topic Re: Significant top end buffer increase? in Understanding FICO® Scoring

Significant top end buffer increase?

Anonymous — Fri, 25 Jan 2019 02:45:00 GMT

Alright guys, odd one here that I can't explain. See the image below. On TU at the time the 850 score was generated through my Synchrony (Lowe's) account earlier this month, as you can see from the negative reason statements I had $0 balances across all revolvers. As a result, I'm extremely surprised by the 850 score. The last time I had all zero reported balances on revolvers was in September, where I saw a TU FICO8 score drop from 850 to 834. Losing those 16 points (maybe a few more with buffer?) is pretty standard and what I've come to expect for that penalty. So, if I'm able to now possess an 850 score with no current non-zero revolving balances reported, wouldn't that suggest that something significant changed on my profile between last September and now that dramatically increased my top-end buffer? Anyone venture to guess what this could possibly be? I can't think of anything, but some questions from you guys may lead me to consider things I otherwise wouldn't.

Age of accounts factors just to be clear on TU currently are 20 months AoYA, 8 years 2 months AAoA, 17 years 10 months AoOA. If you deduct 4 months from each of those values above, you'd have those age of accounts factors in September when I saw the 16 point drop in going from AZEO to AZ on TU. Scoreable inquiries on TU are 0 both before/after. One open installment loan (mortage) has been a constant, installment utilization there is in the lower 70's percentage wise both before/after. I'm not really sure what else to look into here.

Re: Significant top end buffer increase?

SouthJamaica — Fri, 25 Jan 2019 03:33:31 GMT

@Anonymous wrote:
Alright guys, odd one here that I can't explain. See the image below. On TU at the time the 850 score was generated through my Synchrony (Lowe's) account earlier this month, as you can see from the negative reason statements I had $0 balances across all revolvers. As a result, I'm extremely surprised by the 850 score. The last time I had all zero reported balances on revolvers was in September, where I saw a TU FICO8 score drop from 850 to 834. Losing those 16 points (maybe a few more with buffer?) is pretty standard and what I've come to expect for that penalty. So, if I'm able to now possess an 850 score with no current non-zero revolving balances reported, wouldn't that suggest that something significant changed on my profile between last September and now that dramatically increased my top-end buffer? Anyone venture to guess what this could possibly be? I can't think of anything, but some questions from you guys may lead me to consider things I otherwise wouldn't.

Age of accounts factors just to be clear on TU currently are 20 months AoYA, 8 years 2 months AAoA, 17 years 10 months AoOA. If you deduct 4 months from each of those values above, you'd have those age of accounts factors in September when I saw the 16 point drop in going from AZEO to AZ on TU. Scoreable inquiries on TU are 0 both before/after. One open installment loan (mortage) has been a constant, installment utilization there is in the lower 70's percentage wise both before/after. I'm not really sure what else to look into here.

It just seems to me that the passage of 4 months, or 2018 turning into 2019, or both, simply seasoned your profile more.

Re: Significant top end buffer increase?

Anonymous — Fri, 25 Jan 2019 04:37:13 GMT

So you're take then is that it's somehow related to my age of accounts factors? If that's the case, which one, or a combination of them? I always believed the biggest age of accounts factor in terms of FICO 8 points was the crossing of 12 months AoYA, a threshold usually good for 15-20 points. It seems here I picked up 15-20 points. I would think if a threshold existed somewhere on one of the age of accounts points that I crossed that it would have been documented at this point. You never know, I suppose. It's also very possible that I was at AZ at some point between September and now during the last 4 months, but that I simply didn't pull my scores at that exact moment in time to see where my scores stood.

Re: Significant top end buffer increase?

SouthJamaica — Fri, 25 Jan 2019 04:42:46 GMT

@Anonymous wrote:
So you're take then is that it's somehow related to my age of accounts factors? If that's the case, which one, or a combination of them? I always believed the biggest age of accounts factor in terms of FICO 8 points was the crossing of 12 months AoYA, a threshold usually good for 15-20 points. It seems here I picked up 15-20 points. I would think if a threshold existed somewhere on one of the age of accounts points that I crossed that it would have been documented at this point. You never know, I suppose. It's also very possible that I was at AZ at some point between September and now during the last 4 months, but that I simply didn't pull my scores at that exact moment in time to see where my scores stood.

I would just be guessing as to which one. It might be a combination of more than one. If I were to guess I'd pick crossing the 8 year barrier in AAoA. To me that looks like the most likely suspect.

Re: Significant top end buffer increase?

Anonymous — Fri, 25 Jan 2019 05:09:31 GMT

Could be. My question would then turn to those that have crossed 8 years on AAoA and ask if they experienced any score gain at or around that point?

