topic Re: Increased AoOA → Score Drops (DPs) in Understanding FICO® Scoring

Increased AoOA → Score Drops (DPs)

thornback — Sat, 02 Feb 2019 00:08:49 GMT

Hey Y'all -

Today is the first of the month. My scores dropped. The only changes between yesterday and today is age of accounts.

Note:

(1) The oldest primary account that hit 6 years is a student loan.

(2) The oldest account overall (AU) that hit 8 years is a revolving account.

(3) The youngest account that hit 3 months is a primary revolving account.

Big Picture as of 2/1:

EX FICO 8 - Score drop -15 points

Oldest Primary Account reached 6 years
Oldest Account Overall (AU) reached 8 years
Youngest Account reached 3 months

EQ FICO 8 - Score drop -25(!) points

Oldest Primary Account reached 6 years
Oldest Account Overall (AU) reached 8 years
Youngest Account reached 3 months

TU FICO 8 - Score drop -5 points

Oldest Primary Account reached 6 years
AU Account does not report on TU
Youngest Account reached 3 months

**Reason codes for each bureau also changed (I can only give specifics for EX reason codes -- EQ and TU codes also changed, but I don't have the exact wording for the previous codes, only the current codes):

EX on Jan 31st:

Helping: (1) No Missed Payments; (2) Recent Credit Card Usage; (3) No collection / Public Record
Hurting: (1) Short Account History

EX on Feb 1st:

Helping: (1) No Missed Payments; (2) Low Revolving Credit Usage; (4) Recent Credit Card Usage
Hurting: (1) Short Account History; (2) Loan Balances (student loans)

EQ on Feb 1st:

Helping: (1) No Missed Payments (same); (2) Low Revolving Credit Usage (new); (3) Recent Credit Card Usage (same)
Hurting: (1) Short Account History (same); (2) Loan Balances (new)

*The no collection / public record used to be a postitive reason

TU on Feb 1st (no AU Account):

Helping: (1) No Missed Payments (same); (2) Long Credit History (new); (3) Recent Credit Card Usage (same)
Hurting: (1) Short Revolving History (new); Loan Balances (same)

*The no collection / public record used to be a postitive reason

All of that leads me to believe that an AoOA for primary accounts hitting 6 years is a threshold for scorecard segmentation ('rebucketing'). My AU account hitting 8 years on the two bureaus which report my AU account may have also had an effect on 'Length of Credit' - possibly increasing the number of points lost. Other than the AU account, all bureaus have the same info.

Interesting tidbits:

TU has a 'Long Credit History' reason code now that my oldest (primary) is 6 years, yet EX and EQ still list 'Short Account History' as a negative.
TU is now distinguishing between my revolving accounts and loan accounts -- a student loan is the account that hit the 6 year mark; my oldest revolving account is 5 years 6 months and it's derogatory (paid charge-off) and for that I now get a 'Short Revolving History' negative reason code.

On the flip side, my Vantage-3 scores all increased: EX +23; EQ +28; TU+21.

That's it.... I've been in the garden for exactly 70 days (94 days since new account, 70 days since last HP) and now that my scores have dropped due to changes beyond my control, I'm contemplating stepping out of the garden to app for an NFCU CC. I became a member a month ago - opened a checking / savings -- but was serious about gardening so did not app for credit; was going to wait til Jan 2020. Now I feel like I may as well just go ahead and app now... then go back into the garden for a year.... I'm going to wait til the somewhat high balance on one of my cards reports at $0 this coming week first so I may change my mind by then and stay in the garden since I certainly don't need a new card -- i just kinda want to get my Navy lending relationship started... we'll see how I feel in a week. I'm not concerned about the score drops, find it quite interesting actually tho it was a bit disappointing to see at first but oh well -- at least it's not due to new negatives or anything.

Guess I need to update my siggy...

Re: Increased AoOA → Score Drops (DPs)

Anonymous — Fri, 01 Feb 2019 18:46:39 GMT

I agree that different scorecard assignment is the only possible way that increasing age of accounts factors could result in a lower score. Looking at your reason statements though, what stands out to me is that the presence of the loan-related statement was not there prior to the 1st (and your score drop) which suggests to me that something related to your loan(s) may be the cause here. You also only want to look at the negative statements, not the "helping" ones, as the negative ones are telling as to what's impacting your score.

