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11-03-2013 09:51 AM
JOHN DOE: Let's assume "FICO ~700" credit; UTI remains steady 9%; AAoA >5 years old; any "major" derogs/lates greater than 2 years old; no collections...
As you pay every month, how many points does FICO increase?
Less than 5 points per month? Just off the top of my head, I would say 2 points/month which amount to 24 points per year. In 5 years, an individual with a FICO of 700 today (with the above scenario) would then be around 820 by 11/03/2018 (assuming no new HP, AAoA increasing over that time span, too and NO missed payments).
11-04-2013 07:46 AM
Your score isn't going to change unless something happens that would warrant a change. AAoA goes up, a TL ages, a derogatory falls off etc.
You aren't rewarded for ontime payments. Those are expected.
11-04-2013 08:35 AM
Thats interesting. Do you know that as fact? Just asking?
So, increases in score will only occur:
1) as AAoA goes from, say, 23 months to 2 years;
2) As derogs age and/or fall off;
3) As a "new" account is no longer new;
4) As a HP ages > 1 year;
Anything Im missing?
Seems like, then, month-to-month there really shouldnt be any changes till you hit FICO "milestones", then? Have people here observed this?
11-04-2013 12:30 PM
Yes, I know for a fact that FICO does not reward you for ontime payments. You are dinged for not making ontime payments.
I am not sure of all the buckets that comprise a FICO score. I think some of them are secrets. But when you change from bucket to bucket is when the scores go up.
Those you mentioned and there may be others.
11-04-2013 12:33 PM
11-04-2013 02:13 PM - edited 11-04-2013 02:18 PM
Question, then, Guiness56....
This is interestjng to me. Thank you, btw, for the info. My question;
You know how a new account is counted as ONE year in your AAoA from 1 month till 23 months. Then, once the account turns 2, literally, it counts in your AAoA as 2, but NOT at 23 months 28 days. You MUST wait till it is actually 2 years old.
Now, do "major" derogs act similarly but in reverse? Let me give you a hypothetical: I become 120 late November, 2013 and REPORTED on all CRA. Then, I pay on time every month. Will the "major" derog prevent FICO from increasing till it is 2 years old? That is, as I pay on time every month from 1 month to 23 months, FICO doesnt care. But, once it becomes 2 years old, literally, I will see a bump in FICO score, anologous to a new account aging?
I am ass/u/me-ing that FICO increases monthly following a "major" derog as you pay ontime every month. But, from what you say/infer is that a "major" derog wont stop affecting your score on a YEARLY basis, not monthly. And, first bump wont come till you successfully pay for 24 straight months.
11-04-2013 07:32 PM
Yes, there are specific dates for AAoA to age. And it is always rounded down to the nearest year. That is why you have to wait the full 24 months.
As for major derogatories, I am not entirely sure how FICO sees them as far as age. They will impact your score for the entire 7 years they report, just not sure how much they lose impact and at what points.
The more major derogs you have the less a new one will hurt you compared to say someone that has a 750 score. That 750 could lower 100 points or more.
Same is true with getting them removed. The more you have the less points you are likely to see. But someone that has only that one would likely see a higher score bump.
You also have to consider the actual buckets and moving from one to another. Most you will gain points. But moving from a dirty bucket to a clean bucket could drop your score.
At no time do you get any point increases for simply paying on time. The increases are due to other things happening on your report. Like a derog aging, a TL aging, something being removed etc.
11-05-2013 08:22 AM
11-05-2013 11:21 AM
11-05-2013 05:22 PM - edited 11-05-2013 05:25 PM
Anything 0 - 23 months is one year for AAoA for FICO.
CB may calculate differently.
I have 5 FICO scores I bought from MyFICO saved in my computer as pdfs. Every one of them say my AAoA is less than 1 year (ranging from 5 months to 8 months depending on when I got them). Are you saying the actual formula will calculate AAoA differently from what the credit report I purchased from this site says?
Since you said making on time payments have no effect on credit scores, does that mean that if all of my accounts are less than 1 year old, all my inquiries are recent (within the last month), and I don't open any new accounts, that my score will not change at all for almost a full year since there is no AAoA change, no inquiry change, and no derogs falls off?
Does 0-23 months apply to all versions of FICO scores?
How does one improve his score if he just started out in the credit world and has a very thini file then? Nothing he can do for a full year?