@Anonymous wrote:
@Thomas_Thumb wrote:
Back to LN CBIS Auto reason codes - Here is another interesting one that likely keeps my score down [my oldest account is an AMEX charge card from 1984 & oldest revolving CC is 1989 => age ratio = 84%]
3027 ........... Ratio of Oldest Bank Revolving Account to Oldest Account is 71.55% to 87.5%
A Ratio of 99.78% or Higher is Better
1. What information is this message derived from? The score considers how long you have had a credit history with a bank revolving account. This may be done by figuring how long it has been since you opened your oldest listed bank revolving account. If the account has been closed, it still may be considered. A bank revolving account is one such as a Visa, MasterCard, etc.
2. How does this affect my insurance risk score? Insurance industry research shows that consumers with longer experience managing their bank revolving accounts have fewer insurance losses.
3. What can I do to improve this aspect of my score? As your credit history ages on your bank revolving accounts, the score may improve based on this factor. To avoid lowering this aspect of your score, consider keeping your oldest bank revolving account active and only open new accounts when needed.
Hi TT! Yep, I posted about that strange ratio calculation earlier in this thread. Basically it is looking to see whether your oldest account is a revolving account (typically a true credit card rather than an installment loan or a charge card). If your oldest account is NOT a credit card, then you get spanked.
The interesting thing to me is that the explanatory text is false. It says
1. What information is this message derived from? The score considers how long you have had a credit history with a bank revolving account. This may be done by figuring how long it has been since you opened your oldest listed bank revolving account. If the account has been closed, it still may be considered. A bank revolving account is one such as a Visa, MasterCard, etc.
This factor is not, however, measuring how long you have had pure revolving account. If it was doing that, it would be rewarding Thom Thumb for having what is indeed a very old credit card (26 years old!).
Because it is looking at the ratio, you can get maximum scoring points from this factor for having your oldest account being an 8-month old Visa. In that case, your ratio (oldest major CC / oldest account) would be 1.0000. By way of contrast, the algorithm would penalize you for (basically) having a ratio that is anything less than 1 (you get spanked if it is < 99.78%) -- and it would penalize you even if you had a 40 year old major credit card!
So it makes me wonder if they actually know what they are trying to do. Are they, as the explanatory text claims, trying to measure whether you have a long history of using a pure major credit card? If so, this ratio test does not do that at all.
I also get spanked on this factor, since my oldest account is a student loan. I had an older CC, but it was inadvertently closed 13 years ago.
What they are trying to do (read all the reason codes), is find some way to raise your rates. Many contradict each other. 