FICO has projected that the total number of consumers with at least one AU on their credit report is about 60 million (approximately 30% of those with credit reports). Further, 10 million (5%) will not see their score change when AUs cease to be calculated in FICO scoring. Of the remaining 50 million (25%), they could see a score decrease of as little as 1 point; not to mention those who will actually see a score increase because they were an AU on a negative account. I think a 30-50 point drop - per account - is quite exaggerated. There are millions of thick file credit reports that include one or two AUs - those accounts will be affected very marginally. Yes, there will be significant numbers who may see significant score drops, but throwing around numbers like 80 million consumers and 200-point drops is a bit hysterical.
Also, people tend to forget that Fair Isaac was the entity who did NOT want the AU scoring to be negated - it was the lenders who pushed for the change.
In addition, a score propped up by AUs does not automatically guarantee loan approvals - good lenders who conduct proper manual reviews will often factor out AUs when considering applications. The scoring change won't affect those lenders, it will just make their computations a bit easier. The real beneficiaries of the scoring change will be the lazy, high-volume lenders and CCCs, who based their approvals heavily (or completely) on bare scores, and who were vulnerable to the commercial piggybacking.
Message Edited by Revike on 08-09-2007 12:34 AM