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Clyde
Posts: 3
Registered: ‎10-31-2013
0

Score seems wrong

My credit union offers a free FICO score each month which I usually ignore.  When the message says my score has changed, then I take a look. I'm now up to 766 and although this is a good score, I think it should be higher. The message I get with the score is that I am making heavy use of my available credit but I disagree. I do have quite a few revolving accounts but only a few are used regularly and mostly they are paid in full each month. The ones which carry a balance are at zero interest for a period of time and I pay it off before the end of the offer. At these interest-free offers are on existing accounts; I'm not opening new ones. I pulled my annual report and looked at the balances reported and the majority of them are at 50% or less of available credit and then only for a short time as they are normally paid in 12 months and I never go near the credit limit. Bills are ALWAYS paid on time and there are no errors on the report. I know I am lucky that my score is good and that I am in a position to pay my bills in a timely manner but this really irks me. How the heck do they figure these things? P.S., funny note: I hit "spell check" button and it changed the word FICO to PICO!!

Frequent Contributor
kkapdolee
Posts: 355
Registered: ‎09-17-2012
0

Re: Score seems wrong

Which Credit Union do you get your score from? Is it DCU or PSECU or something else?

 

The conventional wisdom on the FICO forums would tell you that 50% utilization of your credit is way too high. You are advised to keep it under 10%.

 

In any case, 766 is pretty good.

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Valued Contributor
Gunnar419
Posts: 1,272
Registered: ‎01-23-2013
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Re: Score seems wrong


Clyde wrote:

My credit union offers a free FICO score each month which I usually ignore.  When the message says my score has changed, then I take a look. I'm now up to 766 and although this is a good score, I think it should be higher. The message I get with the score is that I am making heavy use of my available credit but I disagree. I do have quite a few revolving accounts but only a few are used regularly and mostly they are paid in full each month. The ones which carry a balance are at zero interest for a period of time and I pay it off before the end of the offer. At these interest-free offers are on existing accounts; I'm not opening new ones. I pulled my annual report and looked at the balances reported and the majority of them are at 50% or less of available credit and then only for a short time as they are normally paid in 12 months and I never go near the credit limit. Bills are ALWAYS paid on time and there are no errors on the report. I know I am lucky that my score is good and that I am in a position to pay my bills in a timely manner but this really irks me. How the heck do they figure these things? P.S., funny note: I hit "spell check" button and it changed the word FICO to PICO!!


You've got to remember, though, that the utilization portion of your score (which is big) isn't based on whether you make on-time payments or whether you PIF after you get your statement or whether you pay balances off before the end of special promotional periods.

 

It's based solely on what reports on your statements. So it's great that you've earned a 766 score for all your other responsible credit behaviors. And your very fortunate to have that high a score with utilization as high as you describe.

 

It may be irritating, but utilization is a big factor.

 

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elvigy
Posts: 83
Registered: ‎07-27-2013
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Re: Score seems wrong

A score of 766 is actually pretty good for that utilization. I recently stopped paying before the statement date since I'm not looking for any more credit currently. That meant that all 4 of my cards now report balances and my score from myFico dropped from 758 to 746 immediately after the Discover card reported a $72 balance. So even though my total util is 17%, having a balance on each card hurts. And having one card over 50% hurts even more I think.

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Visitor
Clyde
Posts: 3
Registered: ‎10-31-2013
0

Re: Score seems wrong

Thanks for the info.  I checked all three credit reports and they were fairly consistent.  I can see why using 50% can cause a problem if how quickly you pay that down to a zero balance is not taken in to consideration. I think it is a flaw in the system if the circumstances of the credit offer aren't taken in to consideration, but then again, the credit card companies want you to maintain a balance at 22.9% for the rest of your life, not pay it off before the interest accrues.  Thanks again for the information; I'll keep it in mind the next time I get one of those offers.   

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kkapdolee
Posts: 355
Registered: ‎09-17-2012
0

Re: Score seems wrong

[ Edited ]

elvigy wrote:

A score of 766 is actually pretty good for that utilization. I recently stopped paying before the statement date since I'm not looking for any more credit currently. That meant that all 4 of my cards now report balances and my score from myFico dropped from 758 to 746 immediately after the Discover card reported a $72 balance. So even though my total util is 17%, having a balance on each card hurts. And having one card over 50% hurts even more I think.


