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New Member
TomSeely
Posts: 2
Registered: ‎02-15-2013
0

Nice Scam

1. In your listing of accounts you should indicate which accounts are closed

2. My Fico score is 768 and your simulator says if I pay off all my accounts I'll be 778-818. Your system knows I pay off all of those accounts entirely every month and have for many, many years (except for one 15 year mortgage). So the simulator has no guidance. The rest of the site suggests closing accounts because I have temporary balances on 7. The simulator should say how many accounts to close (e.g. have just 2 national accounts and 0 department stores - sorry Kohls, Fico thinks you're bad).

3. I refinanced last July and now have 6 credit inquiries from the same event, and 4 from the same company. The auto insurance that I pay in full, so there is no extension of credit, increased my rates because I did a refi last summer and I had a Home Depot card from a remodeling project 2 years ago. No driving violations or claims, but I'm a credit risk even though they're not a creditor and I have a clean history.

4. You still have a long way to go in painting an accurate picture of my profile. Start with tracking accounts that are paid in full every month and saying how many credit cards you think we should have.

5. To anyone watching, lesson learned, just get 2 national credit cards, 1 primary and 1 backup when the primary gets rejected because their systems think its time for a security check. I would like to know what the score would be if I just use debit cards.

6. Your website should do a better job of showing I could send you an email directly. I don't mind sharing, but you could be doing an even better job.

Valued Contributor
Scamp
Posts: 2,791
Registered: ‎03-18-2007
0

Re: Nice Scam


TomSeely wrote:

1. In your listing of accounts you should indicate which accounts are closed

2. My Fico score is 768 and your simulator says if I pay off all my accounts I'll be 778-818. Your system knows I pay off all of those accounts entirely every month and have for many, many years (except for one 15 year mortgage). So the simulator has no guidance. The rest of the site suggests closing accounts because I have temporary balances on 7. The simulator should say how many accounts to close (e.g. have just 2 national accounts and 0 department stores - sorry Kohls, Fico thinks you're bad).

3. I refinanced last July and now have 6 credit inquiries from the same event, and 4 from the same company. The auto insurance that I pay in full, so there is no extension of credit, increased my rates because I did a refi last summer and I had a Home Depot card from a remodeling project 2 years ago. No driving violations or claims, but I'm a credit risk even though they're not a creditor and I have a clean history.

4. You still have a long way to go in painting an accurate picture of my profile. Start with tracking accounts that are paid in full every month and saying how many credit cards you think we should have.

5. To anyone watching, lesson learned, just get 2 national credit cards, 1 primary and 1 backup when the primary gets rejected because their systems think its time for a security check. I would like to know what the score would be if I just use debit cards.

6. Your website should do a better job of showing I could send you an email directly. I don't mind sharing, but you could be doing an even better job.


   Regarding Item #1:  The open/closed account status (for credit accounts, at least - I don't have anything else on my own reports, so I can't speak for loans and such) is noted in the Details pop-up brought up when you click on the Details link next to the account line item in your main accounts listing page on your report.

  Regarding Item #2:  No, it doesn't - the scoring algorithms only 'know' the information reported to the credit bureaus by your creditors.  In the case of credit card lenders, report dates vary somewhat, but if you wait until after your statements cut to pay off your CC balances (as most of the world probably does), then chances are those balances are what's being reported to the bureaus and are the only info the scoring algorithm has to work with.  Before I learned how to manage my own reported utilization better for scoring purposes, I tanked my score WAY down by maxing out a card.  If you're using a large portion of your credit lines, and if your creditors are reporting those balances before you pay them off every month, then yes, it's going to negatively impact your score.  The way to manage that is to pay off balances before they get reported.  There's more info about this on the Understanding FICO Scoring boards and Credit Cards boards.

 

I'll have to leave it to others to address your remaining items, though the above also partially addresses #4, as well - FICO scoring can only factor in the info it's provided by your lenders, and right now, lenders don't provide info on who pays accounts in full every month.  You can achieve this as I described above, but only if you determine your reporting dates and pay your balances accordingly to ensure zero balances are reported.

Hope this helps.

 

 

_____________________________________________________________________________
It's never too late to become the person you might have been. ~George Eliot

02/12/09 EX: 701 / 02/08/10 EQ: 719 / 02/08/10 TU: 723

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New Member
TomSeely
Posts: 2
Registered: ‎02-15-2013
0

Re: Nice Scam

Hi Scamp,

 

Thanks for your thoughts. Here’s some follow up information.

 

  1. The observation that the listing of accounts should include the number of closed accounts was an enhancment recommendation – rather than a request on where to find the info. For example, under my “Credit-At-A-Glance” section, it shows Total number of accounts: 18, and total with balances: 7, etc.  No where in that summary section does it indicate that 10 of those accounts are closed.  If the entire purpose of the report is to profile risk, then the number of open accounts would certainly be relavent information. I’m fine having lifetime totals too, but not having total open accounts I submit is an incomplete profile.
  2. I asserted that the system knows that I’m paying off all of my credit cards in full every month, and you disagreed with that statement. So riddle me this. When I look at my TransUnion report, every account I have that’s been active since 2011, shows by month the balance and the amount paid. That’s across creditors: Chase, Amex, GE, CapitolOne…  Each one of those tables on the report tells the same story, the amount paid in the next month equals the balance of the previous month.  Perhaps our disagreement is on whether the scoring algorithm should know – or bother to calculate – that I pay all of those balances monthly. I submit that’s very relavent information – and the Fico Simulator agrees with me. The advice of the simulator was to boost my score from 768 to 818, just pay off all of my credit cards.  My point, Fair Isaac already has, or could have, the information it needs to make that determination. Your point about paying accounts off before their reported is noted but is more of a cop out. That kluge actually makes the history less clear because of timing and automatic charges that may post on the date of the statement close. As is, the numbers on my TransUnion report match to the penny, balance one month is the amount paid during the next month.
  3. Interesting that my auto and home insurance increased because of too many inquiries (6) due to a single refi last summer, and it’s obvious that 4 of them were from the same vendor for the same transaction, while the other 2 were competitors for the same transaction. In fairness, the negative scoring on that report came from LexisNexis and not Fair Isaac, but absent any indication that FICO personnel care about whether the negative treatment of inquiries for a refi is appropriate to justify increased insurance risk – when the premiums are paid in full and the insurer is not a creditor – I’m left to conclude that both companies are working a scam with the insurers. I’m actually hoping for an indication that someone at Fair Isaac is interested in how the scoring could/should be improved around these issues, so that the insurance scam I mentioned with AAA is limited to the LexisNexis report rather than lazyness or collusion on the part of the whole industry. I’d much prefer to use Fair Isaac as an example of a company that gets integrity.

