card Usage for high FICO score

[ Edited ]

hobojon wrote:

creditwherecreditisdue wrote:
It doesn't differentiate. It eliminates AU's, period. No more piggybacking on someone else's credit. There is really nothing unfair about that.

 

Could you explain exactly which section of the ECOA located here:

http://www.usdoj.gov/crt/housing/documents/ecoafulltext_5-1-06.php

applies to this matter?


That's wrong and is really old news:

 

On July 31, 2008, Fair Isaac announced that its FICO 08 score will include authorized user accounts, after all. This change was apparently due to complaints from both lenders and consumers. However, Fair Isaac claims that although AU accounts are restored in FICO 08, it has found ways to still fight "piggybacking" - a method to artificially inflate one's credit score by becoming an authorized user of a stranger's good accounts.

 

 During a Congressional subcommittee hearing in July of 2008, Fair Isaac, following the recommendation of the FTC counsel, admitted that it would be illegal to ignore authorized user credit histories as a part of the FICO score calculation. This decision required Fair Isaac to revise FICO 08 and delay its release. On its web site, Fair Isaac states the following:

“Recent ‘credit repair’ tactics involving the manipulation of authorized user accounts have stirred industry-wide concern. This deliberate distortion of credit histories—often referred to as ‘piggybacking’—creates potential loss exposure for lenders. There is currently no information in the credit report that identifies legitimate AU relationships.

Still, many lenders want FICO® scores to continue considering spousal AU trade lines to support compliance with the Equal Credit Opportunity Act, Regulation B. In response, Fair Isaac analysts have developed patent-pending technology that includes AU data in the calculation of scores, while reducing potential impact from tampering.”

 

This all moot as it will likely be years before FICO 08 is actually used by lenders.


This connection is very tenuous as indicated by llecs. You can reference ECOA, Regulation B here:

http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&tpl=/ecfrbrowse/Title12/12cfr202_main_02.tpl

 

The applicable language would seem to be:

 § 202.1   Authority, scope and purpose.

(a) Authority and scope. This regulation is issued by the Board of Governors of the Federal Reserve System pursuant to title VII (Equal Credit Opportunity Act) of the Consumer Credit Protection Act, as amended (15 U.S.C. 1601 et seq. ). Except as otherwise provided herein, this regulation applies to all persons who are creditors, as defined in §202.2(1). Information collection requirements contained in this regulation have been approved by the Office of Management and Budget under the provisions of 44 U.S.C. 3501 et seq. and have been assigned OMB No. 7100–0201.

(b) Purpose. The purpose of this regulation is to promote the availability of credit to all creditworthy applicants without regard to race, color, religion, national origin, sex, marital status, or age (provided the applicant has the capacity to contract); to the fact that all or part of the applicant's income derives from a public assistance program; or to the fact that the applicant has in good faith exercised any right under the Consumer Credit Protection Act. The regulation prohibits creditor practices that discriminate on the basis of any of these factors. The regulation also requires creditors to notify applicants of action taken on their applications; to report credit history in the names of both spouses on an account; to retain records of credit applications; to collect information about the applicant's race and other personal characteristics in applications for certain dwelling-related loans; and to provide applicants with copies of appraisal reports used in connection with credit transactions.

which is indeed a stretch.

 

As for:

patent-pending technology that includes AU data in the calculation of scores, while reducing potential impact from tampering

I suspect that doesn't go a whole lot deeper than weeding out AU's that are never used. I don't think enough information is collected by the CB's on accounts to go much further than that.

Message Edited by creditwherecreditisdue on 07-16-2009 08:15 AM
Frequent Contributor
hobojon
Posts: 261
Registered: ‎01-20-2009
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Re: Credit Card Usage for high FICO score

The rumors I have heard are that it will look at the addresses and see if they match (which could be problematic)

and

They will allow all AU accounts to report but they will only allow one of the tradelines to be used as a factor for the fico score (How they choose which one is beyond me)

 

Again, it will only matter when FICO 08 is actually used by lenders and the consumers can actually get those scores.

TU is still providing consumers scores based on their 1998 scoring model.

 

All the scummy companies that sell aged tradelines are using an FTC opinion and the ECOA to pressure FICO.

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hobojon
Posts: 261
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Re: Credit Card Usage for high FICO score


creditwherecreditisdue wrote:

As for:

patent-pending technology that includes AU data in the calculation of scores, while reducing potential impact from tampering

I suspect that doesn't go a whole lot deeper than weeding out AU's that are never used. I don't think enough information is collected by the CB's on accounts to go much further than that.


 

How could they determine if the lines weren't being used verses just PIF before the statement cuts?

Forcing a consumer to carry a balance so their AU beneficiaries accounts get factored into the score probably wouldn't go over too well.

 

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creditwherecreditisdue
Posts: 4,923
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Re: Credit Card Usage for high FICO score


hobojon wrote:

The rumors I have heard are that it will look at the addresses and see if they match (which could be problematic)


Match which addresses and how? I have one past address that EX has seven different address records for, The only reason they can resolve an address match is due to the fact that they are tied together by my accounts.


hobojon wrote:

They will allow all AU accounts to report but they will only allow one of the tradelines to be used as a factor for the fico score (How they choose which one is beyond me)


Lots of luck on that one. Would it be the oldest or the one with the highest CL or the one with the greatest utilization or...


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