Formulas

[fishbjc]

Anyone know if it's been discussed to mandate the scoring process?  I think they should release how this is done.  There was a guy on Suze Orman who works for 'this' company and he didn't really have an answer as to how everything was scored.....it's our number after all, it shouldn't be guess work on our end.  Thanks to this website, we at least have a 'clue'.

[Tuscani]

The only thing more classsified is the coke formula.

[MidnightVoice]

A couple of points.

Generally speaking, anything over 720 is pretty much gravy.  720 will get you almoat anything you want at good rates.  And to get that, I guess you need a couple of years history, a mix of accounts, low utilization and perfect t history.

I don't KNOW this, but I would guess the formula is really designed for people who live permanently in the States and are integrated into the system.  So the changes are they have (or have had) car loans, credit cards and have been around awhile, and the formula for them is probably USUALLY quite accurate.  I also assume that the formula assumes that a person will not enter the system and want a mortgage on day 1.  And mortgages look at a lot of other things as well, as it id a really gig, long term loan.

[haulingthescoreup]

---

MidnightVoice wrote:

I don't KNOW this, but I would guess the formula is really designed for people who live permanently in the States and are integrated into the system.  So the changes are they have (or have had) car loans, credit cards and have been around awhile, and the formula for them is probably USUALLY quite accurate.  I also assume that the formula assumes that a person will not enter the system and want a mortgage on day 1.  And mortgages look at a lot of other things as well, as it id a really gig, long term loan.

---

Very true! Like every scoring system, including 4th grade, SAT's, and the Medicare prospective payment system, FICO scores deal with the blob --the majority of borrowers who follow what is assumed to be the typical way of consumer life. The outliers --18-year-olds, relatively recent immigrants to the US, those who don't have mortgages and other installment loans, etc. --are not going to fit as neatly into the scoring system.

It's a one-size-fits-most, not all.

[MidnightVoice]

---

haulingthescoreup wrote:

It's a one-size-fits-most, not all.

---

AKA statistical model. 

[Anonymous]

The FICO score is a commercial product that Fair Isaac sells to lenders. They put years of work and lots of $ to develop the scoring process, so they have no obligation to give away a corporate trade secret.

Any other company or person is free to develop their own scoring process and try to sell it.  Why should Fair Isaac hand over the result of its work to competitors?  The consumer (you and me) are not FICO customers in the big picture even though we have to buy the score and even though it affects our lives.

Ya gotta love capitalism.

Message Edited by masdeocho on 12-26-2007 11:36 AM