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1:48 "Free's up some regulatory capital"
I think that explains a lot...
@cobaltnv wrote:
It is possible that he confused average with median. He mentioned that scores at the high end have been rising and the middle and low scores have fallen. Basically he said that there are much fewer people in the middle (between 600-720?).
It is possible, but I seriously doubt a former Fed Economist who now runs FICO would make this rudimentary error. Given the economy, I would not be surprised if the new average score has dipped (even if the 740-760+ group is raising their score...I do not recall if he mentioned if this group is raising their score by a greater % than the 640 and below group...but given the fact that FICO scores seem to drop a lot faster with delinquencies than raise with decreased util % and on-time payments, it seems likely the below 640 group is expanding at a faster rate and with lower scores than the 740+ group)
Thanks for the link OP. Well worth the watch. To me, scoring wise, I definitely took note of his groupings:
640/620 and below is "low"
720-740 is "high" (If the old average was 723, then this would confirm that the new average is in the mid 600s, as he stated)
and there are more and more people in these two groupings, and less in the 640-720 grouping...so if you imagine fico scores on a bell curve, the middle of that curve is dipping down and the ends are getting higher.
Good interview.
I am a new member and pulled my first myFICO Score Watch just yesterday.
Under the section "How Lenders See You" it states: "A FICO score of 750 is about average."
Lynette
8-06-09 Eq FICO 750 / Ex FAKO 776
@LynetteM wrote:I am a new member and pulled my first myFICO Score Watch just yesterday.
Under the section "How Lenders See You" it states: "A FICO score of 750 is about average."
Lynette
8-06-09 Eq FICO 750 / Ex FAKO 776
Yes, that average (or something around 720-725) existed well before this economy. That's partially why I too found his comment on the average score interesting. It would seem highly unlikely that the average FICO score is stagnant and does not fluctuate.
I wish the online reports we get here would adjust for that.
I am not a FICO expert, however, IMHO the average scores could not have dropped 100 points even in this economy.
Hopefully a mod will chime in with their opinion.
Hi plasticman,
I could totally see the average score dropping 100 pts. With the number of foreclosures and job loses there are lots of people whose Fico scores are dropping rapidly. Add into that the number of recent CLD which may also lower scores (although not as much as missed payments, foreclosures etc).
If the average was around 725 or so there is a lot more room to go down than up. Making it much easier to lower the average than raise it.
Just MO
Fair enough, but it would be helpfull if one of the mods who I think would know better than most of us would express their thoughts on the the matter.
Be well..
I was kinda wondering about the "Average" score, so when I went to the Bank this morning I asked by Local Branch Manager. (US BANK)
He told me the last he had seen it was right around 670. He mentioned that figure was from the first quarter of 2009, as it always takes a few months for info like that to be compiled and they would have data for the second quarter of this year in Sept.
@plasticman wrote:
Thanks DickC..very good info as usual from you!Message Edited by plasticman on 08-07-2009 01:41 PM
Thank You. Nice thing about being retired is that I have ample time to go and bug my banker.
Actually, I asked him if he had seen the interview from FICO's CEO and he said , "yes, he had".
Then I inquired about did he think he had mis-spoke regarding "average" and "midian" scores and he told me something that makes sense.
As he said, even if the "Midian score" (half above/half below) was in the 720's, the average score should be lower simply because on a 300-850 scale for scores that FICO uses, there is much more "downside" then "upside". I asked him to explain and he said it was this example.
You have 11 people with the following scores: , 400,450,500,550,600---720---,750,760,770,790,800.
The "MIDIAN" score of this group would be "720" (half above/half below) BUT the AVERAGE SCORE would be 645, because there is so much more room for lower scores then higher scores.
Makes sense to me.