topic Re: Is there a list of known thresholds? in Understanding FICO® Scoring

Is there a list of known thresholds?

Caardvark — Thu, 14 Feb 2019 17:03:35 GMT

I know the utilization thresholds (e.g. 8.9%, 28.9%, etc). And, I'm aware of (but do not know the specifics) the AAoA, AoOA, and AoYA thresholds but I'd like to know what the other known thresholds exist. Some example:s

Do thresholds exist for "Time Since Negative?"
What are the impact of crossing mortgage thresholds (or other installment loans) vs revolver thresholds?

I think it would be useful in a chart and, ideally, it would include estimates of score impact. And, if not already available, I would be happy to chart if someone can send me the info. I know it would help me so, I assume it could help others; particularly when trying to assess garden goals.

Re: Is there a list of known thresholds?

HeavenOhio — Thu, 14 Feb 2019 20:33:26 GMT

It's hard to pin down age thresholds because they can vary by score and scorecard. Also, they can frequently be camouflaged by other events.

A nice bump for AoYA reaching a year is to be expected, though. And it appears that 78 months might be an AAoA threshold on at least some Experian scores.

Re: Is there a list of known thresholds?

Revelate — Fri, 15 Feb 2019 07:02:08 GMT

There are thresholds for time since negative, most notably there's an entire reason code for "recent deliquency"

It's probably a round 1 or 2 year metric, coming up on 1 year with my own deliquency will see, and there's a scorecard segmentation metric on old vs. new derogatory information too seemingly for FICO 8, not sure where that is, 4-5 years probably.

Installment utilization does have breakpoints, one well characterized at 8.99%, and while I have pretty good data suggesting there is another breakpoint somewhere north of 50% it's been troublesome for people to nail down.

There's some handwaving chart data on lates and that's as good as it's going to get really, everyone's profile is different and there isn't enough data to make truly concrete estimates but it's good enough for government work. Guessing someone will post it in the next day or two heh.

Re: Is there a list of known thresholds?

Caardvark — Fri, 15 Feb 2019 15:26:22 GMT

Helpful! Thanks Revelate

What about inquiries? I know they become unscoreable after 1 year but are there earlier points where they start to wear off (e.g. at 3 months, 6 months, etc).

In the near-term, I'm simply curious what scoring benefit I may or may not see in April/May when:

My most recent late-payment hits two years
I have six HP's that will hit 6 months old
Lastly, once I know and pay my tax bill, I plan to make a big payment on my mortgage to bring it below 48.9% util

Re: Is there a list of known thresholds?

Anonymous — Fri, 15 Feb 2019 19:10:34 GMT

Most (myself included) do not believe that there is any scoring benefit to the aging of inquiries inside of 365 days. The points lost, X, that are realized upon the taking on of an inquiry are equal to what comes back after Day 365; X points exactly should return all at once.

Based on the bullet points you wrote above, I'd say perhaps your most recent baddie aging past 24 months could result in some slight gains. I would expect no gains at all from inquiries reaching 6 months in age and I'm not sure you'd see any benefit from the mortgage being paid down across 50% utilization. Most believe that mortgages are considered "significantly paid down" at some point around 70% utilization, meaning that maximum FICO points may be realized at that time, similar to the points realized from a different installment loan type paid down below 8.9%. Any other gains along the way IMO would be trivial, say a couple of points.

Re: Is there a list of known thresholds?

Revelate — Sat, 16 Feb 2019 02:13:52 GMT

I have concrete data that EQ FICO 5 at least does not have any inquiries fading at all during the course of the year.

I don't think FICO 8 does either but I didn't have good FICO 8 access back then for testing purposes.

Re: Is there a list of known thresholds?

Caardvark — Sat, 16 Feb 2019 12:28:06 GMT

Thank you both. That's very heelpful.

Re: Is there a list of known thresholds?

moosemoney — Mon, 18 Feb 2019 16:54:42 GMT

@Anonymous wrote:
Most (myself included) do not believe that there is any scoring benefit to the aging of inquiries inside of 365 days. The points lost, X, that are realized upon the taking on of an inquiry are equal to what comes back after Day 365; X points exactly should return all at once.

Based on the bullet points you wrote above, I'd say perhaps your most recent baddie aging past 24 months could result in some slight gains. I would expect no gains at all from inquiries reaching 6 months in age and I'm not sure you'd see any benefit from the mortgage being paid down across 50% utilization. Most believe that mortgages are considered "significantly paid down" at some point around 70% utilization, meaning that maximum FICO points may be realized at that time, similar to the points realized from a different installment loan type paid down below 8.9%. Any other gains along the way IMO would be trivial, say a couple of points.

