topic Re: Has Fico Changed the way it scores? in Understanding FICO® Scoring

Has Fico Changed the way it scores?

Anonymous — Thu, 11 Oct 2007 17:31:38 GMT

I've been getting our score every year since 2001 and with very hard work, it has gone up every single year. Last year's score was 781. I just did this year's and it dropped to 748!!!! Nothing has changed except we owe $8,000 LESS money than last year and one less account with a balance. What's going on here!!! No new accounts opened. No inquiries. No judgements etc. Everything on the report seems accurate so why the drop? Does anyone know?

Re: Has Fico Changed the way it scores?

Anonymous — Fri, 12 Oct 2007 02:34:55 GMT

Did any old accounts age off?

Remember, once you get above the mid-700s, you're well above average, and the FICO scoring system "wants" to trend you toward the mean. This is why, for example, a 30-day late that would have dinged you 20 points with a 597 score hits you with 40 or 50 points of damage if your score is 785, and 60 points or more if you're sitting pretty at 840.

Points of damage...hmmm...reminds me of my Dungeons and Dragons days...

DUNGEON MASTER: "Coming from around the bend are 4 orcs and a bugbear."

PLAYER: "Uh-oh. I pull out my wand of bad credit and hit them with a 90-day late"

(gasps from around the gaming table)

DUNGEON MASTER: "Time to roll initiative...oops...you lost...and the bugbear is actually a COLLECTION AGENT in disguise...he hits you with a charge-off...how many FICO points did you say you had?"

PLAYER: "Uh...I think I'm dead..."

Message Edited by TheNewWorldMan on 10-11-2007 07:34 PM

Re: Has Fico Changed the way it scores?

Anonymous — Fri, 12 Oct 2007 04:00:30 GMT

Maybe they added new buckets. I've noticed some changes recently and thought the same thing because certain actions are triggering different scores lately on my profile. But I've had so many changes I could have pushed my self in to a very different bucket. When AU's start posting that their scores dropped that's when they changed it. I am sure we will hear about it. So probably no changes. But I don't know. I just know for sure my actions are triggering different scores.

Re: Has Fico Changed the way it scores?

smallfry — Fri, 12 Oct 2007 09:21:08 GMT

Next year. No changes yet on the scoring.

Re: Has Fico Changed the way it scores?

Anonymous — Fri, 12 Oct 2007 13:29:21 GMT

This whole thing is really bugging me. If no known changes have been made regarding the way FICO sets the score then I am flummaxed!!

2006 Score 781

Positive Factors

No late payments

Long Credit History 31 Years

Low Proportion of Balances to credit limits

Negative Factors

Most Recent Account Opening is very recent

2007 Score 748

Positive Factors

No late payments

Long Credit History 32 Years

Have Limited Use of Available Credit

Negative Factors

Too many credit cards carrying balances [Lower than last year]

Amount Owed on revolving accounts is too high [Lower than last year]

Same number of accounts as last year with one less account having a balance.

I keep thinking I'm going to get an email from them saying "We're Sorry, we meant to say 784!!!

Re: Has Fico Changed the way it scores?

Anonymous — Fri, 12 Oct 2007 13:58:36 GMT

Maybe a new score card?
Put one more of the CC's to $0 and see if it makes a difference.

@Anonymous wrote:
This whole thing is really bugging me. If no known changes have been made regarding the way FICO sets the score then I am flummaxed!!
2006 Score 781
Positive Factors
No late payments
Long Credit History 31 Years
Low Proportion of Balances to credit limits
Negative Factors
Most Recent Account Opening is very recent
2007 Score 748
Positive Factors
No late payments
Long Credit History 32 Years
Have Limited Use of Available Credit
Negative Factors
Too many credit cards carrying balances [Lower than last year]
Amount Owed on revolving accounts is too high [Lower than last year]
Same number of accounts as last year with one less account having a balance.
I keep thinking I'm going to get an email from them saying "We're Sorry, we meant to say 784!!!

Re: Has Fico Changed the way it scores?

Anonymous — Fri, 12 Oct 2007 14:48:25 GMT

I forgot to mention in my previous posts that this score is actually lower than my previous 3 scores!!