Re: Increased AoOA → Score Drops (DPs)

thornback — Fri, 01 Feb 2019 19:26:32 GMT

@Anonymous wrote:
I agree that different scorecard assignment is the only possible way that increasing age of accounts factors could result in a lower score. Looking at your reason statements though, what stands out to me is that the presence of the loan-related statement was not there prior to the 1st (and your score drop) which suggests to me that something related to your loan(s) may be the cause here. You also only want to look at the negative statements, not the "helping" ones, as the negative ones are telling as to what's impacting your score.

Thanks for your thoughts / insight, BBS.

No changes to my loan balances (or anything else regarding the loans) between yesterday and today -- and they won't update for another 2 weeks.

The loan balances negative reason used to only show up on EX and EQ sporadically - whenever my overall util went above 9% -- January util was less than 9% and that reason code was not there; however, November and December util was at 11% and 13% respectively, and that reason code was there. My util has not changed since January (still below 9%) but now that reason shows up on EX and EQ. The loan balances negative reason has always displayed on TU.

I chalked it up to that reason code being somehow related to utilization (factoring into amounts / debt owed) since it only appeared, consistently, on TU and that is the bureau that does not have the AU account contributing to the total CL, so my aggregate (credit) util is always a bit higher on TU (average 11%). But now... it seems to no longer matter - it's there for all 3 bureaus regardless so I don't know..

FYI: Loan balances are all still quite high -- above 88%.

Re: Increased AoOA → Score Drops (DPs)

Anonymous — Fri, 01 Feb 2019 20:34:48 GMT

What types of score shifts have you seen with the presence vs absence of that negative reason statement pertaining to loans?

Re: Increased AoOA → Score Drops (DPs)

thornback — Fri, 01 Feb 2019 20:39:14 GMT

@Anonymous wrote:
What types of score shifts have you seen with the presence vs absence of that negative reason statement pertaining to loans?

+/- 9 to 11 points.

Re: Increased AoOA → Score Drops (DPs)

NRB525 — Fri, 01 Feb 2019 21:56:27 GMT

OP, thanks for posting all the detail information.

Is is correct that you have at least one negative? Or did I misunderstand?

Re: Increased AoOA → Score Drops (DPs)

thornback — Fri, 01 Feb 2019 22:07:39 GMT

@NRB525 wrote:
OP, thanks for posting all the detail information.

Is is correct that you have at least one negative? Or did I misunderstand?

YW and you are correct. I have a single derog. - paid charge off. No other lates or negative items.

Re: Increased AoOA → Score Drops (DPs)

Anonymous — Sat, 02 Feb 2019 01:08:03 GMT

Correct me if I’m wrong anyone, but if you have a derogatory, doesn’t that mean a change in scorecard can only come by the aging of that derogatory?
If that loan were not being properly reported and it were changing, could that affect credit mix points?
If you don’t mind sharing, can you tell us what percentage the AU account is utilized at?

Re: Increased AoOA → Score Drops (DPs)

thornback — Sat, 02 Feb 2019 02:02:59 GMT

I don't know, I have never heard of this... from everything I've read, the aging of your oldest account is a scorecard segmentation factor. The aging of a derogatory account should actually yield points, not change your scorecard assignment - only the removal of a derog would have that effect (ie. dirty → clean).

@Anonymous wrote:
Correct me if I’m wrong anyone, but if you have a derogatory, doesn’t that mean a change in scorecard can only come by the aging of that derogatory?

My student loans (I have 13 of them, one of which aged to 6 years) are reporting correctly now and always have - my credit mix has not been affected. My loans also have not reported since Jan. 15th - and there was no score change at that time (I get daily EX scores / reports). They will not report again til Feb. 15th. These score changes literally happened overnight, the score difference is 1/31 vs. 2/1.

@Anonymous wrote:
If that loan were not being properly reported and it were changing, could that affect credit mix points?

My AU account util is always low - always less than 2% (current balance is $331 out of $20K which is ~1.65%) - so this is a non-factor.

