I was forced into bankruptcy in June 2015. For the past year, until mid-March, my Experian based FICO 2 , which is what my bank uses,was always from 3 to 6 points higher than my FICO 8, which is what Experian shows me through their Credit Tracker product. In mid-March, my 8 was 671. I went to the bank, and my 2 was 630. Not only was it suddenly over 40 points lower than my 8, but it was lower than it had been the last time the bank pulled it, in September, when it was 656. It took a long time to figure it out, but it boiled down to a single account.
When the bank pulls the 2, and when I pull it myself (through Experiasn's Credit Works) I have a high revolving credit utilization. Experian shows me the usage under "what is hurting my sacore". When I pull the 8, Experian has my the usage under "what is helping your score". My usage with a FICO 2 pull is 40% and with a FICO 8 it's 25%.
Doing the math it turned out that the difference is an account I had reaffirmed after the bankruptcy. It was originally a revolving account, and the original shows as closed and discharged through Chapter 7. They opened a new account in Nov. '15 for me to pay off what I'd reafffirmed. On the reports I can see from Experian on my computer, it's listed as Type: Home Furnishings Store, Terms: Revolving, and Status Closed. Balance almost $1K, payments $38/mo. All payments made as agreed. The store, after some internal audit or other, sent corrections to all 3 bureaus. Payment history hadn't been showing correctly, and it had not been showing that it was a Reaffirmation acciount, rather than a normal revolving account that had been closed with a balance still owing.
According to the store, that balance should not even be inviolved in my revolving usage computation. But in the report Experian shows me, there is no place to specify that it is a reaffirmation account. On the other hand, when I called Experian the guy said it was designated as a reaffirmation account.
The really puzzling thing is that doing the math (add all revolving limits together, add all revolving balances together, then divide balances total by limits total) gave 40% (what the FICO 2 pull said I had) when the reaffirmation account is included in the math, and 25% (what the FICP 8 pull said I had) when it is not included. Obviously, wherther or not it really says someplace that it's a reaffirmation account, the FICO 2 is treating it as a closed revolving account with a balance and no counterbalancing limit, while the FICO 8 is ignoring it as far as revolving usage is concerned.. That adds almost $1K to my revolving balances, when I only have about $5200 in limits.
I do not know when this started to happen, since I don't usually see my FICO 2. I get the 8 along with my Credit Tracker subscription, and if I want my 2 or any other edition score I have to go over to Credit Works and pay for it. But as I said, my 2 had always been a few points higher than my 8, and the last time the bank pulled it, in September, it was 656, 4 points higher than my 8 was then. Then in March FICO 2 was showing high usage (40%) while FICO 8 was showing low usage (29%), the 2 was suddenly over 40 lower than the 8, and was even lower than it had been in September. Apparently, sometime between Sept. '16 and Mar. '17 the FICO 2 started using that account's balance in the revolving usage math.
WHAT us going on here? Can the FICO 2 treat an account as part of revolving usage at the same time as the FICO 8 does not?
My FICO 8 right now is 677. Given the historical difference, until now, between my 8 and my 2, it's a near certainty that ny 2 would reach or break 680 if that account's balance was not being figured into the revolving usage equation. And 680 or higher would give me both a 12 month longer repayment period and a lower interest rate.for refinancing my car which, for reasons that don't matter here, absolutely has to be done quickly. In fact, the interest rate difference between 680 or higher and 637, which was my FICO 2 as of about a week ago, is incredible. That 637 is, for the bank, 3 whole tiers below 680.
Can anyone explain why the FICO 2 is seeing the account as a revolving account while the FICO 8 is not?
