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Senior Contributor
Noah_Bodie
Posts: 4,635
Registered: ‎03-11-2007
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Re: Credit Scoring 101 - START HERE!



youngmike wrote:
US District Court, Southern Dist. FL., # 07-80031 CIV, Middlebrooks/Johnson, check it out!


Is this supposed to be legit, or are you out from under your bridge?
 
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PTL07
Posts: 4
Registered: ‎07-04-2007
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Re: Credit Scoring 101 - START HERE!

Wow! You could teach a class for this.  For the first time, I kinda get what's going on with FICO scoring!  Thanks Tuscani!
New Member
softballmom
Posts: 3
Registered: ‎07-06-2007
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Re: Credit Scoring 101 - START HERE!

This was awesome...After 30 years of credit ignorance, I am finally taking responsibilty for my own credit score ( I always depended on someone else to figure things out!) and will now work on educating my teenagers on how to start smart and not have to "fix" things later on. Thanks for the easy to understand posting! I am fortunate however that my credit does not need fixing and I have a good score. :smileyhappy: Thanks again!
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medicine2k7
Posts: 1
Registered: ‎07-06-2007
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Re: Credit Scoring 101 - START HERE!- confused

[ Edited ]
hello everybody, im a little confused, my transunion credit score says that I have a 746 score but this is out of 990 in the range of 551-990 which gives me a grade level of C.  I got this through Transunion. But a FICO score is in the range of 300-850.  What does this all mean?  Should I still order a FICO score?  My WAMU credit card account gives me a FICO score but im in the process of applying for student loans so cant wait till it updates. Please help.


Message Edited by medicine2k7 on 07-06-2007 10:30 PM
Regular Contributor
Skiffy
Posts: 252
Registered: ‎03-16-2007
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Re: Credit Scoring 101 - START HERE!- confused

FICO's the score that's most commonly used throughout the industry. Some consumers call the non-FICO scores "FAKO" scores, which should tell you how much they're worth. :smileyhappy:
Mega Contributor
RobertEG
Posts: 18,543
Registered: ‎03-19-2007
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Re: Credit Scoring 101 - START HERE!

It has always irked me that the FICO simulators just give projected numbers, with no indication of where of how they were generated.  I have put together a comprehensive Microsoft Excel spreadsheet that attempts to simulate FICO scores based on my best understanding of the many factors entering into the scoring algorithm.  It is, of course, based only my assumptions, and is only approximate, but seems to work well for me in all my assumptions.  It requires initial input of detailed past personal credit history, but once that is done, all that is needed is to update monthly and projectd future payments, etc., and projections can be made for at least a year into the future.  I solicit review of FICO gurus on the assumptions I have made in this spreadsheet, and will gladly share it with anyone wanting to take a look.  It is totally my work product, and thus public domain, and is totally non-commercial.  In putting it together, regardless of its precision, it really shows me exactly where points are actually being lost and gained.  I welcome iinput from those who have a better understanding of my assumptions than I have made.   
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fused
Posts: 16,373
Registered: ‎03-12-2007
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Re: Credit Scoring 101 - START HERE!



RobertEG wrote:
It has always irked me that the FICO simulators just give projected numbers, with no indication of where of how they were generated.  I have put together a comprehensive Microsoft Excel spreadsheet that attempts to simulate FICO scores based on my best understanding of the many factors entering into the scoring algorithm.  It is, of course, based only my assumptions, and is only approximate, but seems to work well for me in all my assumptions.  It requires initial input of detailed past personal credit history, but once that is done, all that is needed is to update monthly and projectd future payments, etc., and projections can be made for at least a year into the future.  I solicit review of FICO gurus on the assumptions I have made in this spreadsheet, and will gladly share it with anyone wanting to take a look.  It is totally my work product, and thus public domain, and is totally non-commercial.  In putting it together, regardless of its precision, it really shows me exactly where points are actually being lost and gained.  I welcome iinput from those who have a better understanding of my assumptions than I have made.   


I am very interested in seeing this. Try and paste it in this thread.
Credit Profile -
FICO 08 Scores (11-08-2014): EQ 818, EX 817, TU 822
All three scores were 850. Lost points for not having an open installment TL. So, BE WARNED!!!!!
Credit History: 26+ years ~ AAoA: 12 years ~ Util: 1% ~ Inqs: EX 1

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pfflyer
Posts: 1
Registered: ‎07-11-2007
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Re: Credit Scoring 101 - START HERE!