Anectodal, but in August 2018 I got a notification that my Mortgage had been significantly paid down and I got a 20 point jump when my utilization had dropped from 83% to 82%.

Re: Is there a list of known thresholds?

Anonymous — Tue, 19 Feb 2019 03:04:35 GMT

@moosemoney wrote:
Anectodal, but in August 2018 I got a notification that my Mortgage had been significantly paid down and I got a 20 point jump when my utilization had dropped from 83% to 82%.

When you say you got a notification, through what means? Interesting that you saw a 20 point jump there. This would be in line with the score jump expected from crossing the 8.9% threshold on a non-mortgage installment loan. Also when you referenced 83% --> 82%, can you provide the exact (decimal) percentage points out to at least tenths? With rounding I'm curious if the proposed threshold here is at 82% or 83%. Thanks.

Re: Is there a list of known thresholds?

Anonymous — Tue, 19 Feb 2019 22:44:36 GMT

@BBS: so mortgages are considered significantly paid down somewhere in the 70 to 80% range and therefore maximum points are given, but you said for non-mortgage installment the magic number is 8.9%. Is a car loan considered a mortgage installment loan since the vehicle is mortgaged? So would maximum points be given on a car loan at somewhere around 80% as well?

Re: Is there a list of known thresholds?

Thomas_Thumb — Wed, 20 Feb 2019 01:07:23 GMT

Although home mortgages (typically 15 or 30 years) and car loans (typically 3 to 6 years) are installment loans, they are coded differently by Fico. A score boost has been reported for car loans passing below the 9% threshold. That was on a relatively young car loan.

There is some evidence that payment history is a factor in scoring for car loans in addition to mortgages. Let's say a profile only has one open loan and it is a car loan.

1) If that profile has 4 years payment history on a 5 year loan and the next payment takes B/L below 9% there may be no bump in Fico 8 score.

2) If that profile had 6 months payment history on a 5 year loan and a sizeable payment was made to bring B/L below 9% it might see a 20 to 25 point boost in Fico 8 score.

It should also be note that a profile with an open mortgage may not see any score change associated with paying down a car loan from a high B/L to a B/L under 9% even if the car loan is young. Why? Because mortgages typically are much higher dollar amounts than car loans and balance to loan ratios are considered in aggregate although some scoring attributes appear to consider loan type.

Re: Is there a list of known thresholds?

Anonymous — Wed, 20 Feb 2019 01:54:34 GMT

@Thomas_Thumb: So then home mortgages and car loans are not treated the same. Are there established or semi established thresholds other than 9% for Car loans? Are car loans no different than any non-mortgage installment loan then? Same as SSLs?
And is it simply the 80% threshold for home mortgages? And can you go over the points of difference between mortgage and non-mortgage installment loans please?

Re: Is there a list of known thresholds?

Anonymous — Wed, 20 Feb 2019 02:02:23 GMT

Member SJ here posted once regarding an auto loan crossing the 8.9% threshold and he saw a significant (say) 20-25 point gain I believe. If an installment loan (verses none) is "worth" (say) 30-35 points on FICO 8, this would suggest that the paydown of over 90% of the loan only results in a 5-15 point gain and that crossing that final threshold is what matters most.

Re: Is there a list of known thresholds?

Thomas_Thumb — Wed, 20 Feb 2019 14:30:45 GMT

SJ's auto loan never even passed one years age before payoff. Therefore, his 20 or 25 point gain going below 9% was full monty. If the loan had a lengthy payment history of 3 years, the point gain associated with dropping below 9% would be less. There have been other posters not experiencing an additional gain, when making standard payments, and finally dropping below a 9% level after 3, 4 or 5 years.

Inverse and CAPTOOL have shared data which points to an installment loan B/L threshold in the 65% to 70% range.

Re: Is there a list of known thresholds?

SouthJamaica — Wed, 20 Feb 2019 17:46:33 GMT

@Anonymous wrote:
Member SJ here posted once regarding an auto loan crossing the 8.9% threshold and he saw a significant (say) 20-25 point gain I believe. If an installment loan (verses none) is "worth" (say) 30-35 points on FICO 8, this would suggest that the paydown of over 90% of the loan only results in a 5-15 point gain and that crossing that final threshold is what matters most.

Good memory. Yeah my experience with the auto loan was that it affected FICO 8 the same way as my little SSL.

Re: Is there a list of known thresholds?