2004~751

2005~754

2006~781

2007~748

I am extremely **bleep** when it comes to my finances and I keep track of my spending right down to a catagory for "office supplies:ink" in my Quicken. I do not subscribe to any credit reporting agency but simply pay the $15.95 for a report once a year. I've always used the Equifax at Fico. I'm not sure what I should do at this point or whether I should just shrug and wait another year to see if it changes.

Re: Has Fico Changed the way it scores?

Anonymous — Fri, 12 Oct 2007 15:21:56 GMT

If you are really curious- and/or concerned about your scores. I would sign up for a monitoring service.

http://www.coastalfcu.org/credit_reports.htm

Also pull all three free annual credit reports from annualcreditreport.com

You also need to remember you are being rated with your peers - So it isn't that you are doing a poor job of managing your credit, it's that your peers with the same long history, and low CC usage have changed.

Given the stats you provided why aren't you at 800?

Re: Has Fico Changed the way it scores?

Anonymous — Fri, 12 Oct 2007 18:39:09 GMT

Great EQ link!!! Thanks.

Re: Has Fico Changed the way it scores?

Anonymous — Sat, 13 Oct 2007 12:45:13 GMT

Interesting....I went back to my score online and used the Fico Simulator to see what would bring my score up. According to the Simulator, if I paid down 90% to 100% of my debt, my score would go up to 768 !! Still below last years score!!

My FICO score ingredients

Payment History~Great

Length of Credit History~Great

Amount of New Credit~Great

Amount of Debt~Very Good

What would you possibly have to do to get a score of 850?

Re: Has Fico Changed the way it scores?

haulingthescoreup — Sat, 13 Oct 2007 13:12:03 GMT

I think you're in a new bucket. Whether it's age or CL's or what, you're now being compared with a different group of people, and your ranking within this group is a bit lower. Which would imply that in fact, at some point last year, your score actually went up a bit, and then you got "promoted" to the next score bucket. I almost understand this.

Try fused's post on this (reply #17--don't know how to link the actual reply):

http://ficoforums.myfico.com/fico/board/message?board.id=ficoscoring&thread.id=10004&view=by_date_ascending&page=2

Re: Has Fico Changed the way it scores?

Anonymous — Sat, 13 Oct 2007 13:40:23 GMT

haulingthescoreup wrote:
I think you're in a new bucket. Whether it's age or CL's or what, you're now being compared with a different group of people, and your ranking within this group is a bit lower. Which would imply that in fact, at some point last year, your score actually went up a bit, and then you got "promoted" to the next score bucket. I almost understand this.

Thanks...that almost makes sense to me and I feel somewhat better now. I always read the articles about "Raising your Credit Score" and they all say the same things. Do A, B and C and your score will go up. Nothing about "buckets". For it to go up every year and then drop like a stone was very distressing. Perhaps I'm doing a better job than I thought.

Re: Has Fico Changed the way it scores?

haulingthescoreup — Sat, 13 Oct 2007 14:13:20 GMT

Nothing like being punished for good behavior. Of course, it could also be the phase of the moon or something. I'm now to the point where 70 - 80% of how scores behave make perfect sense, and the rest is utterly incomprehensible.

Re: Has Fico Changed the way it scores?

Anonymous — Sat, 13 Oct 2007 14:23:45 GMT

I just noticed something else on this report. In the section where it tells you what hurts or helps your score they are giving me stats on High Acheivers. I've never seen that phrase used on the reports before. One of my negatives is "You Have too many credit cards carrying balances". Okaaayyyy!!

10 cards with a balance.

2~Car Loans

3~2.9% till paid off

5~Penny's [online purchase of sweats]

Shell [Gas last month]Chase[Books at Amazon]

Re: Has Fico Changed the way it scores?

Anonymous — Sat, 13 Oct 2007 14:29:14 GMT

10 cards with a balance.

2~Car Loans

3~2.9% till paid off

5~Penny's [online purchase of sweats]

Shell [Gas last month]

Chase[Books at Amazon]

Sears[TV for Granddaughter]

Visa[Voip, AOL, Smart Tag]

Above 5 paid in full everymonth.