This from the Score Basics link gets at my question:

DON'T:

1. Close unused credit cards as a short-term strategy to raise your score. NEVER close an open account unless it is costing you money!

 

According to a Fair Issac Corp rep, and my step-daughter' s account of something she heard Suze O say, the above means that, all other factors being equal...

Person A:

- One credit card with a limit of $5,000 with a $500 balance, spotless payment history over 18 months.

- A credit report showing five other PAID OFF AND CLOSED accounts, all with a spotless payment hisotry over 36-48 months.

 

Person B exactly the same, except the five paid off accounts remain open and have a credit limit totaling $7,500 - that is Person B has access to potential debt of $7,500.

 

Person A will have a lower Credit Score!  Given that Person A has a substantial and spotless credit history and no ready access to additional debt I would think Person A would have a higher socre, but apparently I am wrong.

 

I'm no rocket surgeon, but can someone explain this counter-intuitive reasoning to me?

PF Flyer

 

Senior Contributor
Noah_Bodie
Posts: 4,635
Registered: ‎03-11-2007
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Re: Credit Scoring 101 - START HERE!



pfflyer wrote:

Person A will have a lower Credit Score!  Given that Person A has a substantial and spotless credit history and no ready access to additional debt I would think Person A would have a higher socre, but apparently I am wrong.

 

I'm no rocket surgeon, but can someone explain this counter-intuitive reasoning to me?



Ready access to additional debt does not make you a higher credit risk. If it did, then the people with no credit cards would have 850 FICOs because they'd have zero access to additional debt.
 
In your example, everything else was equal, except Person B had a higher total CL. Their CC util would be lower since everything else, including balances, were equal.
 
Having available credit does not make you a credit risk, and that's what one's FICO score is all about. Risk.
 
For one person, a $500 CL on a Cap 1 Visa might prove too much tempation and they max the thing out and go overlimit at least 3 times a year. Cap 1 is very happy with the fees, but the consumer likely doesn't wear a FICO happy face.
 
For another person, they might do fine with their 3 CCs and a $65K total CL. Always pays on time, never overlimit, and their util is between 1 and 9 percent.
 
FICO attempts to predict risk by looking at one's past and current credit behavior. A neural scanning device would be far more accurate, but they are still working out a lot of kinks. I was a test subject for an early model, but it was powered by 220 and burned out a lot of neurons.
 
Mega Contributor
RobertEG
Posts: 18,543
Registered: ‎03-19-2007
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Re: Credit Scoring 101 - START HERE!

Since this thread is FICO 101, I must ask a basic FICO'nic question.  Hooked on FICONICS?  Rather, I ask, what is your goal in increasing your FICO score?  Sounds like a simple question, but from my personal experience, so quickly lost when reading the many posts on this and other forums directed simply at quick FICO score increases.  Get me a quck higher FICO, and I can make all better!  Dahh!!!
I can think of only one reason why one would be absorbed in quick FICO score increases other than that they want to secure new debt.  If one assumes that a FICO score is a measure of one's credit worthiness at snapshot A, and one uses the many short terms tricks discussed on this site to secure that higher FICO score at snapshot A, and thus use that to obtain more debt, then the Wizard of Was will shoot snapshot A to the credit bureaus, admittedly a month or two after snapshot A was taken, and new snapshot B will show increased debt, new credit inquiries to obtain that debt, and the new debt inherently restricting the ability to pay out on the old debt.  Dorothy in Oz
There is only one long term FICO score solution.  Consider and estimate the longer term effects of the short term perceived gains that can only serve to entice one to secure more debt, and thus eventually imperil both true credit worhiness.  In a few months, the credit bureaus will catch up and have reports on what has been done since the last FICO, and bite one on your FICOnic mastery. The magesty of the May FICO bump, followed by the flowering in June of its perceived budding and the purchase of the new Mercedes, may lead to wilting in the autumn with more debt, added credit inquiries, higher monthly payments, increased % util, and trhus a less favorable credit mix.  FICO may be a mystery, but I submit that in the long run it is telling us something.  They are smart enough to know that tatics to get a higher FICO now suck you into taking on more quick debt with snapshot A in your hand, and snapshot B may be the truer picture.
This month's FICO score orgasm is not a necessarily a measure of the future impact of actions taken, or any good measure of long term credit worthiness unless all factors and their future impact are considered.  There just aint no free.  Harvard Businees PhDs program FICO.  In the long term they will prevail, because the MBA bible says you dont take from Peter just to pay Paul, they get a rake from both
Be careful of short-term FICO obsession, my FICON'ics. 

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