topic Re: Has anyone confirmed the FICO $600 rumor....? in Credit Cards

Has anyone confirmed the FICO $600 rumor....?

Kratos-TM — Thu, 21 Nov 2013 15:16:11 GMT

In the "760+ High Achievers" thread, there is a post that stated FICO wrote "the average FICO high acheiver has a balance of $600 dollars or less on their total revolving accounts".....

Has anyone confirmed this?......Does FICO want the balance we leave on that one card to be less than 600 even though 600 may be less than 1% uti on it?

Re: Has anyone confirmed the FICO $600 rumor....?

Anonymous — Thu, 21 Nov 2013 15:25:10 GMT

There's a distinction to be made between (1) an "average", and (2) a rule that's encoded in the FICO scoring algorithm.

There's also an argument on the other side of this issue -- CC companies are interested in seeing some signs of life, and this may be a major factor in getting a CLI.

Re: Has anyone confirmed the FICO $600 rumor....?

KoolDev — Thu, 21 Nov 2013 15:27:42 GMT

Interesting. I have not seen the thread ( hadnt been to it yet ).

Re: Has anyone confirmed the FICO $600 rumor....?

Kratos-TM — Thu, 21 Nov 2013 15:43:05 GMT

@KoolDev wrote:
Interesting. I have not seen the thread ( hadnt been to it yet ).

It is a very large thread that began back in 2007. Lots of awesome info in it if you can stomach reading all 45 pages.

Re: Has anyone confirmed the FICO $600 rumor....?

Walt_K — Thu, 21 Nov 2013 16:25:56 GMT

@Kratos-TM wrote:
In the "760+ High Achievers" thread, there is a post that stated FICO wrote "the average FICO high achiever has a balance of $600 dollars or less on their total revolving accounts".....

Has anyone confirmed this?......Does FICO want the balance we leave on that one card to be less than 600 even though 600 may be less than 1% uti on it?

The fact that the average high achiever has a balance of less than $600 is an observation about those customers, but it doesn't mean that getting your balance to less than $600 is causally related to your FICO score. It's the same kind of fallacy with the CK credit report card that gives you an A for having 30 accounts or whatever the number is because the average person with good credit has a lot of tradelines.

Also, utilization is rounded up for FICO purposes. So any utilization is considered 1%.

Re: Has anyone confirmed the FICO $600 rumor....?

lg8302ch — Thu, 21 Nov 2013 16:34:33 GMT

I would not think it has a scoring effect. My balance reported on two accounts were above and score did not take a ding...at least for Equifax. Only way to find out is report 1 account with less than 600$ and see the impact. Might do that before my next planned app...

Re: Has anyone confirmed the FICO $600 rumor....?

Kratos-TM — Thu, 21 Nov 2013 16:34:49 GMT

@Walt_K wrote:
@Kratos-TM wrote:
In the "760+ High Achievers" thread, there is a post that stated FICO wrote "the average FICO high achiever has a balance of $600 dollars or less on their total revolving accounts".....

Has anyone confirmed this?......Does FICO want the balance we leave on that one card to be less than 600 even though 600 may be less than 1% uti on it?
The fact that the average high achiever has a balance of less than $600 is an observation about those customers, but it doesn't mean that getting your balance to less than $600 is causally related to your FICO score. It's the same kind of fallacy with the CK credit report card that gives you an A for having 30 accounts or whatever the number is because the average person with good credit has a lot of tradelines.

Also, utilization is rounded up for FICO purposes. So any utilization is considered 1%.

Well, my balance has always been $675. That's what I make sure I leave it on every month (CL on that card is 30,000). Heck, I figure I could just reset set it to sit at 500 and see what happens.......kind of like an experiment.......can't hurt.......LOL. 1 point gain is still gain. LOL

Re: Has anyone confirmed the FICO $600 rumor....?

Anonymous — Thu, 21 Nov 2013 16:43:11 GMT

One of the problems with FICO using a hardwired value like $600 is that it would be meaningful for some people (those who have low CLs), and meaningless for lots of others.

One of the things that distinguishes FICO from FAKOs is the quality of the scoring model, and I expect that means that the designers of the algorithm have been ruthless about weeding out factors that have minimal predictive efficacy.

Re: Has anyone confirmed the FICO $600 rumor....?

Kratos-TM — Thu, 21 Nov 2013 16:51:31 GMT

@Anonymous wrote:
One of the problems with FICO using a hardwired value like $600 is that it would be meaningful for some people (those who have low CLs), and meaningless for lots of others.

One of the things that distinguishes FICO from FAKOs is the quality of the scoring model, and I expect that means that the designers of the algorithm have been ruthless about weeding out factors that have minimal predictive efficacy.

I think this is true in the newer models (08 versions), because I have seen many posts where the 08 models are not dinging people for reporting more than 1 card with a balance. But this thread I mentioned was started in 2007, so obviously they are referring to the 04 models. Maybe older models have "tight" rules....

Re: Has anyone confirmed the FICO $600 rumor....?

Anonymous — Thu, 21 Nov 2013 16:53:17 GMT

@Anonymous wrote:
One of the problems with FICO using a hardwired value like $600 is that it would be meaningful for some people (those who have low CLs), and meaningless for lots of others.

One of the things that distinguishes FICO from FAKOs is the quality of the scoring model, and I expect that means that the designers of the algorithm have been ruthless about weeding out factors that have minimal predictive efficacy.

I agree with this. I think that the FICO algorithms are far more complex than factoring in a hard $600. It's more likely related to percentages and ratios and such.

Re: Has anyone confirmed the FICO $600 rumor....?

HiLine — Sat, 23 Nov 2013 23:46:52 GMT

@Kratos-TM wrote:
In the "760+ High Achievers" thread, there is a post that stated FICO wrote "the average FICO high acheiver has a balance of $600 dollars or less on their total revolving accounts".....

Has anyone confirmed this?......Does FICO want the balance we leave on that one card to be less than 600 even though 600 may be less than 1% uti on it?

As they say, correlation does not imply causation...

Re: Has anyone confirmed the FICO $600 rumor....?

Walt_K — Sun, 24 Nov 2013 01:31:03 GMT

@HiLine wrote:
@Kratos-TM wrote:
In the "760+ High Achievers" thread, there is a post that stated FICO wrote "the average FICO high acheiver has a balance of $600 dollars or less on their total revolving accounts".....

Has anyone confirmed this?......Does FICO want the balance we leave on that one card to be less than 600 even though 600 may be less than 1% uti on it?
As they say, correlation does not imply causation...

^This.