While my thinking could be wrong on this, I'd expect score gains related to AAoA (or any age of accounts factor, really) to diminish as time passes. What I mean is that an AAoA crossing 1 year I would think means more (score wise) than 3 years, 5 years, 8 years, etc. That being said, on my profile crossing 6.5 years AAoA was good for 4 points. I would think then that a threshold at a point beyond (older) than 6.5 years would yield less points. Just thinking out loud here, as I could definitely be wrong.

Re: Significant top end buffer increase?

Anonymous — Fri, 25 Jan 2019 16:02:43 GMT

What is the current age of your mortgage? Thomas Thumb has conjectured that loans (especially mortgages) are treated differently as they age, even when installment utilization remains constant.

Aside from that, my bias is the same as SouthJ's, which is AAoA crossing from < 8.0 years to being > 8.0.

BTW, the fact that so much of the various models are influenced by whole numbers (and powers of ten, e.g. utilization) shows the bias of the human developers of the scoring models, independent of what the true risk measures are. There is no reason to believe (for example) that statistically there would be important risk shifts at utilizations of 10%, 30%, 50%, 70%, and 90%. Those numbers are an accidental by-product of the fact that the developers use a base-ten system of measurement.

Similarly, if there are significant changes built into the models for AAoA or AoOA connected with whole numbers of years (2 years, 4 years, etc.) that can't be because statisticians just happened to find important risk shifts at those numbers -- almost by magic. It's an artifact of the highly arbitrary way we measure time (where months are grouped in sets of 12 in these things called years). A year has an analogue in the natural world (planet circling the sun) but it is improbable that credit risk has anything to do with that.

Interesting thread, BBS!

Re: Significant top end buffer increase?

Anonymous — Fri, 25 Jan 2019 16:36:27 GMT

The mortgage is 9 years and 3 months old currently, although it hasn't yet reported this month or last for some reason, so on my TU CR we're looking at 9 years 1 month. In terms of a whole number, 9 years flat was reached in October, meaning in September I was at 8 years 11 months. I guess that could point to a threshold at 9 years, although using the base-ten argument one would think 10 years would be the more likely threshold point when humans were coming up with this stuff.

I've sort of seen the converse to whole numbers with respect to AAoA thresholds, having seen them at 6.5 years and 7.5 years, but not 6 years or 7 years. We're only talking a few (3-4 points) here, but able to be seen with fairly strong certainty. That doesn't completely rule out the 8 year mark, but the chances IMO of that point impacting score 15-20 points seems quite small.

Re: Significant top end buffer increase?

Thomas_Thumb — Fri, 25 Jan 2019 21:24:40 GMT

The unit of aging is in months for all models as far as I know. Fico appears to look at 6 month or 12 month increments but, I'm not 100% sold on that. Fico looks at AAoA for open mortgages only and open+closed combined but, not all CRAs look at both metrics. The installment age metric appears to look at age of oldest as well based on reason code statements.

Not sure what BBS has for a balance to loan ratio on his mortgage and whether or not it may have crossed an undocumented threshold.

With respect to aggregate rwevolving utilization VantageScore may use a linear formula (not withstanding the anomaly around 5%) as opposed to discrete step change discontinuities. At least that is clear from OFAT simulations using my profile.

A couple years back I received a "no recent revolving activity" demerit without a drop from 850 on classic Fico 8 as well. There was an impact on Fico 8 industry option versions and Fico 04 versions. Best I can tell comparing no change in Classic Fico 8 to various changes in industry option Fico 8 counterparts, Classic Fico 8 certainly has a 20 to 25 point buffer. Perhaps the buffer could be as high as 30 points for someone with an "ideal" file.

Re: Significant top end buffer increase?

Anonymous — Fri, 25 Jan 2019 19:56:49 GMT

Mortgage utilization currently is at 75.6%, so a few months ago it was at 76.x%; I wouldn't think that 76% is a threshold point here, but you never know.

Aside from that, I do have a closed mortgage on my CR as well, which was my original loan before the refinance to the one I have now. That one is at 14 years 2 months in age, closed in late 2009... so I'd expect it to drop off my CR late this year around the 10 year mark. I'm not sure if that closed account is impacting my profile at all with respect to installment/mortgage loans outside of AAoA.

As a spinoff question to the idea posed that mortgages are treated differently than other installement loan types possible due to a length of time factor, what about other loans types (like student loans) that can be for similar [high] dollar amounts like mortgages and similar [long] durations of over a decade?

Re: Significant top end buffer increase?

Anonymous — Fri, 25 Jan 2019 21:22:36 GMT

Is it possible there’s an 18 month AoYA threshold? The longer you go without adding a new account, the more stable your financial picture looks so it would make sense for there to be further thresholds. That’s the only thing that sticks out at me as a potential differentiator and I went and did a search and stumbled on your highest AoYA scoring thread and there was never a definite answer of what happens after a year.

Re: Significant top end buffer increase?

