Understanding the new fico8

MightyMark · ‎11-06-2010

I just read on AOL that the FICO 8 System will not use judgements under $100 to determine your credit score. These are called nuisance judgements that are usually forgotten utility bills. I have a paid judgement for a power company bill that was $77 and I would love to see this removed from my credit report.

Has anyone heard about how things will change with the new FICO8 scoring system?

Here's the link to the story on AOL. It's interesting. http://realestate.aol.com/article/credit/_a/how-to-navigate-new-credit-score-tool-for-mortgages/2010...

Mark

GQ-007 · ‎11-06-2010

I understand your point. However, my issue with FICO is that it underscores the argument against a monopoly. Which is precisely what it is. Let's set aside a moment, the wisdom of these buckets. True or not, FICO gets to decide, what makes sense and what doesn't. Once the average person learns the principals of of the FICO system, FICO refines or changes it's model. Now I embrace change, especially for the good. But what I can't wrap my arms around is the need to reevaluate the steps I've taken to comply with the FICO's model. Because FICO changed the rules. In what other industry, weather sports or business can you get away with that. Even with the new rules related to credit cards, the financial industry was given time to adjust there business model to adapt to the new regulations. Did some of them take a hit? Yes. But they were given the opportunity to prepare themselves.

My argument boils down to, people should not take a hit on there credit scores because of a FICO decision. I now understand(if true) why AMEX uses it's own scoring model. That way they are not held to the whims of a giant like FICO.

chasmith · ‎11-06-2010

The CRAs and lenders are slow to change - and they choose which models are used. From what I've read hewre, TU is still on an old model.

My impression (and I haven't looked closely) is that the newer model may de-emphasize nuisance collections like parking tickets, library fines and small medical bills. It may make leveraging AUs harder. But what is so draconian about it?

BK7 Filed 8/11/2009 Discharged 11/23/2009. Purchased new home 4/11/2012
Starting Score:11/16/2009 EQ 566 11/16/2009 TU 538
Interim Score: 12/27/2012 EQ 683 09/17/2012 EX (lender) 670 1/01/2013 TU 701
Current Score: 11/06/2013 EQ 708 11/06/2013 EX 702 11/16/2013 702 11/06/2013 TU 729
Goal Score: EQ 740 EX 740 TU 740
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haulingthescoreup · ‎11-06-2010

I wouldn't hold my breath waiting to feel FICO 08's impact on our lives.

You'll note that this thread is three years + a week old, and hardly anyone is using FICO 08 yet.

* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007

MarineVietVet · ‎11-06-2010

@haulingthescoreup wrote:
I wouldn't hold my breath waiting to feel FICO 08's impact on our lives.

You'll note that this thread is three years + a week old, and hardly anyone is using FICO 08 yet.

OOOOPPSS!!! Thanks for reminding me of that Hauling. I thought it would be better to split this off the older thread to start a newer one but neglected to mention that. Sorry about that.

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 10/10-813, TU - 10/10-774

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

haulingthescoreup · ‎11-06-2010

@MarineVietVet wrote:
@haulingthescoreup wrote:
I wouldn't hold my breath waiting to feel FICO 08's impact on our lives.

You'll note that this thread is three years + a week old, and hardly anyone is using FICO 08 yet.
OOOOPPSS!!! Thanks for reminding me of that Hauling. I thought it would be better to split this off the older thread to start a newer one but neglected to mention that. Sorry about that.

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 10/10-813, TU - 10/10-774

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

No prob. I'm just a bit baffled by all the oldie-moldie threads that are being dug up out of the root cellar today.

Just a general observation for those doing searches and turning up old threads (the dates show on the threads): some things don't change in FICO scoring, like minimizing the amount of CC debt that reports, and don't be late. Other things, like whether or not AU cards will be counted and which scoring versions are being used by whom, vary all the time. Nothing wrong at all with reviving old threads, but it's awfully handy if you point out that it is an old thread, and ask whether the info and advice is still relevant and correct.

New members especially are apt to read them and think that they contain the most current knowledge, when they often don't.

* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007

llecs · ‎11-06-2010

@GQ-007 wrote:
I understand your point. However, my issue with FICO is that it underscores the argument against a monopoly. Which is precisely what it is. Let's set aside a moment, the wisdom of these buckets. True or not, FICO gets to decide, what makes sense and what doesn't. Once the average person learns the principals of of the FICO system, FICO refines or changes it's model. Now I embrace change, especially for the good. But what I can't wrap my arms around is the need to reevaluate the steps I've taken to comply with the FICO's model. Because FICO changed the rules. In what other industry, weather sports or business can you get away with that. Even with the new rules related to credit cards, the financial industry was given time to adjust there business model to adapt to the new regulations. Did some of them take a hit? Yes. But they were given the opportunity to prepare themselves.

My argument boils down to, people should not take a hit on there credit scores because of a FICO decision. I now understand(if true) why AMEX uses it's own scoring model. That way they are not held to the whims of a giant like FICO.

Since the post was split, I'm not sure what the org. comments were, but FICO isn't the primary arbitor of creditors. You brought up Amex, but nearly all CCCs place FICO at the bottom of their list in determining credit worthiness. I'd bet that most don't even use a FICO score in their credit decisions for a CC. Spending a day in the Credit Card board is a great example of this. There are some who get approved for a Citi CC or a GEMB card (JCP, Wal-MArt, etc.), for example, with scores in the 500s or low 600s. Then there are folks like me, even when my FICO scores were in the 700s (at the time), couldn't get approved for those CCs. They look at other factors like DTI (which isn't factored into FICO scoring), or specific aspects like type of credit on your CR, current credit portfolio, balances, inquiries, etc.

@MightyMark wrote:

I just read on AOL that the FICO 8 System will not use judgements under $100 to determine your credit score. These are called nuisance judgements that are usually forgotten utility bills. I have a paid judgement for a power company bill that was $77 and I would love to see this removed from my credit report.

Has anyone heard about how things will change with the new FICO8 scoring system?

Here's the link to the story on AOL. It's interesting. http://realestate.aol.com/article/credit/_a/how-to-navigate-new-credit-score-tool-for-mortgages/2010...

Mark

To add to others, I think FICO08 (which I have yet to find a post anywhere of a lender using it) excludes collections (CAs) under $100 and not judgments. And under FICO08, the negative stuff isn't removed and it'll still appear on your CR, but the FICO score itself will exclude it from the calculation. If this is a judgment that's on your CR, then it is possible to get it removed early.