SouthJamaica — Wed, 20 Feb 2019 17:47:49 GMT

@Thomas_Thumb wrote:
SJ's auto loan never even passed one years age before payoff. Therefore, his 20 or 25 point gain going below 9% was full monty. If the loan had a lengthy payment history of 3 years, the point gain associated with dropping below 9% would be less. There have been other posters not experiencing an additional gain, when making standard payments, and finally dropping below a 9% level after 3, 4 or 5 years.

Inverse and CAPTOOL have shared data which points to an installment loan B/L threshold in the 65% to 70% range.

I can't believe what good memories @Thomas_Thumb and @Anonymous have

Re: Is there a list of known thresholds?

Anonymous — Wed, 20 Feb 2019 17:50:17 GMT

@Thomas_Thumb wrote:

Inverse and CAPTOOL have shared data which points to an installment loan B/L threshold in the 65% to 70% range.

So you think the element of time matters in addition to the utilization percentage?

What sort of data did they provide when crossing the possible 65%-70% utilization range? What sort of point gains are we talking here, relative to the gains associated with dropping down below 8.9%?

Re: Is there a list of known thresholds?

moosemoney — Thu, 21 Feb 2019 14:35:46 GMT

@Anonymous wrote:
@moosemoney wrote:
Anectodal, but in August 2018 I got a notification that my Mortgage had been significantly paid down and I got a 20 point jump when my utilization had dropped from 83% to 82%.

When you say you got a notification, through what means? Interesting that you saw a 20 point jump there. This would be in line with the score jump expected from crossing the 8.9% threshold on a non-mortgage installment loan. Also when you referenced 83% --> 82%, can you provide the exact (decimal) percentage points out to at least tenths? With rounding I'm curious if the proposed threshold here is at 82% or 83%. Thanks.

Sure! I originially spotted the notification on the Discover Scorecard site. Here's my post in my progress thread from when it happened.

I mistyped in my original response, though. I actually went from 82% to 81% -- the more precise figures are this, though: I got the notification after my July 2018 mortgage payment had posted. Before that payment my principle balance was at 82.177188% utilization. After the July payment (that triggered the notification and jump) the balance was at 81.795863% utilization. Keep in mind this only happened on my Experian. The other two bureaus did not show any type of major jump from this.

I am currently at 78.716165% utilization and I have yet to receive another notification or jump. I will definitely update when/if that happens. My mortgage was opened in December 2007 if that helps at all.

Re: Is there a list of known thresholds?

Thomas_Thumb — Thu, 21 Feb 2019 18:17:54 GMT

@Anonymous wrote:
@Thomas_Thumb wrote:

Inverse and CAPTOOL have shared data which points to an installment loan B/L threshold in the 65% to 70% range.
So you think the element of time matters in addition to the utilization percentage?

What sort of data did they provide when crossing the possible 65%-70% utilization range? What sort of point gains are we talking here, relative to the gains associated with dropping down below 8.9%?

It certainly appears that age of the loan and/or payment history have some type of influence on points allocated toward B/L ratio. I even suspect that a SSL loan may not see as much of a score boost going below 9% if it was already 3 years old. However, the point of an SSL is immediate point boost so why keep B/L above 9%?

My hypothesis is a low installment B/L is a short cut for getting points that would otherwise come over time from payment history/loan age. This could be tested by those that have a single aged loan still above 9% (say 12% and paying down to 8%). Unfortunately, if someone has multiple open loans then other things come into play.

BTW - for mortgages there may be a couple B/L thresholds above 50% but, specifics are hard to nail down. Someone could put a table together listing various reported data points over the past few years to zero in on more commonly reported thresholds. However, that would take a lot of effort and other factors may be influencing numbers in some cases.

Re: Is there a list of known thresholds?

Anonymous — Thu, 21 Feb 2019 21:14:34 GMT

@Thomas_Thumb wrote:

My hypothesis is a low installment B/L is a short cut for getting points that would otherwise come over time from payment history/loan age. This could be tested by those that have a single aged loan still above 9% (say 12% and paying down to 8%). Unfortunately, if someone has multiple open loans then other things come into play.

Your hypothesis was shown to be correct on my scorecard: 17% to 8.47% on 1 SSL increased my TU FICO 8 score +62 points. I went from 666 to 728 in December 2018. 11 monthly payments had been reported and recorded at TU. My profile was only scoreable as of June 2018, or 6 months after I opened the loan.

I opened the loan in December 2017 with absolutely nothing on my credit file prior to that. I applied for my first credit card - from the same CU where I got the credit builder loan - after the score jump. I didn't know about the SSL technique at that time, so I walked into my CU thinking I still had a TU score of 666. I was pretty shocked when they did the HP and told me the current score.