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Model Doesn't Adequately Exclude Outliers

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Model Doesn't Adequately Exclude Outliers

I used to work for FIC on the Falcon Fraud product.  I had a FICo score of 815.  In 2001 I moved from one city to another in San Diego County.  In the midst of our move, I missed paying a chiropractor bill of $60.  It was questionable if the doctor ever sent the bill, as ALL of my other mail was forwarded to the new address.  I know this because my previous roommate (and best friend) was still at the old address.  The doctor sent the item to American Agencies, probably the most notorious collection agency in the world.  I didn't find out about the unpaid bill until 2003 when I went to do a routine check of my credit and found that my score was 565.  I was horrified.  The only negative item was this stupid bill for $60.  I called the doctor, American Agencies,  FIC, Experian, etc.  I tried to negotiate paying the bill and having AA remove the charge-off completely.  They agreed.  I paid.  Then they didn't comply.  It has taken the last 4 years almost for my score to crawl back up to 735. 
 
The moral of this story is that the modelers on the FICO side of FIC are friggin idiots.  Their models obviously do not compensate for outliers such as the single instance of negative behavior constituting a very low dollar amount.  The other thing that is not equitable for consumers is that we are completely at the mercy of credit companies.  We have no recourse other than costly lawsuits to force compliance. 
 
In the end, I am sure the doctor paid American Agencies a decent fee to handle my unpaid bill.  Maybe $20.  So, they reported me and ruined my credit for a $40 profit.
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3 REPLIES
Moderator Emeritus

Wow!! One colelction item dropped your score by over 200...

Wow!! One colelction item dropped your score by over 200 points?  I find that hard to believe.  Maybe its just that my scores are not that high and the only collection I saw the direct result of dropped me by only 50.  A 200 point drop sounds more like a BK.  How many times was the debt sold?  How many different times did it show up on your credit reports over that 3yr span?  My best friend filed bk and went from 790 to just over 600.
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Frequent Contributor

credit scores in points

How do you tell how many points you loose per item. Is there like a set amount for one item like a Bankruptcy or charge off.
Message 3 of 4
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Moderator Emeritus

A Lot of it depends on where you were BEFORE the problem....

A Lot of it depends on where you were BEFORE the problem.  I've seen people file BK and still be in the 6's because they were smart enough to file BEFORE the creditors started banging down the door.  The result was that other than the bankruptcy, they only thing reporting on their acounts were accounts in good standing.  Now on the other side is me not know ing it was smarter to file when I realized I was in trouble, I waited until I had no choice.  After BK I found myself in the 400s.
 
Scores and histroy have a lot to do with how badly or how little a ding will affect your score.
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