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Super Contributor
Posts: 9,008
Registered: ‎06-19-2013
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Re: Upgraded FICO score for no reason?


doggiepants wrote:

Through a Google search I just found an additional piece of information that may apply to my situation. It says, in relation to Fico 08:

 

"FICO 08 will take a closer look at certain groups of borrowers who lenders need more help with risk prediction. This includes subprime borrowers, new borrowers and those with few open accounts," with my situation being the latter. I'm guessing I'm getting dinged big time because I don't have a bunch of open accounts, and in fact, currently have zero revolving accounts since my Chase credit card was closed for inactivity. Once again I'm a BAD consumer for not having any credit card debt. Sigh.....

 

My wild guess is that Fico 08 greatly rewards those with lots of CLs, more so than the old scoring model did. In other words, it encourages consumers to have lots of (properly-managed) debt.

 

Again now I'm wondering, how do I get a credit card now that I suddenly went from having a very good Fico score to one that Fico considers 'not good'.? Am I really going to be stuck now with a secured CC??

 

It would have been SO nice to know ahead of time that they were making this change. Where's the fairness to your customers Fico? Just beyond frustrated right now...


TBH i don't think fico scores are there for customers benefit, I think its more for creditors. I know its frustrating to have to deal with. I think best way to think about it is you just have to know how to play around their rules. 



EX Fico 774 3/3/15 Fako 806 CS/Credit.com 11/24/14
EQ SW bank enhanced 5/26/15 827 CK fako 807 5/11/15
TU Fico Barclay's/Walmart 5/28/15 798 Fako 808 Creditkarma 5/11/15
Member
Posts: 16
Registered: ‎10-12-2012
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Re: Upgraded FICO score for no reason?

Thanks for this information Jello77. This supports the other information I read online.

 

Now how I get from zero revolving accounts to a bunch of them is beyond my ability to understand. I'm still not clear on whether or not a 656 Fico 08 score puts me in the secured credit card category or if I'll be able to get an unsecured card. I feel like with one CC under my belt my score will go up (as I will go from zero revolving accounts to 1), and it will make it much easier to get subsequent credit cards.

Valued Contributor
Posts: 1,680
Registered: ‎01-05-2010
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Re: Upgraded FICO score for no reason?

It's probably fair to say that any mainstream FICO model relies heavily on credit cards, far more than any other type of credit or anything else. When it is said, I wouldn't expedite an app spree, just because FICO 08 may favor many cards more than FICO 04 does! FICO 08 leaves plenty of room for imperfection while still allowing for a top-notch score.

 

Never underestimate the power of denial
Established Contributor
Posts: 650
Registered: ‎01-31-2009
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Re: Upgraded FICO score for no reason?


doggiepants wrote:

Through a Google search I just found an additional piece of information that may apply to my situation. It says, in relation to Fico 08:

 

"FICO 08 will take a closer look at certain groups of borrowers who lenders need more help with risk prediction. This includes subprime borrowers, new borrowers and those with few open accounts," with my situation being the latter. I'm guessing I'm getting dinged big time because I don't have a bunch of open accounts, and in fact, currently have zero revolving accounts since my Chase credit card was closed for inactivity. Once again I'm a BAD consumer for not having any credit card debt. Sigh.....

 

My wild guess is that Fico 08 greatly rewards those with lots of CLs, more so than the old scoring model did. In other words, it encourages consumers to have lots of (properly-managed) debt.

 

Again now I'm wondering, how do I get a credit card now that I suddenly went from having a very good Fico score to one that Fico considers 'not good'.? Am I really going to be stuck now with a secured CC??

 

It would have been SO nice to know ahead of time that they were making this change. Where's the fairness to your customers Fico? Just beyond frustrated right now...


How can FICO tell who  "subprime borrower" is?

May 2013 Starting Scores: 540's-570's [no credit cards, no inq's, 1 Student Loan 90 day late, CA's and CO's...most PFD'd!]
December 2014 Scores: 654-705 ...Oldest accounts just aged off! :/
Current Cards: SDFCU Secured ($300); Logix Secured ($500); Tobyhanna FCU ($5000); Sony Visa ($3000); Apple PC'd to Rewards MC ($1200); Barclay Rewards MC ($1300); B&N ($500); Discover ($1000); 'Credit Steps' ($2300), QS One ($750);Care Credit ($9000); US Bank Platinum ($5000); Fifth Third SU2C ($3000); Kay's/Jared's ($4700); Target ($1300); Fingerhut ($2150); **All my favorite retail cards ($45,650)..Luv'Em..they get heavy use!
Member
Posts: 16
Registered: ‎10-12-2012
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Re: Upgraded FICO score for no reason?

[ Edited ]

I have read through the page MyFico posts about how Fico 08 works, and found that page to be inadequate in explaining the information and helping people understand the differences. I think MyFico can do a much better job of providing information on their website than that webpage.

 

I had to take to Google to get the full, clear picture, which I am happy to share with posters here.

 

"FICO 08 will take a closer look at certain groups of borrowers who lenders need more help with risk prediction. This includes subprime borrowers, new borrowers and those with few open accounts,"

 

"The new score is supposed to do a better job of predicting borrower defaults, be more forgiving of one-time slipups and take a harder line on repeat offenders. The score, which will still range from 300 to 850 -- the higher, the better -- is fine-tuned to do a deeper analysis of subprime borrowers or those with "thin" or young credit histories, according to Fair Isaac. More consumers with accounts in good standing should also see their scores increase slightly, says Tom Quinn, vice president of global scoring solutions at Fair Isaac. Overall, Fair Isaac predicts FICO 08 will improve the accuracy of lending decisions by as much as 15%."

