I am convinced the FICO algorithm is fixed..

[maxedout]

I am thoroughly convinced Fair Issaic is tied in with the wall street crap. Last month my score was 700 with 48% utilization and the same installment balances I have now except we traded in an older car and leased a new one. The report hasn't updated yet to show our older car as paid off, yet I've had 4 car loans at one time on the recent past. It now shows us as having 3 until the reports catch up and only 2 will remain. I make 6 figure salary so debt to income ratios are low. In fact, we just were approved for a 15 year mortgage at 4.25% and the bank stated my debt to income was well below the old school ratios. So, recently I paid quite a bit of cc debt down. Went from 48% utilization to 23% in a month. Paid a 6k loan off and also the 4th car loan. We did apply for a mortgage and 2 credit cards. So now on the quarterly FICO statement, my scores dropped from 700 to 670. They always cite ridiculous factors for reasons why the score is being affected. Granted, I a medical bk in 2004 but have ZERO late payments on ANY accounts since 2004. That shouldn't affect my score much at thus point but will hamper me from obtaining a 800 score until it falls off in 2014. They then cite that my credit file isn't old enough (13 years) and that my average accounts are only 5 years old. Those weren't factors last time but now are. The system is "searching" as usual to find crap to ding you. Last but not least, I though the algorithm liked to see <30% utilization (obviously near zero is optimal) and yet mine is 23%, down from 48% last month and it is sell the 2nd heaviest factor lowering my score! It says I am making heavy use of credit at 23%! Ridiculous to drop my score 30 points with lower debt and loans paid off. My favorite ding is the lack of a mortgage account. Stability...pfft!

[Anonymous]

FICO scoring system assigns you a score by comparing you with others with similar credit profile, so that means somewhere out there someome is doing something better than you. I say too much loan activity is hurting your AAOA etc. I hope some experienced member chimes in on this...

[llecs]

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@maxedout wrote:
.....and leased a new one [car]. .......we just were approved for a 15 year mortgage at 4.25%.........and 2 credit cards.......Ridiculous to drop my score 30 points.....

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Adding a new trade line, like a CC, lease or mortgage (if reporting) can drop your points by that much or a lot more if all are reporting now. Adding any new credit can drop your FICO score because lenders are jittery with added credit or debt. Those with 800 FICO scores aren't adding anything new (typically) or if they do, they'll take a score drop and rebound with time.

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@maxedout wrote:
I make 6 figure salary so debt to income ratios are low.

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DTI isn't a part of FICO scoring. Someone earning $50,000 per year has equal footing per a score as someone earning $50bln per year. IIRC, Warren Buffett's score was posted at some point and it was in the low 700s.

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@maxedout wrote:
My favorite ding is the lack of a mortgage account.

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Where did you pull your report to see this mention? I could easily be wrong (often am) but I don't think this is a FICO scoring reason. It certainly is a reason for some FAKO (non-FICO) scores. I've seen this on reports from freecreditreport, creditchecktotal, and via the Vantage or TransRisk score from CreditKarma or TrueCredit. BTW, there are posters in here who hit 800 without a mortgage.

_________________

Per the FICO scoring aspect, you might know that the FICO score is very complex and is broken down into a series of score cards or scoring buckets. Without getting into the nitty gritty, your score is dependent upon everyone else's and thankfully you are not directly compared to someone who is late every month (or thankfully for them) and you aren't compared to someone with a 30+ year history. The positive and negative items listed on pages 2 and 3 of your report are a guide...a very accurate guide. It doesn't tell you how many points you are losing but those 1-4 items will shift up and down based on your credit profile. It just so happens that with others with a clean history and a BK, most other people have a utilization better than the 20% you cited. 20% is a tad high and I bet you can get an additional 20-30 points as you approach 0%. It's a general guide. Some items you can't do anything about (like a BK) and some items you have total control over. These items will shift up and down and even switch to the positive side from time to time depending on what they are. In general, avoid new credit. Adding CCs, a lease, and a mortgage will drop your scores considerably. And keep util low and pay on time as you are doing. Don't worry so much about installment balances since the impact is very minimal but avoid applying for new ones too if you can.

