Ouch...headache over "passive score improvement" ponderance

[_andClimbing]

Maybe this can't be answered, but I can't help wondering aloud. Admittedly, my analytic brain cells have atrophied since college. And since I know little of nothing about FICO scoring...

Is it possible, in this economic climate - with higher rates of foreclosure, CLDs, CC defaults, etc - that the worsening credit portfolios among others in my bucket might improve my credit score without me taking any action (other than avoiding any new baddies)?

Let's say I have a decent credit mix, low utl, no late payments for one year, but a BK and some old bad TLs IIB that are aging. I am in a pattern of waiting for my score to improve, as there isn't much I can do to improve my scores actively (besides pay on time, keep utl low, send GWs and pray).

Now, I am in a medium-high risk band in terms of default, based on my scores. Others in my score band/bucket may not be weathering this economy as well. If a high enough proportion of them default, will my credit score improve based on THEIR actions, since I am compared to the peer group?

[Anonymous]

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_andClimbing wrote: Maybe this can't be answered, but I can't help wondering aloud. Admittedly, my analytic brain cells have atrophied since college. And since I know little of nothing about FICO scoring... Is it possible, in this economic climate - with higher rates of foreclosure, CLDs, CC defaults, etc - that the worsening credit portfolios among others in my bucket might improve my credit score without me taking any action (other than avoiding any new baddies)? Let's say I have a decent credit mix, low utl, no late payments for one year, but a BK and some old bad TLs IIB that are aging. I am in a pattern of waiting for my score to improve, as there isn't much I can do to improve my scores actively (besides pay on time, keep utl low, send GWs and pray). Now, I am in a medium-high risk band in terms of default, based on my scores. Others in my score band/bucket may not be weathering this economy as well. If a high enough proportion of them default, will my credit score improve based on THEIR actions, since I am compared to the peer group?

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The data they compare you to is from past data that was gathered when the intitial algorythm of the scoring model was created. It is not real time. Your riskiness is based on consumer credit behaviour during a certain time Which was collected and analyzed to formulate the scoring model algorythm.

I hope that makes sense.

Message Edited by TheR1ch on 07-15-2008 11:11 AM

Message Edited by TheR1ch on 07-15-2008 11:12 AM

[_andClimbing]

That does make sense, thanks for the response!

[Anonymous]

Nice post TheR1ch-

IMO- Unfortunate to the US economy FICO has properly predicted the (for the most part) default of those with poor all the way up the scale of scores- 

FICO really needs to do a study to see how well it predicted default-