03-07-2008 08:52 AM
03-07-2008 08:55 AM
I have worked very hard to obtain and maintain a good credit score. However I beleive that because of where I live (Low income neighborhood in NYC-Bedford-Stuyvestant) my credit score (Experian 757) does not mean as much as it would if lived elsewhere. Is this true? Do communities have credit ratings. My neighborhood has been hit hard by the subprime mess. I am greatful to God that I did not get caught up in it. I have a fixed rate martgage from a prime lender and 75% equity in my home. It seems as if my score is going to suffer through no fault of my own because of the state of the economy and where I choose to live. Is this true?
Also when will the new FICO formula go into effect? I want to buy scores after the change is made.
03-07-2008 12:16 PM
03-07-2008 12:26 PM
03-07-2008 01:08 PM
That is correct. FICO 08 will not include AU accounts in its scoring model, but it is not yet in effect.
Cheddar,I JUST read in the lastest issue of BE mag that FICO '08 will not include AU accts in the scoring anymore.A lot of people are going to take a big hit behind this one! WOW!SerenityBound....indeed!
03-07-2008 07:11 PM - edited 03-07-2008 07:29 PM
This may sound very elemental, but sometimes the elemental can be illuminating for old men like me! Let me see if can get, with the help from the experts on here, this whole tangled process straight in my mind!
OK, I know that FairIsaac is in the business of generating mathematical scoring algorithms based on data provided to them, and they run it through one of maybe dozens and dozens of different computer algorithms that they have developed. They change their algorithms based on peer “bucket groups, and also apparently at the specification of other criteria that a client specifies. But no data is apparently reported by creditors directly to FairIsaac, Data goes first to each CRA, if it buys a score from FairIsaac, then, FairIsaac, through commercial contract with each subscribing CRA, generates a score that can only be called a FICO score if it was generated by a contract with FairIsaac… am I correct so far?
Now this is where my confusion really begins….
Which of the CRAs have a contractual agreement with FairIsaac to provide back to them (the CRA) scores that are true FairIsaac authorized and produced FICO® scores? It is stated over and over on here that only Equifax scores are actual FICOs, and others are FAKOs. But myFICO sells to us scores from all three CRAs, which indicates more than just business being done with EQ.
On the consumer version of FICO® that we get through this site, advertised and sold to us as myFICO scores, we can get a score directly from FairIsaac based on data reported from all three CRAs (EQ, EXP, and TU) that are called FICO scores by myFICO. They charge us for each separately. Do each of the three CRAs thus purchase and obtain scores generated by FairIsaac using the FICO algorithm?
If so, then why do EXP and TU have their own versions of credit scores, called Advantage scores, that are always called FAKO scores on here? Does that mean that they have their own, separate computer scoring algorithms that they generate totally independent of FairIsaac, and thus cannot be advertised or sold as FICO scores? And thus there can never be any correspondence between scores reported on myFICO and those sold by other vendors, because the math is not the same?
Does EQ also generate its own version of a credit score, not provided by FairIsaac, and thus not a true FICO?
And, even if a score is generated directly by FairIsaac, it appears that each CRA can then designate to FairIsaac one of a myriad of FICO algorithms it wishes FairIsaac to use when providing a score back to them? For example, on the myFICO Credit Information tab in the site menu, under the category of Inquiries, myFICO indicates that they use different algorithms, at the request of their customer, to calculate the effect of multiple loan/auto inquiries, with one algorithm using a 14 day shopping window, and another using a 45 day window, at the request of their customer.
No wonder there is so much confusion about credit scores that change for mysterious reasons other than the “rebucketing” catchall that many just use to eplain the unexplainable.
If we don’t know what computer generated our mysterious credit score, and thus whether it is a FICO, FAKO, or some hybrid using a pinch of this and a punch of that, they how can we ever understand our scores? And if we on here cannot answer those simiple questions, then i shudder to think that a creditor who pulls our score has anywhere the understanding that we on here have of where it came from, and what it means.
And now FICO08 is coming. Apparently, each CRA who subscribes to FICO has the option of whether to purchase and use the new or old version. Will individual creditors/lendors, when making a credit inquiry, also have to specify an addtional version or twek of FICO score they want, and if so, how in the world will we, the consumers, ever know or understand the rules?
I wont even dare mention CC enhanced, auto enhanced, mortgage, enhanced, etc. scores, or dare to ask whose computer is producing those babies, and whether they are generated totally indepently, or are in some manner tweaks of FICO!!! Does FairIsaac generate these scores? Or is a whole, brand new, different algorithm that has no relation to FICO? My head spins!!!
I wish someone could explain all of this to me!!!!
03-07-2008 08:32 PM
03-07-2008 08:42 PM - edited 03-07-2008 08:47 PM
myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.>> About myFICO