So actually, I only have 5 cards carrying a balance.

Message Edited by lilacteapot on 10-13-2007 07:25 AM

Message Edited by lilacteapot on 10-13-2007 07:29 AM

Re: Has Fico Changed the way it scores?

smallfry — Sat, 13 Oct 2007 14:42:20 GMT

@Anonymous wrote:
I just noticed something else on this report. In the section where it tells you what hurts or helps your score they are giving me stats on High Acheivers. I've never seen that phrase used on the reports before. One of my negatives is "You Have too many credit cards carrying balances". Okaaayyyy!!
10 cards with a balance.
2~Car Loans
3~2.9% till paid off
5~Penny's [online purchase of sweats]
Shell [Gas last month]Chase[Books at Amazon]

OK. Now we're getting somewhere. How many total open accounts do you have? I pulled Ex this morning. I now have a total of 7 open accounts. 5 credit cards, one store card and one car loan that are now open. I let 3 accounts report. One credit card, my Walmart store card and of course the car loan. I have never seen that too many accounts reporting balances reporting comment but perhaps that has to do with the fact that I have public records and EX thinks I have opened too many new accounts in the past year. Is 14 too many? LOL. Seeking new credit as well. Maybe once I lose the new accounts penalty they will come up with something else. I have faith that they will.

Re: Has Fico Changed the way it scores?

smallfry — Sat, 13 Oct 2007 14:44:32 GMT

Lilac from what I have heard you should try to keep accounts reporting a balance under 40% of the total number of open accounts. So if you have 10 open try not to let more than 4 report balances. Maybe give that a try before your next pull.

Re: Has Fico Changed the way it scores?

haulingthescoreup — Sat, 13 Oct 2007 14:52:27 GMT

@Anonymous wrote:
I just noticed something else on this report. In the section where it tells you what hurts or helps your score they are giving me stats on High Acheivers. I've never seen that phrase used on the reports before. One of my negatives is "You Have too many credit cards carrying balances". Okaaayyyy!!
5~Penny's [online purchase of sweats]
Shell [Gas last month]
Chase[Books at Amazon]
Sears[TV for Granddaughter]
Visa[Voip, AOL, Smart Tag]
Above 5 paid in full everymonth.
So actually, I only have 5 cards carrying a balance.

Are you PIF'ing them before or after the CCC reports your balances to the CRA's? Most but certainly not all CCC's update the bureaus on your statement date. If you check your reports, you should be able to find the date that the balance reported.

So as smallfry said, only let 4 of your 10 open accounts post, plus pay them down to 1-9% beforehand if necessary, and PIF afterwards. (Sorry if you've already seen this elsewhere.) That might goose your score a bit.

Re: Has Fico Changed the way it scores?

Anonymous — Sat, 13 Oct 2007 15:37:30 GMT

Yes- I said this on page 1

@smallfry wrote:
Lilac from what I have heard you should try to keep accounts reporting a balance under 40% of the total number of open accounts. So if you have 10 open try not to let more than 4 report balances. Maybe give that a try before your next pull.

Re: Has Fico Changed the way it scores?

Anonymous — Sat, 13 Oct 2007 15:38:32 GMT

smallfry wrote:
OK. Now we're getting somewhere. How many total open accounts do you have?
Okay...mumble, mumble.....28. However, that's opened and closed. It's hard to tell exactly how many are actually usuable. For instance, Central Virginia Credit Union is reporting 5 accounts but only one is actually usuable. That's the one I use to put monthly charges on like Verizon Voip and Smart Tag and pay it off every month. The other 4 are from nearly 10 years ago when we actually joined and had a car loan, a personal loan, etc. They are simply old accounts with 0 balances. Another example is Shell/Citi. They sold the account to Citi and that's the one I use for monthly gas...again, paid off every month.

Since our score was always going up, I never went to the trouble to see about weeding off some of these accounts but perhaps I should. I just figured they would drop off on their own once they reached a certain age.

Both Penney's and Sears have interest rates that are so astronomical, I would never carry a balance longer than a month, but both of them are my oldest accounts so I keep them, and only use them online when I get free shipping or something like that.