Turbobuick — Sat, 26 Jan 2019 03:23:05 GMT

Congrats BBS! Logged into Amex tonight and noticed the 850. Always close, but the planets must of finally lined up.

Re: Significant top end buffer increase?

Anonymous — Sat, 26 Jan 2019 08:55:02 GMT

@Anonymous wrote:
Is it possible there’s an 18 month AoYA threshold?

Possible sure. I know some scoring models will give you age of accounts too low reason statements (or similar ones) for AoYA under 2 years and I think TT said it may be possible to see one even at 3-5 years, although at that point I wouldn't expect the scoring impact to be significant. 24 months though I think could be noteworthy, although I doubt it would be as big as the typical 15-20 points seen at the reaching of 12 months, or we would have heard from people on this forum about it. It's possible that at the mid-point of 18 months some points could be seen, but again I wouldn't expect it to be the 16 or so that I'm looking for here.

Re: Significant top end buffer increase?

Anonymous — Sat, 16 Mar 2019 01:53:43 GMT

Very interesting information I’d love to know if there are more thresholds for youngest account.

Re: Significant top end buffer increase?

Bay_Area_Joe — Sun, 17 Mar 2019 16:08:30 GMT

Who really knows...

On my 850, they are showing items that are affecting my score.... Really ? ?

Re: Significant top end buffer increase?

Thomas_Thumb — Sun, 17 Mar 2019 18:38:40 GMT

@Anonymous wrote:
@Anonymous wrote:
Is it possible there’s an 18 month AoYA threshold?
Possible sure. I know some scoring models will give you age of accounts too low reason statements (or similar ones) for AoYA under 2 years and I think TT said it may be possible to see one even at 3-5 years, although at that point I wouldn't expect the scoring impact to be significant. 24 months though I think could be noteworthy, although I doubt it would be as big as the typical 15-20 points seen at the reaching of 12 months, or we would have heard from people on this forum about it. It's possible that at the mid-point of 18 months some points could be seen, but again I wouldn't expect it to be the 16 or so that I'm looking for here.

The "new account relatively recently" disappeared as a negative reason statement on my reports at exactly 5 years. It was either the 2nd ranked or top ranked negative statement on all my EQ score reports from 3/2015 thru 8/2016. It did not show up on any reports from 10/2016 onward - Note: my most recent account reached 5 years 9/2016.

Remaining "relatively recently" impact on score at 4 to 5 years under 5 points - IMO.

Since my lone EQ INQ for a CLI aged to 12 months in December, I'm back to the same two reason statements on EQ BCE.

Re: Significant top end buffer increase?

Anonymous — Sun, 17 Mar 2019 22:18:52 GMT

@Thomas_Thumb how many accounts are too many accounts with a balance? And how many accounts are too few with payment history?

Re: Significant top end buffer increase?

Anonymous — Mon, 18 Mar 2019 00:13:34 GMT

BBS, did you look at your other scores when you did this and compare them back to September? Or just the FICO8? I’m curious - I know all of your scores are very high and nudging the ceilings of their respective ranges, but if some of them have some headroom to move and you saw a shift (as in your mortgage scores, for example), then it might give a clue as to why your F8 score didn’t drop when you went to AZ from AZEO. For example, if your mortgage score shifted down but auto score did not, then it’s more likely you’d find the reason for your buffer in the common factors between F8 and Auto than those between F8 and Mortgage. Or if only Mortgage score went up, it’d be good to look at the areas where F8 and Mortgage have similar importance, but Auto does not.

Re: Significant top end buffer increase?

Anonymous — Mon, 18 Mar 2019 01:14:11 GMT

The only scores I have regular access to are my FICO 8's and then EQ BCE 8 and TU FICO 4, simply because I get them through my accounts. It wasn't until very recently (whenever I started that 28 scores thread) that I ever acquired my full list of FICO scores. So, unfortunately I have no other [score] basis of comparision against that TU FICO 8 score. I do know that the 2 negative reason statements that I see with my TU FICO 4 score have nothing to do with revolving credit use, as both point to length of time accounts have been established. Those codes have been the same for probably a solid year.

Birdman, it's possible to receive the negative reason statement of "too many accounts with a balance" if someone has just 2 accounts with a balance... one being a revolver and one being a loan. I've seen it personally on my profile. I do not believe the impact here is much at all and it's honestly more of a filler statement. By dropping either of those accounts to a $0 balance (to achieve 1 less account with a balance) I'd be taking a larger penalty for "no revolving credit use" or "no recent installment loan information."

Re: Significant top end buffer increase?

Anonymous — Mon, 18 Mar 2019 15:02:44 GMT

That’s exactly what I was thinking BBS! And it doesn’t make sense I thought you were allowed to have balances on less than half of your accounts without penalty.

Re: Significant top end buffer increase?

Revelate — Mon, 18 Mar 2019 16:14:05 GMT

BBS where are you getting your TU 04 score regularly?