12-17-2012 11:11 AM
My most recent score alert showed a 666 credit score that dropped about 25 points because of recently applications and increased utilization which is normal for me this time of year. I recently applied for a few credit cards and was approved and even reconed one card for a higher initial CL. I haven't applied recently but noticed that more than likely due to the credit card laws that were passed in the past year or so that they now give you a credit score on your application? One card was from a credit union and another was a Walmart Discover card. WM pulled EQ but the credit union pulled TU. My report from myfico was 11/28. Nothing has changed on my report except for a few more inquiries and added tradelines so my score should FALL instead of increase, one would think. However my TU score according to the credit union was 713, quite a different from 666.
I have also noticed these differences over the past year or so as compared to myfico. I could see if I was applyihng for a car as they use a different score weighted primarily on past car note payment history.
So what gives? Is having the service even worth it anymore especially if institutions are not using the same TU scoring algorithm as myfico?
12-17-2012 01:02 PM
As I understand, all FICO algorithms are very similar, to the extent that they share the same variables. The weight on each variable is different, depending on the type of risk the score will be used to evaluate, as well as how up-to-date the model is.
12-17-2012 02:05 PM
Doesn't really explain the HUGE difference in scoring. I could see if this was for a mortgage using a middle score or for a car but NOT for credit cards.
12-17-2012 05:04 PM - edited 12-17-2012 05:04 PM
Your statement is completely flawed when you generalize "institutions" since they use many different scores from TU.
Lenders that pull a score from TU use a variety of FICO scores. Some use the Classic 98 provided here. Mortgage lenders almost all use the next version of that, called Classic 04. Some others use the latest FICO 8 (not called "classic" anymore). There is also one earlier version of FICO that is rarely used, FICO 95. There are also industry enhanced scores of each, the most common of which are CC and Auto. Add in the two FICO Nextgen scores and there are 21 different TU FICO scores used by lenders.
The TU FICO Classic 98 is the most useful TU score available to the public. It would be more useful if they offered the next version, TU FICO Classic 04.
I find the EQ FICO sold here to be far more valuable than the TU FICO but there isn't a better TU FICO available anywhere else.
12-17-2012 08:24 PM - edited 12-17-2012 08:57 PM
I guess what I am getting at is that unless the institution you are attempting to get credit from doesn't use the same algorithm as myfico then in reality the service is pointless. 10-15 point swing, ok. 50 point swing is something completely different. Either that or just standardize the scoring algorithm and be done with it.
Just as a reference point, I accessed my TU08 score via Walmart and it is 703. So just guessing but I would imagine the credit union pulled my TU04 at 713. Assuming it is TU04 that means that the TU08 and TU04 are a 10 point swing. No big deal. However, I don't think anyone would consider 47 points to the assumed TU04 to be a small swing especially when according to the score report the difference in "risk" as seen by banks using the TU98 from 666 to 713 is significant.
I can see why it really pays off to recon a credit decision now especially if the institution is using an archaic scoring model as situations aren't always painted properly in the computer decision. In reality though I guess credit algorithms are probably devised based on the currrent economic climates as it relates to risk assessments. Standardization really should be considered across the board although risk assessment threshholds would vary per institution as what they deem to be acceptable...
12-18-2012 07:00 AM
If your TU98 is 666 and TU8 is 703, I would be surprised if your TU 04 is 713. Does the letter have any more info on it such as the word FICO, a score range, or anything else?
Credit Union do seem more likely to use a Classic FICO than an Industry enhanced FICO but perhaps yours is not a Classic.
Personally, I would consider the EQ FICO here to be worth 5 times what the TU FICO is worth since it is getting to be too out of date. The TU scores here are still way more valuable than paying for a FAKO but I don't consider them to be worth buying in general. I would be likely to switch products to EQ and tell myFICO why you are changing.
Are your EQ and TU reports similar? If so, Is your EQ FICO 04 around 703-713?
12-18-2012 11:16 AM
I just looked at my application for a credit card from CEFCU which included a cover sheet that talks about credit and credit scoring and how it impacts the decision making process. At the top it says "your credit score", Source: Transunion, Date 12/12/12 and the score of 00713. Score range 350-900.
Now walmart processed my discover application using EQ as per their legal stuff that was sent with the actual card. My credit score rom EQ is 703.
I am attempting to ask CEFCU underwriting what scoring algorithm they used but have been on hold forever. It appears that it is the equivalent of asking a differential equations question,; that or they don't want to admit what algorithm they use. I am waiting for the word "proprietary" to come out of her mouth...
12-18-2012 11:34 AM - edited 12-18-2012 11:36 AM
I doubt most would know, let alone disclose the algorithm.
Are you sure it says the range is 350-900, not 250-900? All Industry Option versions of FICO98, FICO04, and FICO8 scores have a design range of 250-900 since the Industry Option Scorecards can add or subtract up to 50 points from the design range of 300-850 of Classic FICO scores. None of the 51 TU scores provided to lenders have a design or actual range of 350-900 so if it is that range, it is a proprietary score. Many proprietary scores are based on a FICO with a further modification that is proprietary.
12-18-2012 01:14 PM
Disclosing the algorithm won't really do much unless you had access to every component in the algorithm and then in some way were able to figure a way to manipulate them. Fat chance. Again, this is why it should be nearly illegal for companies to use scoring methods that vary because it is in theory possible to discriminate.
Regardless, I am 100% confident in my ablity to read the paper that was sent to me. It indeed says 350-900 as the range, transunion as the pull and 00713 as the credit score. After talking with people who appeared to not understand what I was asking them, they further referred me to Transunion to ask them what algorith was used. That further makes me wonder if they understood what I was asking them.