topic Re: Effect of 1 HP with a thin file in Understanding FICO® Scoring

Effect of 1 HP with a thin file

MakingProgress — Mon, 22 Oct 2018 14:52:57 GMT

I have been helping DS to establish credit. 5 months ago I added him as an AU on my QS. At that time there was a collections account that was not his on his CR. That was disputed and removed.

So he had a CR with one AU account, no inq, no baddies, Util 3% FICO 8 scores EX 743, EQ 732, TU 761.

He then applied for a Cap one card and took a 3B HP. New FICO 8s EX 736 (-7), EQ 732 (-), TU 761(-)

With such a thin file shouldn't there have been change in all FICO 8 scores with a new Inq? The new inq does show all all three CR. Would the no change on EQ and TU be common with a new HP?

Re: Effect of 1 HP with a thin file

Anonymous — Mon, 22 Oct 2018 15:34:55 GMT

FICO 8 is implemented differently at the three bureaus, so that even with identical data the three models will behave differently. You may know that, but that's the first point to be made.

Score theorists here believe that FICO models have brackets for inquiries. For example, a model might look like this:

0-1 inquries: No penalty

2-3 inquries: 5 point penalty (approx)

4-5 inquries: additional 5 point penalty (approx)

6-8 inquries: additional 5 point penalty (approx)

etc.

PS. I am curious how the AU account reads on his reports in terms of age. Be sure you base this on looking at his actual reports, rather than how the account reads on your reports. It can sometimes happen that an AU account can appear with a very recent Date Opened even if the true account is (say) 15 years old.

If the AU account is fairly old (e.g. > 4.01 years) then FICO 8 (for TU and EQ) is likely not placing him in the most vulnerable scorecard, despite the fact that he had only one account.

Re: Effect of 1 HP with a thin file

Anonymous — Mon, 22 Oct 2018 15:37:03 GMT

PPS. What credit monitoring tool(s) are you using to track your reports and scores?

Re: Effect of 1 HP with a thin file

MakingProgress — Mon, 22 Oct 2018 16:15:08 GMT

I am using CCT with reports pulled 1 week apart. The account shows as opened 7/17 which is when I opened it. CCT summary shows Oldest account 1.2 years and avg age 1.2 years.

I really just thought on a HP on such a thin file would cause a score change, and was suprised that it did not.

Re: Effect of 1 HP with a thin file

Anonymous — Mon, 22 Oct 2018 16:35:29 GMT

I find it a little surprising too. But the explanation is likely that (a) FICO 8 scores inquiries in terms of brackets and (b) the brackets for FICO 8 EX are different for his scorecard than they are for FICO 8 EQ and FICO TU 8 (since those three models are different -- even when the data are the same).

Since you pulled his scores before he applied for the Cap One (and confirmed the existence of true FICO 8 scores) that means that FICO 8 at all three bureaus is counting the AU account. It can sometimes happen that FICO 8 will ignore an AU card, but that isn't happening here.