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Is FICO worth it

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Thomas_Thumb
Senior Contributor

Re: Is FICO worth it


@elim wrote:

@iv wrote:

@elim wrote:

Great Post

 

I'm very outspoken on this topic (so much i wonder how i'm not banned sometimes). I despise their scoring model.  Some wonder if It is either a complete joke or they are in bed with big banks.  


Well, yeah. That's kinda the point - the primary customer for any credit scoring model is... lenders.  Risk management to maximize profit in lending operations.  That shouldn't really be news to anyone here.

 

But if by "in bed with" you mean something like "conspiring to keep everyone's credit scores as low as possible"?

 

No.

 

That would defeat the entire purpose of the scoring model - and banks would stop using a model that failed to provide a useful risk management scale.

 

(Despising how a scoring model treats your individual file or pattern of credit use doesn't invalidate the model, sorry.)

 


@elim wrote:

There are so few data points in a credit file, any statistics major and programmer could write a better scoring model.  


Err... no. Just no.

 


@elim wrote:

At least their forums are good (and their profit).


Very true. (On both counts.) 

 


  errr yes Just yes.  It isn't MIT poker bot class.  All anyone needs is the CR's. They contain the Default rates.  Parse away.

 

 And I would bet when done... After the consumer paid off an auto loan (after paying on the 25th day of every month for 4 years) his/her scores would NOT have a major drop due to being a greater risk. The only reasons a score would drop is if the writers were to lazy to include the closed account and payment history (can't see that happening) or someone receives some benefit for causing an increased lending rate.

 

Many experience a 35 point drop after paying off their auto loan.

 

850 - 300 = 550 scoring range

35/550 = 0.06

 

6% greater risk for historically paying on time? and ready to purchase a new vehicle? What?  This screams sheep.

 

 

I also wonder why it takes years to roll out a completed scoring model that benefits the consumer.  Every other piece of major software in our lives updates daily.  

 

 ETA

 

"That would defeat the entire purpose of the scoring model - and banks would stop using a model that failed to provide a useful risk management scale." 

 

lol, There you go. It is VERY useful for the banks. greater profits.


Probably skitish over potential class discrimination  lawsuits. 

Fico 9: .......EQ 850 TU 850 EX 850
Fico 8: .......EQ 850 TU 850 EX 850
Fico 4 .....:. EQ 809 TU 823 EX 830 EX Fico 98: 842
Fico 8 BC:. EQ 892 TU 900 EX 900
Fico 8 AU:. EQ 887 TU 897 EX 899
Fico 4 BC:. EQ 826 TU 858, EX Fico 98 BC: 870
Fico 4 AU:. EQ 831 TU 872, EX Fico 98 AU: 861
VS 3.0:...... EQ 835 TU 835 EX 835
CBIS: ........EQ LN Auto 940 EQ LN Home 870 TU Auto 902 TU Home 950
Message 11 of 13
elim
Senior Contributor

Re: Is FICO worth it


@Thomas_Thumb wrote:

@elim wrote:

@iv wrote:

@elim wrote:

Great Post

 

I'm very outspoken on this topic (so much i wonder how i'm not banned sometimes). I despise their scoring model.  Some wonder if It is either a complete joke or they are in bed with big banks.  


Well, yeah. That's kinda the point - the primary customer for any credit scoring model is... lenders.  Risk management to maximize profit in lending operations.  That shouldn't really be news to anyone here.

 

But if by "in bed with" you mean something like "conspiring to keep everyone's credit scores as low as possible"?

 

No.

 

That would defeat the entire purpose of the scoring model - and banks would stop using a model that failed to provide a useful risk management scale.

 

(Despising how a scoring model treats your individual file or pattern of credit use doesn't invalidate the model, sorry.)

 


@elim wrote:

There are so few data points in a credit file, any statistics major and programmer could write a better scoring model.  


Err... no. Just no.

 


@elim wrote:

At least their forums are good (and their profit).


Very true. (On both counts.) 

 


  errr yes Just yes.  It isn't MIT poker bot class.  All anyone needs is the CR's. They contain the Default rates.  Parse away.

 

 And I would bet when done... After the consumer paid off an auto loan (after paying on the 25th day of every month for 4 years) his/her scores would NOT have a major drop due to being a greater risk. The only reasons a score would drop is if the writers were to lazy to include the closed account and payment history (can't see that happening) or someone receives some benefit for causing an increased lending rate.

 

Many experience a 35 point drop after paying off their auto loan.

 

850 - 300 = 550 scoring range

35/550 = 0.06

 

6% greater risk for historically paying on time? and ready to purchase a new vehicle? What?  This screams sheep.

 

 

I also wonder why it takes years to roll out a completed scoring model that benefits the consumer.  Every other piece of major software in our lives updates daily.  

 

 ETA

 

"That would defeat the entire purpose of the scoring model - and banks would stop using a model that failed to provide a useful risk management scale." 

 

lol, There you go. It is VERY useful for the banks. greater profits.


Probably skitish over potential class discrimination  lawsuits. 


   lol, You are probably right.    "all financial lives matter"    ;]

Message 12 of 13
Anonymous
Not applicable

Re: Is FICO worth it

Fico is awesome when my scores are over 800 and the whole system including politics suck when I drop below prime rates.

 

Might as well argue if ice is wet.

 

We know the basics - pay and wait. I have to give kudos to fico for at the very least, bringing me this entertaining thread. Peace!

Message 13 of 13
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