Scoring Changes on MSN homepage

[Anonymous]

http://www.msn.com/en-us/money/personalfinance/major-changes-coming-to-how-your-credit-score-is-calc...

[Anonymous]

Seems alot of it is going to apply to Vantage scores. I found this a bit amusing

"But VantageScore handled 8 billion account applications last year, so if you applied for a credit card, that score was likely used to approve or deny you."

Out of mine and my DW 120 CC Ive never been denied or her were vantage score was ever used and only approved/denied with FICO scores. 

And then this 

But VantageScore will now mark a borrower negatively for having excessively large credit card limits, on the theory that the person could run up a high credit card debt quickly.

As long as they continue to use FICO. Ill keep all my limits 😂.

Also I don't understand how they could even calculate this as a factor. How do you determine it if everyones income level is diffrent. What is considered to much for one person may not be for another. Are they goinfgto start keeping track of our income?

Theory in other words assumptions, and we know assumptions have been the mother of all, well you know lmao

[Anonymous]

I shook my head and pretty much stopped reading as soon as I got to the point about how Vantage Score is used for over 8 billion(?!) applications per year while the reporter appears to think FICO is used primarily for mortgages. I wonder if he even has any credit cards or ever even applied for one, or he wouldn't write, as the saying goes, pure O.D. nonsense like this.

[red259]

Just saw this AP article as well. It will be messed up if all our high credit lines start reducing our credit score. 

[Revelate]

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@red259 wrote:

Just saw this AP article as well. It will be messed up if all our high credit lines start reducing our credit score. 

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Ain't skeered.

Excessively large is in the eye of the beholder and to be fair our income isn't on credit reports and until Vantage/FICO start integrating 3rd party databases, they judgement on that is irrelevant.

Lenders of course, have done this manually so I understand why VS would want to try to put it in there, but lenders have the data to make use of regarding income, bureaus don't, so I also think there will be a disconnect there.  That said, the 8 billion may well be an entirely accurate number, but it was likely a secondary score pulled rather than the primary UW score given to the lender.  Lenders can and will pull different scores / datasets on a given application, though I personally think FICO + VS is redundant but if you're testing it it's probably cheaper to do it that way.

End of the day, until Vantage becomes more relevant to my financial life than an idle curiosity (and I did have something UW on VS back in early 2013 from Chase so it does happen), and if it gets integrated into FICO in the future it's just something we'll be able to game out just like we do with other parts of the algorithm.  For all we know excessive limits might be >250K for example, /yawn.

[Anonymous]

Last time I heard Vantage scores were big in rental. I think I heard of 1 lender using Vantage scores for cars loans and that is it. I get tired of companies that post Vantage scores since so few places I apply to use them and they have little value to me.  

[sarge12]

I do not know if what is described in the article will soon also apply to fico, but the part about viewing the trajectory of debt is something I have always thought should be in the score. If your total amounts of credit card debt is increasing by 500 dollars a month for a year, you are spending more than your income every month and most likely headed for trouble. Using the upward trajectory of revolving debt to identify those who are living above their means might save some people from themselves. The biggest problem with this is most of the credit card issuers want you to spend more than you make. They just don't want you to spend so much that you default. For this reason, I can not see issuers being likely to adopt such a scoring model. As high as the typical credit card interest rates are, they can be profitable with a fairly large number of debtors defaulting. If the credit score models most used were to do this, it might cause many who are revolvers to become transactors. I guarantee the issuers do not want that to happen.

[Anonymous]

Adding that this actually made our local news this morning during the Consumer segment.

[Anonymous]

Well, what the issuers want doesn't matter in this instance. I'm not falling into that particular trap again, having fallen into it twice in my adult lifetime and having had to resort to bankruptcy the second time around to claw my way out; and as of now I still have 92 months to go until that BK finally falls off my report for good. though I know the negative consequences will slowly decrease as time goes by. I'm aware that some so-called premium lenders will no doubt take a look at my CC spending patterns going forward and say "this guy doesn't spend scads of dollars per month with his cards, why should we bother giving him super-duper metal-plated Ultra Private Reserve Card X?" I'll deal with it, providing I have decent cards with decent CL's, APR's and rewards.

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@sarge12 wrote:

I do not know if what is described in the article will soon also apply to fico, but the part about viewing the trajectory of debt is something I have always thought should be in the score. If your total amounts of credit card debt is increasing by 500 dollars a month for a year, you are spending more than your income every month and most likely headed for trouble. Using the upward trajectory of revolving debt to identify those who are living above their means might save some people from themselves. The biggest problem with this is most of the credit card issuers want you to spend more than you make. They just don't want you to spend so much that you default. For this reason, I can not see issuers being likely to adopt such a scoring model. As high as the typical credit card interest rates are, they can be profitable with a fairly large number of debtors defaulting. If the credit score models most used were to do this, it might cause many who are revolvers to become transactors. I guarantee the issuers do not want that to happen.

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[sjt]

This is big. They are using trended data and deeper analysis. This could lead to more banks/lenders to use Vantage.