[maxedout]

I am more surprised that since utilization is such a high percentage of the score that a drop from 48% to 23% wouldn't attenuate the recent credit pulls and tradelines. My reasoning for the mortgage comment was, IIRC, from a FAKO but i'm pretty sure FICO likes "stability" . I just moved in the past 6 months too and that just updated. My biggest "beef" with this whole method of showing creditworthiness is that lenders who use the FICO or similar proprietary scoring methods , regardless if they lie about using "other" factors or not ( because we all know your creditscore is the determining factor especially with rate determination), is pure crap and doesn't tell the entire story. I don't recall being able to pull bear-sterns credit report or any larg institution when they took our tax dollars with TARP funds. Then the algorithm says I'm high risk because of the age of my file and average accounts even though 13 years of history isn't good enough. The breakdown of my page 2 shows 4 derogs and two positive factors. The derogs are: 1) bk in 2004 2) 23 utilization 3) overall file time (13 years) 4) average account time ( 5 years) The positives 1) no missed payments for > 6 years 2) length of credit history I just think the system is crap and we are getting fleeced as usual. Sorry for the rant.

[Walt_K]

I understand that you're upset, but it doens't really seem like you are getting fleeced.  You were approved for a mortgage with a good rate.  You were also approved for several other credit prodcuts, credit card, auto loans.  You didn't say the rate, but it sounds like you have pretty good credit and are just taking a temporary ding for all the recent pulls and new trade lines, which will recover in fairly short time.  If you were getting screwed, you'd be getting denials or having to look at subprime options.  Considering you just got approved for your mortgage and another car, I'm guessing  you'll have plenty of time for your score to climb back up before you need to apply for any more credit.  And for utilization, below 10% seems to be the number that works for most (not all) people on here.   

[MarineVietVet]

We all have different concerns and personal frustrations with credit and money management. I don't think negatives like late payments, CO's, collections, etc. should hurt your score for up to 7.5 years but that's the system we have to work within for now. I think a maximum of 3-4 years for negative reporting is much more fair.

There will never be any kind of scoring system though that will seem fair or equitable to all concerned because we have unique personal situations. I believe education is so very important. I had pretty good scores before I found this site but I've learned so much in just a year and a half. I realize now how to work the system and not let it work me.

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

[maxedout]

Maybe I'm greedy but I just think my score should be higher. You are correct that I have been able to get most cc's and auto loans. I got 0% financing in 2010 and 1.9% just this past December. I have worked extremely hard, as many of you have, building my file especially after a daunting fight with my college HMO for denial of services after they knew I was hospitalized through the ER. That led me to the shameful BK in 2004. I know much if my ability to get financed has been greatly impacted by my income level and DTI, as the score for most is the determining factor for rates unless you have an abysmal score. Maybe I won't see a vast improvement until the bk falls off in 2014...

[MarineVietVet]

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@maxedout wrote:
Maybe I'm greedy but I just think my score should be higher. You are correct that I have been able to get most cc's and auto loans. I got 0% financing in 2010 and 1.9% just this past December. I have worked extremely hard, as many of you have, building my file especially after a daunting fight with my college HMO for denial of services after they knew I was hospitalized through the ER. That led me to the shameful BK in 2004. I know much if my ability to get financed has been greatly impacted by my income level and DTI, as the score for most is the determining factor for rates unless you have an abysmal score. Maybe I won't see a vast improvement until the bk falls off in 2014...

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IMO a BK is nothing to be ashamed about. I am neither ashamed nor proud of mine. It is something I felt was necessary with the information and knowledge I had at the time.

Neither of us did anything illegal did we? So just accept it as one small part of your life. 

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

[Anonymous]

maxedout,

I may have missed it, but I'm unclear if you pulled a FICO score or not.  Pull one from here, google "myfico discount code" and be sure to ignore those FAKO scores along with comments, i.e. not enough mortgages that come along with FAKOS.  FAKOS cause ulcers, general crankiness, and more than one person - I'm sure - has pulled their hair out after paying attention to a FAKO score.

DH has three mortgages (one open) reporting on EQ.  His FICO is 776.  His FAKO, on the other hand, is 695 and states "not enough mortgage accounts."    Hilarious.

And those of us with BK's on our reports can obtain FICO scores up to 760.

[maxedout]

I know....sigh...I think I'm just upset that the gas prices are going up for no reason due to the same speculation crap that the government was supposed to reign in when wall street nearly collapsed and now I see this and it's the icing on the cake. I surely don't wear a tinfoil hat but I'm just tired of bring not able to hit > 700!! Thanks for letting me rant!