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Posts: 1,257
Registered: ‎07-18-2009
Re: CFPB released a report comparing FAKOs, FICOs, and VantageScore

Revelate wrote:

I don't know; the auto-enhanced option being 0.99, 0.95, 0.99 respectively just appears to be laughably off unless out of 200k consumers, 99% of them had an auto-loan on their record.  I can't imagine that's the case.  The "first-time-buyer" penalty is so well known, I just find it shockingly remote that the correlation is that high.  


Either everyone is using FICO '08 versions for auto and possibly bankcard enhanced industry specific options that the FICO '04 ones in the study are irrelevant, or something just doesn't seem right with their analysis on that honestly.  Granted anecdotal evidence isn't proof of anything, but at least on the auto forums it comes up over and over and over again to the point it's simply accepted as near absolute truth.  In credit card approvals we also see a wide variation from the best FICO '04 baseline we have available, namely myFICO's EQ Beaction 5.0 (also provided by DCU), and the longer term members who have access to their EX V2 score from PSECU, also seems to disagree with their results as GregB suggests.


To start with, only one of the three CRAs correlate at .99,   The other two are .98 as well as .95. 


But yes, overall it seems surprisingly high. In my own case the scores I had just a year ago were way outside that expected from the published correlations.I had a Plus score that was well above the 90 percentile while EQ FICO was at 40 percentile. This is an extreme rarity according to the report's data.


There's another factor at work here. .99 or .98 let alone .95 correlation does not mean the scores are all that close. It allows for a significant number to be quite different from the decile they are compared to. If you look at FAKO/FICO comparisons that correlate at .93 there is more than a 50% chance the scores will be in different deciles and that can map to material FICO score deltas. Especially at the lower end. .99 could still be correct if the differences are skewed towards a small group, the very young just starting out in both credit and first auto.  That combo of short CC history and no auto loan would inidcate beginning driver and that's where the risk differential is.


I have reestablished credit over the last couple years
so my moniker is, well, rather out of date.

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