 

"...it will give a slightly higher score than previously to a borrower who is late on one obligation but current on multiple other accounts. Those with several delinquent accounts could find their credit score has dropped."

 

"FICO 08 will eliminate any impact of being an authorized user." (i.e. being an authorized user on a credit card won't benefit people anymore).

 

Tom Quinn, VP of global scoring for Fair Isaac says: "It's not necessarily [seen as] a bad thing to have a lot of debt," so FICO 08 will assume consumers use more credit now than before. (i.e having lots of trade lines and lots of credit is now weighed more heavily as a positive factor).

 

"For borrowers who are in behind on an account, their scores may drop less if they have a number of other credit accounts in good standing."

 

Here is a link to an interesting PDF that was produced from a webinar held by two directors for FICO. It contains some interesting points, specifically in the percentages of additional 'baddies' the Fico 08 model catches.

 

http://www.fico.com/landing/Webinar_PDFs/FICO08_Validation_Raises_the_Bar_on_Predictability.pdf

 

I'm sure there's a lot more information out there, that's all I could find after a quick search.

 

Hope this helps someone reading it understand the change.

 

Blogger
Posts: 3,360
Registered: ‎10-19-2012
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Re: Upgraded FICO score for no reason?

"More consumers with accounts in good standing should also see their scores increase slightly"

 

Makes sense. This is the strongest part of my credit profile, and I saw almost a 50 points bump. 

Moderator Emeritus
Posts: 11,917
Registered: ‎12-30-2011
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Re: Upgraded FICO score for no reason?

Doggiepants: there's a lot more to getting underwritten for anything tha one's credit score, but a 650 doesn't suck when it comes to the current credit market, and not every lender is using FICO '08 anyway.

 

I'd look at what cards you want and ask in the credit cards forum what the standards are, but if you have history on a prior chase card you're probably not that badly off as to need secured ones. 

 

Unless you have a major application coming up in the next call it six months (mortgage or auto) I'd simply apply for a few of the entry tier rewards card like a BOFA Cash Rewards, or a Chase Freedom if you still have a relationship with them though they might quibble about lack of recent history.  You probably only need 2-3 tradelines to satisify FICO's requirements, 3 is probably best so you can play reindeer games and build payment history faster.  Discover would almost assuredly play too.  Talk to a local credit union too, or pick one from the usual suspects on this forum (DCU, Alliant, SFDCU come to mind) and see about a card from them.  That should easily get you to three, but if you strike out, then do a small secured limit card with BOFA and SDFCU and call it good for a year, then pickup an Amex revolver or whatever else you have interest in.

 

Starting Score: EQ 04 561, TU 98 567, EX 98 599 (12/30/11)
Current Score: EQ 04 700, TU 04 731, EX 98 725 (05/24/15)
Goal Score: 700 on EQ 04 (01/01/16)


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Registered: ‎05-26-2014
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Re: Upgraded FICO score for no reason?

mine as well, I got the news that my score is upgraded and when I looged on, I found my score went down from 784 to 694 less 90 points. thats a lot of point to loose for no reason and now i started to think twice about how accurate is FICO

Member
Posts: 16
Registered: ‎10-12-2012
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Re: Upgraded FICO score for no reason?

Revelate- thank you so much for the information in your reply. That really helps a lot.

 

I think I'll app for a couple of cards and see where that gets me, then wait another 6-8 months for the inquiries to be less 'hard' and then app for another card or another installment loan (or both). My biggest problem is remembering to actually use credit cards, as I pay cash for everything and have had multiple cards closed for inactivity in the past. Maybe I just need to plan to get all of my gas with one card, and all of my drugstore needs with another. That way the utilization would be low, and the monthly payments would be very similar each month. It's hard for someone like me who is used to having zero debt to remember to accrue debt to play the credit score game! Thanks again for your reply. :-)

Established Contributor
Posts: 785
Registered: ‎04-24-2014
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Re: Upgraded FICO score for no reason?


doggiepants wrote:

Revelate- thank you so much for the information in your reply. That really helps a lot.

 

I think I'll app for a couple of cards and see where that gets me, then wait another 6-8 months for the inquiries to be less 'hard' and then app for another card or another installment loan (or both). My biggest problem is remembering to actually use credit cards, as I pay cash for everything and have had multiple cards closed for inactivity in the past. Maybe I just need to plan to get all of my gas with one card, and all of my drugstore needs with another. That way the utilization would be low, and the monthly payments would be very similar each month. It's hard for someone like me who is used to having zero debt to remember to accrue debt to play the credit score game! Thanks again for your reply. :-)


There has to be something in your life that you pay for on a regular basis.  Now days, even grocery stores take credit. If you plan on paying for gas with a card, then get a gas card.  Otherwise, gas stations charge an extra fee for credit.  Costco allows you to use AmEX..  

 

Other than that, do you have newspaper or gym subscription? You mentioned drugstore.  If you have a prescription of some sort, that has to be filled on a regular basis, some drug stores will allow you auto charge your card for prescriptions so that you can have others pick up for you and you don't have to carry it around. Walgreens allows it.  Anyway, find a bill that's regular and then set up the bill for auto-pay from your bank account.



Current Score: EX 839 EQ 794:TU 792 on 7/4/14; EQ from myfFico on 6-26-14
Starting Score: EX 751 EQ 720 TU 737 on 4/9/14
Goal Score: 800+ on all three Bureaus
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