Is the FICO score you got from MyFICO the EQ score? If so, then it is a FICO 04 score and I think that one for some reason penalizes carrying a balance much more than other versions. I have not paid off before my statement date in a while as I wasn't looking for credit and my 04 score never went up, staying around 680 while my 08 scores shot up to 760. Also everytime I purchase my scores from MyFICO, EQ 04 is the only one that keeps telling me that I have too many accounts with balances just because I don't pay off and stop using my CCs right before the statement date anymore even though I PIF every month.

 

I'm still trying to understand the differences between all these different versions of FICO scores.. 49 to be exact..

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lg8302ch
Posts: 3,136
Registered: ‎11-13-2012
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Re: Score seems wrong

I recently did a score watch challenge (testing)... on all of my 8 accounts I did report a 1$ balance and guess what I lost 47 points on EQ Fico score...incredible result 8$ balance = drop of 47 points! It looks to me that the number of accounts reporting a balance even if really small hurt even more than 1 account at 90%. My scores were higher with Discover maxed out and only 50% of the accounts reporting a balance of less than 9% :smileyhappy: ....Fico is really strange.

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kkapdolee
Posts: 355
Registered: ‎09-17-2012
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Re: Score seems wrong

[ Edited ]

lg8302ch wrote:

I recently did a score watch challenge (testing)... on all of my 8 accounts I did report a 1$ balance and guess what I lost 47 points on EQ Fico score...incredible result 8$ balance = drop of 47 points! It looks to me that the number of accounts reporting a balance even if really small hurt even more than 1 account at 90%. My scores were higher with Discover maxed out and only 50% of the accounts reporting a balance of less than 9% :smileyhappy: ....Fico is really strange.


Thanks a lot for confirming my suspicion! And Kudos to you for actually testing it out at the risk of your own score albeit temporary.

So the 04 version does not like to see accounts with any balance at all regardless of how small they are..

 

Well.. I don't like the 04 because I don't want to have to pay off the balance before statement and not use my cards for a few days every month.

However, I think more and more lenders are now using the 08 version. Past 6 out of 8 HPs I had were all using 08 variation (Classic or Bankcard).

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Visitor
Clyde
Posts: 3
Registered: ‎10-31-2013
0

Re: Score seems wrong

As I read these posts I'm learning more and more and I'm coming to the conclusion that this credit score thing is quite a scam! I'm sure my credit union (which offers my score each month free of charge) either gets revenue or some other benefit for offering this service because as soon as I log-in to see my score I'm offered products to purchase. How can having so many variations in reporting methods be helpful? It only confuses matters and tempts you to buy more products such as credit monitoring and different types of reports. How do you know which report your bank will look at when you apply for a car loan? These things should be standardized so people aren't comparing apples and oranges, especially when the score can have such a huge impact on your life! Your homeowners insurance premium can go up if you have a low credit score...You could lose out on a new job if your score is considered too low! If your score has such an big impact on your everyday life there should be regulations to level the playing field. When all these credit reporting agencies are supposed to be doing is reporting the truth there should not be wild variations.  Perhaps your "score" shouldn't be calculated by an agency that is not the one providing the credit?  Perhaps the credit agency can just gather the information from your existing creditors, generate an accurate report and calculate the percentages as a service to the purchaser of the report or the individual who is the subject of the report, i.e., Clyde used 50% of his AmEx line of credit and then paid it off in six months. I want my banker to know that and not be led to believe that Clyde can't keep his AmEx account below 50%! Each potential lender should decide your creditworthiness, not a company that doesn't loan you the money and which uses different algorithms to create different reports for sale!





 

Contributor
elvigy
Posts: 83
Registered: ‎07-27-2013
0

Re: Score seems wrong

All this is good to know. Yes, it is my EQ score that I'm monitoring on here. And I always thought it was a little "off" since my TU Fico score (from Barclaycard) is 783 even though the information is roughly similar. An almost 40 point difference. My EX score is also pretty high, though I don't have a recent one. It was in the 790s a couple of months ago.

 

So the EQ score I get from here is significantly lower than the other FICO scores I have access to.

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