@Anonymous wrote:
If you don’t mind sharing, can you tell us what percentage the AU account is utilized at?

Accounts age on the first of the month, every month as far as FICO is concerned. This appears to be a scorecard reassignment due to the aging of my oldest account beyond a threshold of either 6 years or 8 years; or, perhaps, both. It seems I am now at / near the bottom of a better scorecard - given age of credit - because I have a derogatory account and still short credit history (in comparison to others within this scorecard).

Re: Increased AoOA → Score Drops (DPs)

Anonymous — Sat, 02 Feb 2019 02:10:27 GMT

From my humble understanding, the first segmentation factor is whether or not a derogatory exists. If so, then the next segmentation factor is whether there’s a public record and then the third segmentation factor is age of the derogatory.
I’ve gathered this information from illustrations from ThomasThumb, who is much more knowledgeable in this matter than I.
I asked about the credit mix because they you stated the reason code for loan was intermittent.
I was wondering if the AU account was being flagged by the anti-abuse algorithm in one or more of the bureaus.
I know that 2 of the bureaus do not discriminate as to what day of the month and use the 1st for everything, but doesn’t EQ use the actual day of the month for its calculations? Or does the FICO algorithm always use the first for all purposes regardless?
By the way what would be your AAoA with the AU?

Re: Increased AoOA → Score Drops (DPs)

thornback — Sat, 02 Feb 2019 02:16:42 GMT

@Anonymous wrote:
From my humble understanding, the first segmentation factor is whether or not a derogatory exists. If so, then the next segmentation factor is whether there’s a public record and then the third segmentation factor is age of the derogatory.
I’ve gathered this information from illustrations from ThomasThumb, who is much more knowledgeable in this matter than I.
I asked about the credit mix because they you stated the reason code for loan was intermittent.
I was wondering if the AU account was being flagged by the anti-abuse algorithm in one or more of the bureaus.
I know that 2 of the bureaus do not discriminate as to what day of the month and use the 1st for everything, but doesn’t EQ use the actual day of the month for its calculations? Or does the FICO algorithm always use the first for all purposes regardless?

I;m almost postive Thomas_Thumb was the author of the post I read about the age of oldest account being a segmentation factor (I'll see if I can find the post and note the link). Yes, you are correct - the presence of a derog is also a factor -- but I do not know if the ageing of a derog plays a part as well -- i have never heard that theory, tho it is certainly possible. But, my derog only aged from 5.5 years to 5.6 years, so seems odd that that would have resulted in a scorecard reassignment.

Yes, the loan balance reason code was intermittent on the two bureaus that report the AU -- it used to only appeared when my credit utilization increased beyond 9% and now it is there even though my util is below 8%. However, it was always a constant negative reason on TU, which does not report my AU account. My thought (which could be totally wrong) was perhaps the loan balances were a factor in the overall debts owed ratio (credit & loans) -- which would be higher on TU due to the lack of the $20K AU; this ratio would also be higher on EX and EQ if my overall util was high (in my case, high was anything above 9%).

I do not believe my AU is flagged for abuse as the limit and balance is still considered by both bureaus that report that account (do you know how else would I know if it were?). My AU is also legit, same residence / last name as primary account holder.

FICO in general gauges age by the 1st of the month. EQ uses the actual date on your report while EX and TU use the 1st of the month - but the FICO algo uses the 1st of the month no matter the bureau.

Re: Increased AoOA → Score Drops (DPs)

thornback — Sat, 02 Feb 2019 02:20:08 GMT

@Anonymous wrote:
By the way what would be your AAoA with the AU?

AAoA with AU is 2 years 11 months. I'll find out next month what, if anything, the increase to 3 years does...

Re: Increased AoOA → Score Drops (DPs)

Anonymous — Sat, 02 Feb 2019 02:37:58 GMT

Assuming the illustration I have is correct: AooA is segmentation factor at the second level if no derogatories exist. I’m on mobile so I don’t know how to insert it, but if the illustration is correct because you have a derogatory, AooA may not be a segmentation factor until that derogatory falls off. However I agree the timeframe does not appear to be threshold.
As to the intermittent code I think it only shows so many, so probably another one pushed it out maybe?
The AU abuse algorithm can still be flagged regardless of name and address. If my understanding is correct, the only way you can know for sure is to actually test it as BBS advised me. Have everything else report zero and then see if placing a charge on it gives you back the points you lose for having no balances on any account.
I have one reported at all three bureaus that I need to test.
Thanks for the information on the reporting day being the same for FICO purposes regardless of bureau.