I’ll be following up with the state and feds on the insurance issues because that’s ultimately where the oversight resides. I’m just sharing the experience here in hopes that the product owners at Fair Isaac will be inspired to do the right thing and fix the scoring to consider whether accounts are being paid in full every month. I’m a big data guy so I know the issues, and I've known good people that have worked at Fair Isaac. The essential ingrediant that's missing is caring about what the credit risk profile should be indicating.

Moderator
Shogun
Posts: 12,952
Registered: ‎04-15-2011
0

Re: Nice Scam

Hello and welcome to the forums.

 

You do make some good points, however I do see some problems with your logic.

 

1.  You are receiving credit for your closed accounts.  Closed accounts will factor in for 10 years once they are paid adding to the AAoA of your account.  However since this account is now closed,  you will not get the util figured in.  The number of open accounts figures in on how well you manage those accounts.  For example, someone with 10 open accounts and handles them correctly would get more credit than someone that only has 2 open accounts.

 

2.  I'm sure they could figure that you are paying in full every month.  But that's not the issue.  Your FICO score is a snapshot of what  your CR has on it when it's pulled.  FICO has no memory.  It works the other way too.  If you were carrying a high util for months, and suddenly paid them down, you would see a significant score boost.  Since FICO doesn't have a memory, you're not penalized for having past high balances.

 

3.  OK, I must admit this one has me at a loss too.  My Insurance risk always seems to be going up.  The higher my scores, the worse my insurance rating.  I have no idea why.  I do know that it is very sensitive to Inquiries.  An inquiry will tank this score.  I guess they think you're apping while driving, I have no idea.

 

FICO will take all the Inquiries within a specific time period for mortgage and auto shopping into account and score them as one Inquiry.  They will still show on your CR but will only be scored as one.  I cannot say the same for Lexis Nexus, I'm not too familiar on how they score.

 

The simulator is for educational purposes only.  Don't take any credit simulator from any site as concrete.  

 

Good Luck.  :smileyhappy:


Starting Score: 504

July 2013 score: EQ FICO 819, TU08 778, EX "806 lender pull 07/26/2013
Goal Score: All Scores 760+, Newest goal 800+

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Moderator Emeritus
llecs
Posts: 32,881
Registered: ‎08-04-2007
0

Re: Nice Scam

I'll add...

 

On #1, per FICO scoring, it really doesn't matter if they are opened or closed. Any account reported as closed with a balance still is scored as if it were open. In other words, risk is the same opened or closed. For example just a couple short years ago for some, CCs were closing accounts left and right due to what they see in a given profile (e.g. high ongoing balances, baddies, new accts, etc.). Even when closed, these CCs still factored fully into your score including into your CC utilization; it didn't matter if they were opened or closed per FICO or future lenders. Adding further, once the account is paid off, the only thing that gets removed from FICO scoring is the balance and CL of that CC. Lenders and FICO will still fully score and factor in the payment history, length of history, account type, and many others regardless of the closed status. Touching on your #2, closing a CC is generally a bad idea. It won't help your FICO or risk as viewed by most lenders (mortgage lenders maybe an exception; YMMV on the lender). In fact, closing a CC will generally lower your FICO if you carry any sort of balances on your other CCs. I'll skip the simulator part though; not too familiar.

 

On #3, the insurance score isn't based soley off credit. There are other factors as pointed out like driving experience. It can also go up for reasons not linked directly to you. For example, my Allstate policy recently increased despite having better scores/credit and zero driving issues. The reason given was that insurace costs have gone up industry-wide and they had to pass the cost to me. Makes sense even though I don't like it. Increased regulation, costs and fees on their end have to be spread to the end user otherwise they'd go out of business. I'm a biz owner too and have to do the same.

 

On #4+5, there's no right answer to the number of recommended CCs. There are folks in here who are in the 800s with only 3 CCs. And there are folks in here in the 800s with 20+ CCs. Now a mix of credit like you have is important for a higher score. But anything beyond 3, IMO, is gravy and having lots of cards won't hurt your FICO (adding a bunch and their age aside if new). My credit history is younger relatively speaking, but I hit 777 on EQ FICO with 22 open CCs, 3 closed CCs, one open personal loan, and two closed car notes. As mentioned by Scamp, FICO only scores what is reporting. So, if you only use a debit and close and pay off every account, then your FICO score would go away. 

 

I'd be opposed to #6. I'm critical of any credit-related CSR, including the CSRs from myFICO. They don't know zilch about credit and FICO scoring. Sometimes I'll see a seldom post in here of good advice given, but most of the time they are wrong. If there was a mechanism by which to e-mail myFICO I would be afraid that they would give bad advice, or even worse, advice that can harm your FICO score. The advice within the forums is better and everyone seems to have an interest in helping everyone else.


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