Re: Increased AoOA → Score Drops (DPs)

thornback — Sat, 02 Feb 2019 02:40:29 GMT

@Anonymous wrote:
From my humble understanding, the first segmentation factor is whether or not a derogatory exists. If so, then the next segmentation factor is whether there’s a public record and then the third segmentation factor is age of the derogatory.
I’ve gathered this information from illustrations from ThomasThumb, who is much more knowledgeable in this matter than I.

Here's a post from Thomas_Thumb that mentions age of oldest account as a scorecard factor:

https://ficoforums.myfico.com/t5/General-Credit-Topics/Thick-vs-Thin-file/m-p/4781322/highlight/true#M236337

Quote: "File age classification is based on age of oldest account on file. This influences scorecard assignment. A file's AAoA is a factor in Fico model scoring - just not scorecard assignment. "

But then, I also just came across this one, also from Thomas_Thumb, which discusses derogs & scorecards -- so perhaps the aging of my derog did, indeed, play a part in reassignment...

https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Buckets-Scorecards/m-p/5070090/highlight/true#M130640

While my derog account is 5.6 years old as of today, the initial 30-day late delinquency that led to the charge-off did become exactly 5 years old today - so maybe that was some sort of a milestone... ???

Good thoughts...thank you for brainstorming.

Re: Increased AoOA → Score Drops (DPs)

thornback — Sat, 02 Feb 2019 02:56:39 GMT

@Anonymous wrote:
Assuming the illustration I have is correct: AooA is segmentation factor at the second level if no derogatories exist. I’m on mobile so I don’t know how to insert it, but if the illustration is correct because you have a derogatory, AooA may not be a segmentation factor until that derogatory falls off. However I agree the timeframe does not appear to be threshold.
As to the intermittent code I think it only shows so many, so probably another one pushed it out maybe?
The AU abuse algorithm can still be flagged regardless of name and address. If my understanding is correct, the only way you can know for sure is to actually test it as BBS advised me. Have everything else report zero and then see if placing a charge on it gives you back the points you lose for having no balances on any account.
I have one reported at all three bureaus that I need to test.
Thanks for the information on the reporting day being the same for FICO purposes regardless of bureau.

Yes, I think I know which illustration you are referencing -- I think it's the one in the link I just posted about derogs -- seems you may be correct in the derog factor. But --

That doesn't really explain the drastic point loss deviations between EX (-15), EQ (-25), and TU (-5). If the aging of the derog was the only culprit, why only a small drop on TU and such large drops on EX and EQ (both of which had the AU age to 8 years today - in addition to the loan aging to 6 years and the initial derog delinquency to 5 yrs.)? This is what makes me think the aging of the oldest account was a motivating factor... otherwise, the loss of points should be within a smaller range between the three bureaus, no?

You may have a point about the intermitten reason code -- I guess it could have been pushed out -- still seems odd that it only happened on the two bureaus with the AU (I guess that could be another reason to assume the AU is not flagged).

I'll have to test the AU thing... that card always reports a balance, so I'll have to see what happens next time I'm able to let all of my primaries report $0 and then a balance again... thanks for the advice!

Re: Increased AoOA → Score Drops (DPs)

Anonymous — Sat, 02 Feb 2019 03:20:21 GMT

Yes the age of the derogatory determines the second level of segmentation, if the illustration is correct. The age of it may also be a factor in scoring on the particular Scorecard too...idk.
I definitely do not believe the age of the derogatory was the sole factor. Agreed.
I also agree the fact that the code was intermittent at those two bureaus may seem to indicate the AU account is not flagged. Also I wonder if it gives the flag at one bureau and not at the other. I wouldn’t think so if the data are exactly the same.
If the AU account never reports zero then you will have to zero out all other accounts and then when you show a balance on one more, if there’s a point gain then the AU account is not showing, I believe.